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Hello and welcome to What Goes Up, a weekly markets podcast. My name is Mike Regan, I'm a senior editor at Bloomberg.
And I'm Valdana Hirek across acid reported with Bloomberg.
At this week on the show, well, we hope you had a good meal before you hit play on this podcast
because we're going to be talking about food.
A lot about food.
But namely the opportunities and risks on the investing table amid a swiftly changing global food supply chain.
Our guest is an executive at a major asset management firm who recently helped write an in-depth report on this exact subject.
But Valdana, before we bring him in, I have to ask the big buzz, I think on this topic lately, cultivated meat.
Cultivated meat.
Oh, lap-grown meat.
You're not a meat eater, correct?
No, I'm not. And just the idea.
Really?
It's exciting.
Well, I would feel like if I were you, it would excite me.
Has anybody had lap-grown meat?
Someone somewhere has, yeah.
Like one person.
I think so.
Maybe our guest knows the real answer.
Maybe he has had it.
We'll see.
I want to bring him in.
It's time or high yet.
He's the chief operating officer for PGM.
Thank you so much for joining us.
It's a pleasure to be here.
Have you had lap-grown meat?
I have not had lap-grown meat.
But very recently, the FDA just announced that two companies are allowed to start producing lap-grown meat in the U.S.
And it's safe until then the only place you could get lap-grown meat was Singapore, where they introduced chicken nuggets a couple of years ago.
So, Mike, you may be able to have your wish sooner than you think.
But timer, from reading your report, I don't get the sense that you and your team are very bullish on the concept of cultivated meat.
Talk us a little bit about where you see that space going.
He said it's more sizzle than steak.
That's pretty good.
Yeah, that's really good.
That was a podcast with the bun.
Yeah, they're a whole variety.
I mean, there are lots of areas we excited about investing in.
But they're definitely a bit like Bitcoin and other cryptocurrencies in the crypto space.
They're definitely some bubbles in the food chain as well.
And cultivated meat is maybe not a bubble.
I think our main issue as an investor is it's too early to invest.
There are literally hundreds of companies around the world that are trying to do different kinds of cultivated meat.
And it's pretty much impossible at this stage to know which one's going to win and which one's going to lose.
So we would say even as a venture capitalist, it's too early to go in.
There will be some winners over time.
They're the ones who are going to solve the scale problem.
It is just so expensive to get that chicken nugget or that beef steak cultivated at this point.
That it's just not feasible for it to become a mainstream food item around the world.
It actually costs some multiple of the real thing at this point, right?
Way more.
And the only place where we see progress at this point is actually not in that actual finished good way.
You will want those charm marks on your steak and you'll want all that flavor.
And you won't get that in cultivated meat yet.
But they are taking things like egg whites which go into cakes and pastries or way which is part of how they make yogurt in Israel and other places.
And that's where cultivated versions of those products could be could get cheaper quicker.
So that's where we're keeping an eye on first.
That's where the first investment opportunities will arise.
But it's too early. It's not a bad opportunity.
You just don't want to be 10 years too early to something.
I'm already hungry, Lodona.
I've had the eggless mayonnaise or whatever.
Yeah.
It's pretty good.
Yeah.
I know that's slightly different, but you know.
I can see trends evolving from all of the different branches.
There's a lot of changes in how consumers are behaving around the world.
And that's actually one of the big drivers of investment opportunities.
Including things that are more human and things that are more healthy.
So eggless mayo would definitely fit that category well.
Before we talk about all of this and the investment implications,
I actually want to ask you what made you look into food as a topic, especially an investment topic.
I mean, beyond the fact that I'm a big foodie, the reasons we as BGM went into this were a couple.
We think first of all that food is not just 10% of GDP, but 40% of the labor force.
So a lot of people work in this industry and we're defining food as from farm to fork
and everything in between processing, packaging, preparing the seeds all the way to end retail.
So it's a big part of the labor force and there's been a lot of focus on labor and inflation and so on.
So that was one driver.
But the second one to really write this report and to think about its investment implications
was that we think food is where the energy sector and this whole talk about energy transition
was about 10 years ago.
We're like 10 years behind in the thinking and it's going to catch up because the current food system
is simply not fit for purpose.
It is not going to work for our planet.
It's not going to work for our consumption needs for a variety of reasons that we can get into.
And that debate on how do we transition this, even if it takes 20, 30 years
to the new food system of the future has happened that carbon transition funds,
there's renewable energy, there are opportunities, there's the inflation reduction act and lots of money going there.
