Ep #03: Mastering Farm Finances and Tax Deductions with Bruce Eberle
What happens when a 5th-generation farmer becomes an expert in agricultural banking? You get Bruce Eberle, the CFO of Boa Safra Ag, who’s helping farmers tackle the financial challenges that come with working in agriculture. In this episode, Bruce offers key insights from his experience in helping farmers unlock new opportunities, reduce risk, and boost cash flow.
Listen in as he takes us back to the '80s, when ag banking was a very different world, and shares his take on the opportunities that come with challenging times. You’ll learn how Section 180 could be beneficial when it comes to tax filings, how Bruce works with Boa Safra to make it a simple and affordable process for farmers, and more.
Listen to the Full Episode:
What You’ll Hear About in This Episode:
The massive opportunity in agriculture right now.
Understanding Section 180 and the importance of being audit-ready.
The method Boa Safra Ag uses to gather soil data and assist farms in benefiting from Section 180.
How cash flow has been improved for farmers via tax deductions.
Preparing financially and operationally to deal with the impact of outside factors.
Ideas Worth Sharing:
“They say good judgment comes from experience, and a lot of that comes from bad judgment.” - Bruce Eberle
“That’s where the best managers are forged: in the fires of difficult and turbulent times.” - Bruce Eberle
“You’re going to be impacted by a lot of stuff, and you need to be ready for that financially and operationally.” - Bruce Eberle
Resources:
Bruce Eberle: LinkedIn
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Read the Transcript:
Bruce Eberle: The best managers that I've met in my lifetime, Brian, have had to solve some existential question for their business. I mean, we don't like to go through difficult times, but those are where the greatest managers are forged in the fires of turbulent times and difficult times and they find a way through it.
Welcome to The Land Ledger podcast, where investing in farmland meets the future of finance. I’m your host, Brian Kearney, here to guide you through the untapped potential of farmland as an asset.
Whether you’re already investing in farmland, want to invest in farmland, or you’re just curious about safe alternatives to stocks and bonds, this is your space to learn, explore, and be inspired.
Your journey to farmland investing starts now.
Brian Kearney: All right, thank you for joining the show today. Today, I've got Bruce Eberle with me. He has a background in ag banking that I'm really excited to dive into, and now he's the CFO of Boa Safra, which if you're in the ad world, you have heard about. They've taken the world by storm the past two or three years, and I want to dive a little bit into that. But Bruce, thanks for jumping on the show today.
Bruce Eberle: Hey, thanks for inviting me. It's nice to be here with you.
Brian Kearney: I'm excited to dive in. Before we get into Section 180, which I want to dive deep into, it's going to be really important for our audience to know and understand, Tell me a little bit about yourself. Where did you grow up? What was your first experience with ag, and then into the finance side? I'd love to learn a little bit about that.
Bruce Eberle: Well, I grew up on a farm and ranch operation in central Nebraska. So I'm the fifth generation of that farm family. And some of the earliest recollections I have around production agriculture was throwing a 50-pound sack of cube over my shoulder and running away from the sows and borers in the pen to scatter the cubes along the ground when we used to run them on dirt.
Of course, as a little guy, I was the one that got to scoop out the snow from the feed bunks, and I get to go ahead of the feeding crews and keep those bunks clean. So yeah, it was a great way to grow up. I would not trade a moment of that experience. You learn a lot of good common sense, develop some good judgment. I say good judgment comes from experience. A lot of that comes from bad judgment. So we learn those lessons when you grow up on the farm.
Brian Kearney: Right? Yeah, that makes sense. My father-in-law has hogs that he raises still on pasture, so it's a lot of work, but it's pretty neat too. I enjoy it.
It's more of a hobby. He does it because he can't give it up. Yeah, it's a fun way to spend an afternoon or a morning for sure. Yeah. Well, from there, how did you go from working on the farm to banking? It looks like you went to UNL. So sorry about that. I went to U of I. So might be the end of the conversation, but I'd love to learn a little about that.
Bruce Eberle: Yeah, it's a great relationship that Iowa and Nebraska have. So we're happy to be there, but yeah, my dream was to farm and my timing was bad. I graduated college with a degree in ag economics, the mid-eighties when interest rates were high and prices were low.
