by Chas Bonner
Northwest Agribusiness Executive Seminar
Early this week, Scythe & Spade had the opportunity to attend and to present at the bi-annual agribusiness seminar in Stevenson, Washington. It was not only rewarding, but very educational.
There were a total of 8 different presentations over 3 days. Subjects were dairies, water policy, cap and trade, ag cycles, troubled farm operations, supermarket produce sections, vineyard production, and finally, the subject presented by Brett MacNeil, due diligence for purchasers of farmland. After each one hour presentation, there were break-out sessions where each company and project was dissected, critiqued, and “rebuilt.”
Attendees at the seminar were growers, ranchers, bankers, economists, professors, and traders. All appeared to derive tremendous benefit from the 3 days. One of the speakers was the Chief Economist of Wells Fargo Bank, and not only did he have deep (and complex) knowledge of agriculture, he was a great comedian since economics is normally considered the “dismal science.”
Because several people commented that our due diligence presentation was one of the best, and because so many had initially been confused by the meaning of a “due diligence” study, we thought a quick outline would help. When originally asked to present by one of the board members of the Northwest Agribusiness Seminar, he had seen our study of a huge cattle ranch, and called it a “risk management” program as it dramatically reduced the risk of purchase for buyers of that ranch.
Those due diligence studies are one of our “core competencies,” and they include study of water rights, soil quality, GIS-GPS maps of all boundaries, past uses and production data, wells and irrigation improvements, recreational opportunities, animal units allowed, legal documentation, property tax assessments, building improvements, and any other detail associated with a ranch or farm. In the due diligence study presented at the seminar, Scythe & Spade was able to produce savings of over 10% of purchase price for the buyer who contracted for the study---a hefty return on investment.
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