It hasn't happened to food yet, but we think it's about to.
And that's why we thought it was an interesting time to write about it.
Yeah, absolutely fascinating topic.
And I wonder if that making that transition what's one thing to get people to stop driving gasoline cars
if you can give them an electric car that's just as fast, just as reliable.
But food I feel like will be a little bit trickier.
And one portion of this report that really caught my interest was you talk about when a society becomes more affluent,
when per capita income goes up, people's diets change.
And I found that fascinating.
Could you talk to us a little bit about what changes in a diet as a society sort of gains more income?
Yeah, historically the main reason we needed more food for this planet was that there were just more people on it.
Population grows, everybody needs calories, more food has to be created.
But an important shift is happening in one new hit mic, which is now we have as perhaps an increasing influence
is the fact that particularly Asia is developing a new emerging middle class
and they have the same wants and needs and desires as people in developed markets do.
And that means a not just more calories, but more protein and more calories
that are increasingly converging with what we call the Western diet.
So there's more, more meat in it, there's more chicken in it, there's more, more pork in that diet.
And those are calories that need to be exported.
You can't just all get them in Vietnam or in Thailand or in China.
There's much more export supply chains ironically where everybody's trying to simplify them after COVID
are going to get more complicated because people want the same food in more and more countries of the world
rather than just the local food.
And be that food itself has a bigger climate footprint because of all the methane
and greenhouse gas emissions that come from the farming system.
And now more people want livestock, which is the key creator of greenhouse gases.
And see, it means much more pressures on the governments in these countries
to provide the resources, to provide the infrastructure so that people can get these new forms of Western diets that are frankly
maybe a little as healthy for them as well.
Definitely more costly, require much more importing of things from around the world than you did before.
So it's a pretty radical change.
And finally it does mean the food system doesn't just need to cope with more population.
It needs to provide many more calories even to each person on the planet.
So you have all of these different findings.
One of them is that climate change is causing a 12% decline in crop yields.
So I make this point to show that there's really a lot of geopolitical implications for this as well, right?
Yeah, so the climate interlinkage is actually quite interesting and complex because it goes both ways.
First of all, the fact that climate is changing is changing our food supply chains.
You have less fish in the ocean when oceans are warming up.
You have new kinds of fungi, even if we haven't seen the HBO TV series.
I'm watching it right now. It's so scary.
The new kinds of fungi, the new kinds of insects and that require new pesticides because of warming climate change.
And with heat, it's harder for labor to work in conditions in many parts of the world where you do have manual labor.
80% of Indian farms, for example.
And crop yields have declined.
So first of all, you got this effect from a changing climate, a more extreme climate, reduces crop yields, creates more variability, adds new threats and risks.
And then second, you've got the fact that the food system, as we have it today, itself changes the climate.
Something like 30% of greenhouse gas emissions, which cause global heating, come from the food system.
70% of fresh water consumption is not all of us drinking waters to have two to six liters a day.
But it is because the food system needs it to grow crops and so on and so forth.
So you've got a very complicated interrelationship.
And frankly, it's one that's unsustainable and needs some new ways to thinking about food, to create a food system that can meet our needs for the future.
So talk to us about some of the new ways.
What's on the horizon that will alleviate some of these issues that you're talking about?
So one that comes to mind is how agriculture has changed, what we call ag tech.
And there's precision agriculture, which is about how can you really take sensors and data from satellites and information on what's happening in the roots of crops,
and make that available to farmers around the world so that they can grow crops more quickly, more productively at a higher level.
Frankly, there hasn't really been a revolution outside of the US and Latin America.
So in the big grain baskets of Ukraine and Asia and Africa, since the green revolution of the 1960s.
That was when a lot of new seeds were introduced, as long as you had a lot of irrigation, you could really raise your crop output.
But in those parts of the world, you still have very manual, small farm holdings, and there really hasn't been another revolution.
The mechanization hasn't happened and this next generation technology hasn't come there.
So you now have this sort of world where US and Latin American farms are taking all this new precision agriculture.
You have seed throwing, you have plantation, you have knowledge about when you need to water plants available at the fingertips or farmers in these markets.
And then you've got this massive gulf and another universe where things are still very basic, it's manual labor.
They may be like bullock drawn, guards that are harvesting fields.
And there is where there's a massive opportunity to take all this data, take all this information, get it on mobile phones,
because people don't have fancy computers in emerging markets, and really revolutionize agriculture and create much more food and calories for the world.