After about four years of that, I decided I needed to look off the farm to create some income to support my farming habit. So I did land in a nice ag bank at that time, a company called Norwest, that later on morphed into Wells Fargo. I spent a total of about 15 years in two chunks with that company, that group, and just really was enjoyed every minute of it.
Banking is not easy work, but you do get to work with the farmers and ranchers. And I was lucky enough to work with some specialized ag lending groups within these banking companies. And so I got to work with some of the really nice, large, complex, very sophisticated, and professional farm operations.
And so my experience in ag lending from Norwest to Wells, and then later on I spent 11 years then with RoboAgro Finance and worked all across the Western United States with various clients. And that's just a wonderful experience. We talk about how good the people in agriculture are and you just can't overstate that. These people, as we commented earlier, it is work, right? I mean, these are hard-working people, and agriculture for all the technology and the advances we have in systems, it's still work. You got to get up when the sun comes up and you got to work until the work is done without much regard for the clock on the wall.
So it's an honorable trade and I'm very pleased to have really been blessed with a lot of really great relationships with agricultural people over the years.
Brian Kearney: Yeah, that is something that people outside of the industry don't quite understand, unless they also grew up in rural communities, but the relationships and the people are so important.
It's the most important part. Everything else is secondary. So that makes sense with banking. You said you started in the 80s. That's a tough time to be an ag banker. Can you tell me a little bit about that time? For our audience that might not know?
Bruce Eberle: Yeah, I mean, we were dealing with interest rates in the mid to high teens at that time. When people look at their loans today and they say, Oh God, I'm paying eight and a half or nine percent on my loans. This is terribly high,” you know, because we were kind of grown accustomed to a fed policy of zero rates, but that's historically, that's really still pretty good deal.
We had very high rates at that time. And as people in agriculture know, maybe those that are outside of agriculture don't understand, but agriculture is a very asset-intensive business. It's real estate. It's equipment that's quite expensive. Labor's always expensive. There's a lot of capital involved.
And so there's almost always, not always, but almost always some level of debt involved in that operation. That's an impact when you're in those times, the best managers that I've met in my lifetime, Brian, have had to solve some existential question for their business. I mean, we don't like to go through difficult times, but those are where the greatest managers are forged in the fires of turbulent times and difficult times.
And they find a way through it. Business is like a giant formula, and we all kind of have to deal with the same general categories of variables in that formula. But it's been really interesting to me over the years to see how each individual manager solves each individual variable because there are a lot of ways to do that.
And so the best ones, they learn from lots of people. The best ones are great people at listening to advice. The best ones are really good communicators with their core team. If times are tough, they're talking to their banker and their tax planner, whoever that is, their agronomist, their production people.
They're just really good at communicating where they're at and what needs to happen. ‘Cause a lot of times we just. people kind of get shy about difficult times and it doesn't get talked about. And that's kind of the exact opposite of where you need to be in those moments.
Difficult times are, they're difficult. They call them that for a reason, right? We lose sleep and we lose money and we lose all kinds of things through those moments. But what we gain is that good judgment and the experience of figuring out the really difficult problems. And that's what I enjoyed doing was working with people.
When it's difficult, yeah, we just dive in and we talk about it. We work our way through it. But if you don't do a good job of building efficiencies and smart ways of doing business, and when times are good, it's going to be that much harder, you know, when times get tough. Because agriculture is a cyclical business. We get impacts from supply and demand around the globe, consumer preferences.
And at times, political things like embargoes can impact the business as well, or fed policy, access too. So there's just a lot of variables out there and it's a business that needs to have some guardrails on the financial and other areas of the business, just so that you've got a little bit of fallback if you have to right into that.
Brian Kearney: Right. Can you think of an example without using names, obviously, of a farmer who made that decision and what that kind of proactive nature, what that proactiveness did for their operation, like exactly how it helped them? Can you think of an example?
Bruce Eberle: I can give you one example for sure. I mean, one of them was a family operation that I worked with that I always had a lot of admiration and respect for because they were very plain-spoken to amongst themselves about what was going on in the business and the family, kind of the dad or the leader of this operation told everybody, I mean, “If you want to be a part of the family business, you've got to go prove you can work successfully for somebody else. And then after you do that for a few years, then you can come back and we'll talk about how you might fit into this business.”
And I always thought that was really kind of a smart way to position that, and then the ones in the business, he always made them leave for a couple of weeks a year to get out of everybody's here, kind of take a break from each other for a while. And they always had fun with their trips, but I think that just that plain-spoken, being clear and they had family meetings regularly to make sure that everything's kind of out on the table, you know what I mean?
