Amazon-Whole Foods Could Transform the US Food Market — In a Good Way

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And food stamps will help them do it.

American farming, on any meaningful scale, is driven by one thing and one thing only: the almighty dollar. We’d all like to think that producing the food and fiber that nourishes us physically, mentally, and emotionally is about more than economics — but at the end of the day, farmers have to eat too.

That’s why Amazon’s proposed acquisition of Whole Foods is such a huge deal. When I spend time with farmers, many of them big commodity farmers in the Midwest, they (generally) aren’t ideologically opposed to growing organic or otherwise changing their management practices. The biggest reason they don’t do it is because it’s expensive, and there usually isn’t a market for it. And when they say market, they mean in the most literal sense — there is not a physical place where they can easily, and with certainty, go and sell thousands or millions of bushels of whatever they’ve grown for a good price (or any price, these days). Few local elevators separate organic produce, and otherwise finding specialty buyers and storage takes a whole lot of time that farmers don’t have.

Many farmers don’t grow organic because they don’t know where to sell it. But Amazon could change that.

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The Future of Farming is Not Farming

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From driverless tractors and robotic pickers to technologies that preserve fresh produce 5x longer, we are obsessed with using technology to solve the many, many challenges in our food system. But after spending a few days in Omaha this week, hanging out with some of the most advanced and progressive farmers in America, I realized that technology is really just a small part of the solution we’re looking for. The real future of farming isn’t growing plants or animals; it’s growing businesses.

Don’t be confused, farms are already businesses — incredibly capital intensive and highly risky businesses at that. In one year, a farmer might buy a few million dollars in inputs and assets, sell a few million dollars of commodity crops, and come out in the end with something like $30,000-$40,000 a year in “profit” (read: wages). That’s a terrifying amount of risk to take for a meager reward. And farmers do it. And now, at a time when commodity prices are cripplingly low, they’re looking to mitigate some of that risk with new businesses on their farms.

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