Okay, so you said investing in the food system provides opportunities for investors to further ESG goals and have a measurable impact.
So maybe can you talk about the ESG aspect of this?
Sure, so again, it's a great analogy to energy 10 years ago where the first sort of reaction to energy was,
we're going to stay away from the oil and gas sector and we're just going to focus on solar and renewables and hydroelectric.
And then it became clear that solar and wind and hydro power on its own wasn't going to meet our need for the next 20, 30, 40 years.
And so the carbon transition required investors not to just separate and disengage from all the oil and gas producers,
but find what I like to call kind of the not the not the greenest of the green only, but stay away from the brownest of the brown and kind of find the in between khaki, renewable and fuel providers,
including Shell and BP and the big companies to encourage them to make the transition.
And the opportunity for the ESG investor is not to move away from beef, not to move away from livestock cultivation,
but recognize that the livelihoods of billions of people around the world and the calorie needs of a rising issue that does need its middle class to be fed
requires that for a while we will need all these forms of production to be maximized, but find better ways of doing that, find greener ways of doing that.
So engage rather than disengage, but really find okay, if they're nitrogen burst fertilizers, which are not particularly good for the environment, what's the next best option?
If somebody is using up too much water for their farmland because they don't have modern technology, how do we get modern technology there?
And that requires ESG to engage in all these sectors, not stay away. Another great example is packaging.
Like you still need packaging, people in developing countries and in emerging frontier markets want their food to be as safe as we have in the US.
And to do that, you need various kinds of safe modern packaging. How do you invest in that in greener packaging, less packaging, not withdrawal from the sector?
So we think there's a huge role for the ESG sector, and I would say an even bigger data gap than exists in the energy world. There's very little data on what's good, what's bad.
We all confuse this consumers, investors are equally confused because the data doesn't exist.
And we really need to ask all the food companies to start providing the same data that the energy sector is now providing so that people can make informed decisions and investors can make informed decisions on ESG gold.
I want to get back to that notion of geopolitics as well. And obviously from time to time, food security can be a major geopolitical issue.
You don't think of the Arab Spring a decade ago, even just more recently with the war in Ukraine, Ukraine obviously a major grain producer.
And there were all sorts of questions about supplies from Ukraine. Do you see this sort of geopolitical deglobalization that's happening in a lot of industries?
Is that going to hit the global food industry as well? Or is this sort of hunger for meat and protein enough to allow the world to kind of stick closer together when it comes to food if not semiconductors and other industries?
How do you see it going as far as geopolitics and food? Is it going to be a local market or so? Or is there potential for sort of multinational dominance from some multinational corporations?
So maybe a good chance to step back and I'd say we found four reasons why investors should care about this food system, even if they're not foodies.
And the first one is if they care about ESG and many, many, many do, there's a real connection between climate change and the food system and their ways to help make it a better food system.
The second factor was simply the incredible investment opportunities in the food sector and we can talk about a few of them that investors regardless of their motivations may want to capture the risk return opportunities that are available to them there.
The third which we haven't talked about yet is just how inextricably linked food prices and inflation have become and therefore food supply and food demand what it means for food prices and therefore what it means for inflation and all the headlines and all the monetary policy decisions.
As you try and bring back inflation in Europe in the US and many countries around the world and you've got to figure out the food equation piece of that and the fourth is the one you mentioned, Mike, which is if you want to understand geopolitics but within a country and between countries, you've got to understand food because it's such a sort of primal important necessity that everybody wants.
And across borders it's driven things I think it's come to light for two reasons one covid and everybody recognize that their food supply chains were too scattered and too far away and since covid I think food security has become national security and you've seen for example in in in Congress lots of discussions around for example should Chinese companies own US agricultural land.
And that same debate is being echoed around Latin America and Africa and Asia and other parts with the Chinese owners of the land system and then you're seeing it also playing out domestically you see it in Peru you see it in India you see it in France where farmers are very important lobby and when you hit farm subsidies which are massive in some of these countries you really get a massive political reaction.
So it's a big domestic stabilizing or destabilizing food potatoes go up 20% in India you could have a new government at your hands it really makes a difference and then geopolitically I think between covid and Ukraine there's been a recognition that we need to figure out where the supply chains are because we've got to get food security for our population.
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It's probably a little bit of both Vildana I think they're definitely opportunities and I think compared to certain other sectors they're probably under recognized and under appreciated which is one of the reasons PGM wrote this report.