And don't make it a personal thing, but deal with those hardships as they come through. There's times in a business when you do lose money, for those that are on the listening, that understand assets and liabilities and kind of how the balance sheet is built, there's times when your equity is just not right-sized for the asset base that you've got, and the only reasonable answer is to start kind of selectively and strategically selling or trying to find investors to take over assets so that you can right-size yourself again and grow and get back into a growth mode again. Sometimes we're dealt blows by forces that are way beyond our ability to control and that includes whether we've seen storms, I mean, goodness, just in recent memory, we've had the two storm systems that went across Florida and southeastern states.
And there's nothing you can do about that. You just got to hunker down and come out when the sun shines again and see what's left. And those are the kinds of things that when you grow your principal asset, your manufacturing crops and food, it's all done.
Primarily on the outdoors, we do have some greenhouse operations out there, but predominantly these crops are grown in the outdoors. and so you're going to get impacted by a lot of stuff and you got to be ready for that financially and operationally. I had one, I'll tell you another story about an operation that I worked with for years that grew potatoes.
And they're very, very, very good at their soil science and their production technology, and just understanding how that plant functioned. And I visited one of their farms after a hailstorm one time, and these plants were just pounded into the mud. It just looked like you'd run cattle across it or something.
It was just a mess. And doggone, if these guys didn't figure out how to manage that crop to a near budget result at the end of that year, I mean, when you're really good at what you do, it shows in the production and it shows in the financial results. And I'm just, like, again, I've just been blessed to kind of learn and be around people that are just exceedingly good at what they do. And that makes everybody's life really fun.
Brian Kearney: Yeah. Wow. And then from banking, when did you first hear about Boa Safra, and what made you decide to take that leap?
Bruce Eberle: In my work in agriculture finance, I had met both Bryce in previous discussions before Boa Safra and also Tyler and Amy Brooke, the two, Tyler and Bryce kind of built this business from an idea. I had met them previously and always had a lot of respect and always kind of consider that, when you think about people, you kind of put a label on them or a tag on them. And I said these guys are innovators.
I mean, they're doing things a little differently. they're coming up with new ideas and new ways to do things, and so I'd kind of stayed in touch and in my prospecting work, always included them. And when both software came around, I was like, “Holy cow.” I started digging into this because I'm thinking to myself as an ag lender, I've got a lot of guys that own real estate and this could be a real valuable thing for them.
And so I'm doing the research kind of vetting the idea and talking with some of my friends with expertise around taxes about it and then it was a little over a year ago, a friend, Tyler and I both have, you know, mentioned to Tyler when they were looking for somebody, “You should talk to Bruce.”
And so Tyler gave me a call and we had a few exchanges back and forth and it just was, for me, it was a chance to get back into an entrepreneurial pursuit. I've done that a few times in my life and always enjoyed those. And this has just been a really fun and challenging, right?
I mean, the first year is always challenging, any job, but you know, here we are in a company that's growing quickly and doing a lot of good things for people around the industry. So yeah, happy to have had the chance, happy to have had that referral, to get us connected and just a very fortunate to be on the team today.
Brian Kearney: Yeah, well, it's a good team that you guys are putting together and it's such a good product. It's truly a no-brainer. I know every farm we do, we're going to be working with you guys to get the Section 180. It's just a no-brainer. And there's still so many people that don't know about it. Like I shot over an interview a couple days ago with someone who's looking at buying a few farms through us and he's bought a couple already.
And I'm like, “Oh, well, yeah, we do section 180 through Boa Safra on all the farms that come through.” And he's like, “Whoa, you do what?” I'm like, “Oh, are you going to love this call.” So let's dive a little bit into how it does work for the audience. So can you go high level on what Section 180 is and kind of the particulars of working with Boa Safra?
Bruce Eberle: Yeah, Section 180 occurs in the Internal Revenue Code right alongside Section 179, where we've all known about that for a long time, the accelerated depreciation on machinery and those types of assets. So it's actually been effective in the tax code for, since 1960. It's been around a long time, but it wasn't used, and it wasn't used for good reason because two primary things.
One, up until the ethanol expansion, if you remember the acreage boom that we had for corn to feed ethanol plants back in kind of the 2008 to 2010 period of time, our inputs really just weren't that expensive. These types of inputs just weren't that expensive. We were all growing dollar 80 corn, so you couldn't spend like we do today on corn and other crops.
