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Agrimoney LIVE as it happens - day two conference diary

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That's all from Agrimoney LIVE for today. See you back online for the third day, tomorrow.

Do get in touch at newsdesk@agrimoney.com.

17:50 Core values

When it something delicious not delicious?

When it is a red delicious apple – a fruit which, according to Paul Pittman, the chief executive of Farmland Partners, "tastes like cardboard".

As a boy, he used to have them at school in his lunchbox – before US consumers twigged that an apple that looked as if it came from a fairy tale might be best consigned to history.

"They are now almost extinct," Mr Pittman says, seeing the fruit as symptomatic of woes of a US apple industry that "the Clinton administration had to bail out, paying apple producers to rip out plantations".

The moral of the story, Mr Pittman says, is to be very careful before investing in land with specialist crops, as opposed to less glamorous grains.

"There is a lot of concern over performance risk wrapped up in specialty crops," he says.

17:30 Chasing unicorns

There are four ingredients to making a fortune in agtech.

And one of them is you. At least, if you fit the description of being a "very unique founder, who is dedicated and passionate about his idea, and who is a serial entrepreneur".

So says Sarai Kemp, vice-president, business development for ag at Israeli start-ups incubator Trendlines.

She cites the example of MobilEye, started by Amnon Shashua, a computer science researcher from the Hebrew University, which ended (via New York IPO) up being bought by Intel in March for $15.3bn.

You also need: "an urgent market need"; being involved in an industry which is "very conservative" and "limited in innovating their existing product lines".

The fourth requirement is time. It took MobilEye "time to be exited – more than 10 years of significant sales under their brand name".

That's all very well, but MobilEye is in the automotive space, you may say. (It creates technology for avoiding car accidents.)

Is there no hope of an AgTech giant in the making? A unicorn indeed (ie as start-up that gets its valuation up to $1bn).

Ms Kemp returns to ingredient four, and urges patience.

"It takes time. Silicon Valley took 50 years to develop Unicorn companies."

Not only do you need top be unique, dedicated and passionate, but long-lived too.

14:40 Rock the casbah

Ayatollah Khomeini must be spinning in his grave.

Mark Stephens, at Blackstar Capital Partners, compares Iran with a nightclub.

(The Ayatollah, you may recall, banned broadcasting of any music rather than Muslim ditties on Iranian radio and television in 1979, the same year he was named "man of the year" by Time magazine.)

"Iran was like the best nightclub in town," says Mr Stephens, speaking of investment in the country following the lifting of UN sanctions last year.

"Everyone was lined up and dressed to go."

"But it never happened," Mr Stephens says, amid a discussion on trade finance, and flagging too the cloud that Donald Trump, the US president, placed over Iran on a trip this week to the Middle East.

Where is Blackstar investing instead?

The aim has shifted further south from Iran, with Mr Stephens saying that "we are very interested in the GCC countries," ie the Gulf of Arabia nations such as Oman, Qatar and Saudi Arabia (which is, of course, more popular with Mr Trump too).

"Banks there are constrained as they are here, but the non-bank sector is not as well developed," so offering opportunities.

12:35 Green ham and eggs?

How's this for investor logic?

The world's supplies of farmland look extremely tight, if the world is to meet the increased population needs of 2050.

In terms of getting calories to consumers, it is far more efficient in terms of plant matter, than meat.

So the answer is to promote vegetables grown in the ocean.

"Ergo, the future of food is seaweed," says Michael Moore. As well he might as a member of the advisory board at Seamore, which processes seaweed into the likes of pasta and, um, bacon.

That is, bacon of a green colour historically associated with cuts left languishing at the back of the fridge for a few months beyond the best before date.

Still, that does not seem to putting everyone off. Sales of the product have "gone ballistic", Mr Moore says.

So much so that the company is being tested to source enough seaweed, from the likes of Ireland and Brittany, and has a "challenge persuading people to put on their waders and pull the stuff out of the sea".

Which is one reason why Seamore (not the first weed seller to be started by a Dutchman, methinks) is raising some E2m.

The verdict of Roberto Viton, managing director at Valoral Advisors? "To be selling food before lunch is very smart".

11:45: Some things best kept private

If ag groups are losing patience at the cheapness of their shares, maybe they should exploit the situation by buying the stock themselves, says Skye Macpherson.

Asked about the weak valuations attributed to farmland companies, she says that "going private would be a really good idea".

Some of them are trading "at a 50% discount to the value of their land", she says, implying easy gains from a buy-out.

But wouldn't the ag sector miss the loss of a swathe of its listed companies?

Apparently not. Ms Macpherson says that "we have a lot of companies to choose from, in different regions, different subsectors" when it comes to buying ag sector shares.

"We do not have a lack of opportunities."

Indeed, she highlights some new ones, with the spin-off of an ag-only group from the Dow-DuPont merger, and the growth of FMC Corp into a scaled-up agrichemicals group.

11:05: Bargain Bunge?

More on ag sector consolidation from Skye Macpherson, director, natural resources at investment giant BlackRock.

"What the level of mergers and acquisitions shows is that companies operating in this industry see value at the levels."

Indeed, Glencore's approach to Bunge, revealed overnight, looks "a reflection that Bunge is trading on so low a price-to-book ratio".

09:00: What to make of Glencore approach to Bunge?

For some reason, big news in ag always breaks when Agrimoney is having a conference.

This time, it is Glencore's revelation that its part-owned ag division has made an "informal approach" to trading giant Bunge. (What made it informal? Were the Glencore suitors not wearing ties?)

To one senior delegate at Agrimoney LIVE, this looks like the latest episode in the consolidation wave that started in seeds and chemicals, with the rash of tie-ups with DuPont-Dow, ChemChina-Syngenta, Bayer-Monsanto and BASF, um…

And could it be a sign that the ag sector is on the up again?

"It looks a sign that sector valuations are attractive, if there is all this consolidation going on," the delegate says, flagging the dent to profits in sector from the decline in crop prices.

There is more on sector M&A scheduled in the Agrimoney LIVE programme. Stay tuned.

By Agrimoney.com

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