And we have the unique ability because we have a big real estate team private credit we do fundamental equity we do bonds.
So we kind of approach the topic from four five different angles and where's the opportunity so for example one opportunity is called storage everybody thinks of real estate in the first thing that comes to mind is offices and nobody's going to offices any longer in the u.s. in Europe and there's a crisis in the office sector and and I think the outpressures there but cold storage and the logistics and distribution that you need around cold storage is a very significant opportunity with very high growth rates in the real estate sector.
That entire ecosystem of real assets and then the storage for them is a big opportunity and it's really linked to the fact that 40% of food around the world is just wasted in the u.s. in Europe it's wasted at the end the end consumers all of us are probably not as efficient with food as we should be.
And in emerging in frontier markets it's all happening in production getting it from the farm to the retail store front is where you lose all the food and cold storage can absolutely be critical in changing that so we see that is very much as a as a global opportunity.
On the other end of the spectrum for debt holders for for bonds there's some really safe spaces the consumption of energy drinks and and alcohol in in cans is going up you've seen all those applesauce
and and baby food things in those vouchers that are openable and sealable so plastic manufacturers of these fairly specialized food equipments that you really can't get other people to make very quickly are a very safe place to be.
Another good example of a safe place to be where there's lots of long term opportunity is all the franchise holders in developing countries the Pepsi Cola bottlers the people who are making well recognized foods in big emerging markets.
Everybody's getting towards them they don't want to take a risk with smaller less known brands and then we started this discussion with meat and it's probably worth mentioning it again again as a debt holder you're not going to get like equity like returns don't look for cryptocurrency type returns which by the way don't exist in cryptocurrency don't look for them here but in meat production.
And the more you mean the more ESG friendly end of meat production there's definitely another opportunity because we've seen with plant based meats if somebody talked about impossible burger we've seen with cultivated meats at the beginning of this discussion they're either not going to succeed based on.
Demand and appetite or they're going to be a long way away and therefore these core opportunities in in those sectors exist.
Yeah there was so much hype about plant based meat for a while there impossible burgers I like them do you yeah I think you're in the minority though I don't think they're really catching on it seemed like for a while everyone was willing to try it you know they had the the whopper had an impossible whopper what do you suppose happen there time or is it are they not quite there yet where where regular meat eaters will swap in an impossible burger what what is sort of the the headwind to plan.
And I think some of them are silently retired that offering but in any case the market is still a minuscule portion of the meat market it hasn't taken no off and and the stock prices of this companies have not lived up to the
hopes that some people had been on them and I think it comes down to something very simple which is people like the tastes and the flavor and the consistency of actual products right and and plant based meat doesn't quite do it and and frankly there might be more opportunity in cultivated meat again not investment opportunity now in the in the long term there.
And I'll tell you about another thing that I think got a little over high which is vertical farming this is farming that doesn't happen in a big field in Kansas but is happening in an urban center could be outside New York City could be outside Jakarta and Indonesia imagine an urban center and you're farming in a building where all the kind of factors of production all the things that create the end and farm produce is being provided by mechanically or digitally.
So you've got lighting and water that's fed to a vertical farm that's grown in a small space in a peri urban or urban location and there was lots of hope that this would change both food shortages and create a new way of growing that was more sustainable and and the honest truth is while you know I think it's still a worthy social endeavor it.
Simply means that when the most expensive factor of production and farming which is light doesn't come for free as it does on big farms or small farms around the world but has to be created by using up energy it's no longer cost efficient to create it that way and therefore impossibly hard to scale it.
And that makes vertical farming not a great investment opportunity at scale for investors of course if they're only looking for ESG gold it might be but from a risk return perspective like plant based meat it hasn't quite lived up to the hype.
I think I read a story they were trying to grow strawberries this way in new work I think oh yeah that's right remember but they were super expensive right they were really expensive some of the stuff I've had a lot and we have some very good vertical farms in New York because Peejam is headquartered there in New Jersey.
Some of the produce is really really good and fresh and it gets to consume as much quicker than you know your whole foods might if it's coming from you know 3000 miles away but simply the the cost per unit isn't isn't there yet.
Yeah yeah you threw out a number there and I remember reading this in your report that is kind of mind boggling to me and that is 40% of food is wasted at some point in the supply chain between production and food.
And getting to your refrigerator I suppose to me if you believe in efficient markets that seems like wow there seems to be an opportunity just in reclaiming that lost food am I crazy to think that is there any sort of effort to say hey wait a minute where's all this food going how do we reduce that 40% or how do we capitalize on that.