So the deduction is defined as the market value of those nutrients, of the crop nutrients at the time of acquisition. So when you acquire the land, either through purchase or inheritance, the deduction becomes available to you on that property or on that parcel. In the past, when soil collection, the data collection was kind of a long process, had to go through a wet lab.
It was kind of, you know, and when you got through with all that work, you're only talking about a deduction. It was really not a lot of value. So then we go through that period of time from 2008 to 2010 when both the corn ethanol expansion and some of the ways that we get our fertilizers changed and it became more expensive for producers.
We're dealing with costs in that area of our operation that are two, three, four, sometimes five to x what they were before that expansion. So those numbers went up quite a bit and that made the value of the deduction go up quite a bit, right? So that makes, that part of the equation gave more incentive for people to pursue this particular part of the tax code.
Well, then the second part of that was really what Boa Safra filled in for the land owner. And that's going out and doing all of the heavy lifting on the tax code research, going back through all the tax writings on this subject or the IRS writings on this subject, working with top tax advisors across the country to come up with the very best handling of the numbers, working with some of the smartest soil scientists in the country to come up with a methodology that's very defensible and fits within the tax code. So putting all that together and then making it easy through an online application and providing a lot of resources for both the landowner and their CPA, because the ultimate real result is this stuff lands on a tax return, right?
So we want to make sure that the CPAs are equipped and comfortable and ultimately, feel like they could defend this if it gets into an audit situation. So that's what is this, one in I don't know how many thousands of tax returns, kind of win the audit lottery. They get to go through that process.
And we just want, me and my kind of a banking career, every file I close, I want it to be auto-ready. So no matter what we do, whether it's internal or external for a client, we want it to be complete. Complete and accurate and ready for whatever scrutiny comes down the road.
So those are, that's kind of the two pieces we've, you know, the deduction value came up through that corn ethanol expansion and then the increase in the cost of these inputs. And then both software kind of packaged it in an affordable product that makes it practical for virtually any landowner to use this deduction for their benefit and their tax filings.
Brian Kearney: Yeah. What are some of those numbers at this time? And I'll preface, we're talking on actually Halloween day, 2024, but at this time, what does the pricing look like?
Bruce Eberle: We designed our whole business around being an independent third party. So the price of our product, we just do a flat rate by the acre. That flat rate covers the grid-style soil sampling, the data collection that we do on your farmland. We provide the, you get a nice soil report with the product too. So that's kind of nice. And then it includes all of the, like the publication and the tax. There's a little bit of the tax numbers that we put into the report for you to use in your tax filings.
And then we also provide CPA support and education so that we make sure that you and your CPA or whoever's doing your tax filings are comfortable and understand how this works and then we also do for those that get into an audit situation, which we've only had a handful over the last five years, four years that win the audit lottery and have to go through that process.
So that whole package of resources and services comes to the landowner at a total cost of 40 bucks an acre. So it's really not terribly expensive and it's kind of like an insecticide application, I guess. And you're getting a nice report on your soils. You're getting the benefit of the tax value. Our average across the country right now on the deduction value that comes with that 40-dollar cost is about 1,700 dollars per acre. Yeah, I mean, it's like a 10 or 12 x return on your investment in cash. Plus the cost of the report is deductible in the year you pay it too. So there's, if you've got taxable income and even if you want to manage for the future, there's ways to lay this into your taxes and make it, you know, offset some of your taxable income.
We see a lot of people that own real estate personally and have other sources of income and it works nicely to kind of help them reduce their total tax burden. For farmers, if they're owner-operators, this is a straight tax deduction. So you can take it all at once in your 180 deduction in a particular year when you buy the real estate.
And even if it creates an NOL, a net operating loss on your schedule F, you can just roll that forward and you can roll it forward until your earnings heated up. So you essentially get that ability to spread it over years in that fashion. Some CPAs tell us that they prefer to just amortize it, kinda lay it into the tax return based upon the average earnings of that operation, but those are tax questions. We're the soil people, we're not the tax people so.
Brian Kearney: Yeah. No, that makes sense and that's helpful. I have a few questions to dive in a little deeper, but the first one that we kind of brushed over, but it actually is kind of important is that flat rate and being a kind of unbiased third party. Talk a little bit about that.
Bruce Eberle: Yeah, we don't want, and this was developed in the early stages of this business, but we were advised and we agreed that this is not a, you know, we don't ever want to be perceived as incentivized to create a higher deduction. You know what I mean? We don't want to get paid a percentage. We don't want to get paid on some kind of a scale that rewards us if it's a bigger deduction. So we just do a flat rate so that what you get is solid soil science-backed numbers that we can verify. We can validate all the numbers and there's no, there's really very little human judgment in that.
I mean, we actually use a digital probe system. So it's reading the mineral contents directly out of the native soil in their environment in the field. So the data is very secure. It's very stable compared to other methods of analyzing soils. And so we're, and then we built our business, our system, so that data kind of flows throughout the system and what we call clean data pathways, so it's never being like rekeyed or handled in a fashion that gives us the risk of a typographical error or those kinds of things. So it's a reliable number when it comes out in the report and we can back it up clearly, back to every geo-located soil data collection point on your farm.
Brian Kearney: Right. which leads me to my next question. You said you've had a few times this has been audited. What does that look like? Have any of them been overturned?
Bruce Eberle: We don't really hear from our clients. We have–one of our tax advising CPAs is a gentleman named Paul Neifer, who's pretty well known throughout the industry, if there are farms or an ag-related CPA, because he's been doing education and blog publications for 20 years. So he does a lot of continuing education for CPAs and Section 180 is of course part of that.
And he'll come back and he'll tell us, “Hey, I was at a training and a couple of CPAs came up afterward and say, ‘Hey, yeah, we were audited on years that had one of these both software reports supporting it and the IRS looked it over and didn't make any adjustments.’” So right now of the audits that we know of, we're batting a thousand on those.
I think anybody that looks at the report can trace the numbers back. There is a little bit of calculus in there we do to make sure that the IRS rules are met, but it's all rooted in soil data that's verifiable and then market, the market values we can determine based on a database of historical market prices for any point back to 2010 so we can identify whatever those market values were when you bought your ground.
Brian Kearney: And for, I'm trying to think exactly how to word this, but some of the people I've talked to in the industry are a little nervous about some of the numbers you all are posting for deductions because I think the exact quote I heard is it's going to ruin the deduction for everybody. What do you guys say to that? What are your thoughts?
Bruce Eberle: Well, I would say it's just soil science. I mean, we're just reading the numbers out of the soil. We're not fluffing anything. We're not trying to amp up any numbers. I mean, one of the things that we do is we do test samples outside of our reporting, the data that flows through the reports. The data that goes into our reports is all derived from the top six and three-quarter inches of the soil.
So we're only reading a really pretty shallow portion of the profile of soil that's used by the crop. And that's one of the factors, one of the aspects of a Boa Safra report that makes it arguably very conservative and throughout the country, what we find when we look into deeper into the soils, maybe go down from six and three quarters down to 20 inches, is that the total soil nutrient load throughout that profile, at least down to the 20 inches where we've done our sample, test samples, is many multiples of what we're putting in our reports.
I mean, it might be four or five times the value of the nutrients that we're putting into the report. So even though the numbers are high, I would say, “Well, that probably means we're paying too much fertilizer,” right? But I don't think the fertilizer manufacturers are going to back off because we're getting these kinds of deductions, but it's a market value of, minerals that are in the soil.
And we're reading the soil science directly, out of the soils in their native environment. So it's very defensible. And I think the numbers do surprise people. I mean, I was surprised when I first heard it. In farming, you're so accustomed to living on these very thin margins that, you know, occasionally, we have those good years and then we live on really thin margins for a time. So when we hear like 1700 bucks an acre, gosh, that's like a quarter of a million dollars over a quarter. So that's a pretty big number, but they also, that's like 10% of what they spent on the dirt, I mean, it's kind of a, you know, this land has gotten expensive too.
So it's really just one tool in the toolkit, right? I mean, at the end of the day, you have to be a good operator and raise healthy crops and harvest well, do all these things well throughout that whole production cycle. And this is just one way and it only occurs once, right? This is a capital deduction.
It's not something that you do every year. It's a one-time deduction that's available at the acquisition date of the parcel. So in context of maybe the operations, it looks like a big number, but in the context of comparing it to what they're spending on the real estate, it's really not that very big of a number.
I mean, look at what we spend on combines and grain carts and tractors these days. We can write those off right off the bat, you know what I mean? And there's people outside of agriculture. You tell them that, “Hey, I can spend half a million bucks on a tractor,” and write it off in one swoop that year that I buy it or place it in service.
And they're like, “Oh man, that sounds, that doesn't sound right. That sounds kind of crooked.” Well, no, it's not. It's the way the code is written. And it's written that way because fortunately, we've had congressmen over the years, legislators over the years that understand how this business works and those are needed deductions.
So it's kind of the way the business works. It's a very capital intensive business. And when you look at these deductions in the scope of what you just paid for that real estate, we're just trying to help the edges off of the cost.
Brian Kearney: Yeah. And I would love to hear a story or two about how this has improved the cash flow or the operations of a farmer because earlier you said there might be times where you need to sell off portions of your equity. It's true. It's true. That might be what you have to do to make your whole total business viable and be farming to that next generation. But our goal personally as a company is to try to lessen that and have at the very least not sell off anymore.
Maybe when you're expanding only by a portion of it then is kind of our idea. And this seems like another tool where if you're in a tough situation, you just bought ground, this can make a huge difference in your operating cashflows. So do you have a couple of stories about that?
Bruce Eberle: It can. I mean, just for round numbers, I mean, let's say it's a 1,500-dollar soil nutrient deduction, and you're in a 30% tax bracket, it's a 500-dollar cash savings to you, right, for a 40-dollar investment.
So it does add cash back. In general, this is going to save landowners, land purchasers, 10 to 15% of the cost of the real estate. In general terms, I mean, land buyers, farmers, producers, investors are very savvy people. They know what the land will produce. That's part of, you know, if you're in Iowa, you know what your corn suitability rating score is on everything you own.
So they're very savvy about what they spend because they know what it'll produce. And so that's a, as the land becomes more expensive, what that means is that there's a higher production value there, and that's where a lot of the nutrients kind of play into that production value.
So there's a pretty strong corollary between the value of the real estate and the value of this deduction, this particular deduction. And that's why we can say kind of, in general, it's going to save about 10 to 15% of the cost of the real estate in the form of tax deductions. So in terms of a specific story, I don't know that I have a particular story. I mean, our clients are like, “Yeah, let's go.” ‘Cause cash is an important asset. I mean, I've explained cash to people in a lot of ways, but it's often useful to use a metaphor that people can really relate to. And on the farm, you tell somebody cash is like the oil in your crankcase, right?
You can run a long time and then you'll run due if you do a good job maintaining the crankcase. But if it runs thin or runs low, it's going to overheat and things are going to start season up and you're not going to be able to do what you need to do when it needs to be done. And cash is like that in a business.
If you run low on cash, things will seize up and you're not able to pay your bills on time. And then things kind of start to snowball. And so the really good managers and the good communicators, they're dealing with those tightness situations early before get into, you know, having to call people and say, kind of beg for more time.
There's a lot of flexibility lenders can do in those tight situations, realistically to help them through those situations. And I think the operators, need to be willing to put something on the table. To your point, we are putting cash on people's balance sheets essentially, and that if it's an investor type where it's mostly equity, they love the lower cost, right?
I mean, it's just a lower cost asset for them. It kind of amps up their returns. Those costs, you know, that lower tax basis when you take–the deduction on the real estate does show up at the end if you sell it, but most of the people that we deal with, I mean, they're buying this land because they want their kids and grandkids and great grandkids to operate it.
They're not really in that business of buying and then trading or swapping out real estate. So it's a cash advantage to an ag landowner and we put a lot of cash into real estate, right? We buy it, we make down payments, we make annual payments, we do all these things every year. And this is just one way to kind of incrementally reduce that cash burden of owning the real estate.
So yeah, I don't have a specific story for you, but I know just from the feedback and testimony, I mean, people are telling us that it does make a difference because now they've got cash that they didn't have before.
Brian Kearney: Yeah. And that, I'm going to steal that line. I love that line about cash. I like that a lot.
Bruce Eberle: Yeah. It's a good one. And a lot of things about life can be reflected in the physical realities around us. And it's always been kind of fun over the years to find those good metaphors that help people gain an advantageous perspective of their situation.
Brian Kearney: Right. Yeah. This has been a great conversation. I'll close up with one last question that I have for you. And it's, if you were to go back and you were starting again, right out of college right now, and you couldn't go into Section 180 deduction work. What area would you be looking at in ag?
Bruce Eberle: And you're asking me today? I mean, currently, I was 20 years old and coming out of college. And yeah, I'm fortunate to get to speak at colleges and a few other places. And I tell these students there is so much opportunity in agriculture right now. It just looks a little differently than what our dads and granddads have been doing.
There's things like the value added crops where you're getting, you're finding a way to produce in a fashion that is more, or I should say maybe nearer to the consumer in some way. So maybe you're growing a particular grain for a miller that's gonna put it in a branded loaf of bread, or you're going to create a product that goes to a specific buyer instead of just being generalized out in the market.
I mean, those are some really good opportunities. And if you want to be on the kind of the ownership production side, if you're more interested in, especially around technology, oh my gosh, there is so much happening in technology around agriculture right now. It doesn't matter if you like computer science, if you like, robotics, if you like kind of the innovative maybe startup side where, you know, like the devices that are coming out right now to measure, water and soil and climate and to level out your grain bins automatically and to do all of these tasks that are needful, but oftentimes, they're either cannot be done well without technology or they're done, we're making skills, we're making expertise available to everybody that generally has only been held in the hands of a few in the past, a little bit like what Boa Safra did with the deductions.
So there's so much out there, but I would, follow your instincts, but don't think that your instincts, your passions have to lead you out of agriculture because if you like agriculture and you like being around the people in agriculture and you like being in some dirt under your fingernails or tromping through a field, those are things you can absolutely do while making a wonderful living doing innovative and immensely productive applications in agriculture today.
It's a much broader field of work, a much more diverse field of work than what I saw coming out of college, count the number of years, but it's been a long time ago.
Brian Kearney: Yeah, that's great advice. We just had the founder of Sabanto on the podcast and that's a great example of the things they are doing in autonomous planting and harvesting that the car companies can only dream of at this point. It's pretty crazy and people don't think of agriculture in that way.
Bruce Eberle: Yeah, they don't. And there's some really cool stuff coming if you watch some of the you know, UC Davis is doing some interesting research on automations and agriculture and UNL is, if you've never been to their innovation campus in Lincoln, it's worth a visit.
Brian Kearney: Really, I actually haven't. My sister-in-law goes there, so I probably should.
Bruce Eberle: Yeah, go visit your sister-in-law and go drop in on the innovation campus and just look around. I think a lot of the people there would be really happy to just show you around. there's some very interesting stuff going on there, but I think what the U.S. producer is being faced with today is a choice between either being a very, very efficient commodity producer, where you're kind of always subject to that socialized market, supply, and demand, that's really a global discussion now rather than a domestic discussion, or finding a way to fit into a channel of food that's being produced for a specific end user and they each have great trade-offs.
You know what I mean? But you've got to be one or the other. In a lot of ways, it's really hard to be the kind of the traditional what I grew up in where we grew hogs, we had cattle, we had crops, we were circular in some senses because we fed crops to our livestock and then we use that nutrient coming out of those feed pens out on the fields to provide the nutrient back to the crop again.
It's becoming more and more specialized. You're either very efficient or you're under some kind of a, entering into some kind of a voluntary contract arrangement where you're being paid a premium to do certain things in certain ways for a consumer that wants their food to have certain attributes, right?
And there's opportunities in both those fields. It's just different. You know what I mean? It's not the way we used to do things.
Brian Kearney: Yeah. Yeah, absolutely. I appreciate the time today. It's been a great conversation. I'll put in the show notes a link to you all. For any investor who's listening and thinks they need to get this deduction, I recommend you reach out.
Bruce Eberle: Yeah, we're welcome. we're open to talk. We spend a lot of time just visiting with people and helping them understand the process. We're all really just a bunch of farm kids. We don't, you go through our staff and everybody's either on a farm. Many of us are still producers and this is just something that we want, that we enjoy doing to help others, just yeah, just utilize the existing tax code more fully. It's been there a long time. There's no reason not to use it. It's just a deduction that's been overlooked for a long time.
Brian Kearney: Absolutely. Absolutely. Well, thank you for the time. Train's coming right now, actually. So that's perfect timing to wrap up. All right. Thank you, Bruce. Great to see you.
Bruce Eberle: All right, Brian. Thank you so much.
And that’s a wrap on this episode of The Land Ledger.
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