There are the one I feel has most promises what's happening in in countries mainly emerging markets frontier markets where a lot of food is grown where the food is lost in that wastage happens in trying to get it to you the end consumer and somewhere in that chain either at the farm or in the storage at the farm or in the road transportation to get it to the city to move it from the warehouse in the city to the end retail consumer.
A lot of food gets wasted in the process and a lot of work is happening whether it's the world bank and the development institutions or venture capitalists but the big food companies are really trying to cut down that waste and that's about the kinds of seeds you use it's about cold storage and opportunities and cold storage it's quicker transportation.
Better retail packaging and I think there is hope for all of us that we'll cut food wastage there and 800 million people who are don't have enough food to eat as they need every day so there's a big opportunity not just for investors but probably also to create a create a better planet we can be proud of if you attack that absolutely.
The second piece is in the U.S. in our market in Europe and in developed markets where most of the food is wasted at the restaurants or in the end household and that I think Mike is much harder to change that's changing end consumer behaviors you are seeing an attempt to take food waste and turn it into processed food and you are seeing companies with names like misfit or imperfect in it to trying to take all the food that is not considered the tomatoes not well shaped enough for somebody to buy.
And actually package that and I think there is some opportunity there but I think changing consumer behaviors is much harder than introducing cold storage and improving the transportation chains and emerging markets to count to food waste.
I'm doing my share this is the dad in me speaking, if Mike you eat the ugly tomatoes well no if my kids leave 40% of their dinner on the table I always end up eating it.
And then I had three kids you do the math I end up eating 120% of it I probably should have.
Yeah for sure but you mentioned emerging markets and I am wondering and this is a big question but like what are the implications for emerging countries or which ones are you thinking about?
I think some of them are really around the fact that emerging market consumers want fresher food and safer food.
And increasingly people both men and women in emerging market households are not working at the home they're working in urban centers women and increasingly part of the workforce so they're not able to cook food from scratch.
So ready to make food not necessarily the ghost kitchens that we talk about in the US which is just just for delivery but definitely prepackage safe things that they know that their kids can eat ugly or beautiful tomatoes that they can eat and and be healthy with has become a much bigger part of the food industry.
There they're absolutely investment opportunities in that area.
I think the second one is the supply chains and making available to people the diets that now crave which includes for better or for worse you know more sugar more dairy products and more meat and how do we get to the rising middle class in Asia.
Access to these foods and how do you create a food system which at the moment is not fit for purpose that will harm the environment that doesn't create enough calories that doesn't get it to the right people.
How do we kind of shape the supply chains in ways that these people get the calories they need while still fighting the obesity epidemic while we do all the nutritional education and so on.
So the big opportunities are actually for international grows of foods that are increasingly being demanded by rising middle classes in Asia.
I'm showing the next 20 years in Africa as well as kind of the young population their rises and then ready an opportunity in convenience and branded packaging of foods which at the moment are informal unpackaged and increasingly people in emerging markets are little shy about going there.
And I assume when you're talking about a rising affluence in emerging some emerging markets does your focus tend to be more on food at home or is there a restaurant segment there that is also going to increase in in demand in those economies.
We haven't seen a big opportunity in the in the restaurant sectors investors it's very fragmented margins and it's a tough business to be in.
Of course you've seen some venture capital in ghost kitchens and so on but we haven't seen that identified as an investment opportunity.
I should say as we look at the investment university at our company at PGM we only look at opportunities we would consider in one of our portfolios already investing it in one of our portfolios.
Maybe the bigger opportunity we see which again is I think under invested in even by institutional investors by pension plans and so on and certainly I think individual investors and we need to find better ways for them to access it.
But that's agricultural debt and equity farmland investing both in the equity side and debt side and I know I know both of you have talked about that in the past.
But that is definitely an area which is a good inflation hedge which everybody's thinking about now it's pretty uncorrelated with stock markets and bond markets.
Particularly if you're in the permanent end of the road crops rather than the ones that are not you can find some parts of the world California is a good example Mexico's another one parts of Australia or third.
We can really find investment opportunities and also support sustainable farmland techniques as well and we still see that as a pretty small percentage of people's allocations.
I don't think it's ever going to be 10% but everybody should probably think about should there be 1, 2, 3% in farmland.
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You read my mind because I was interested in if somebody calls you and says I'm interested in farmland as an investment what you would tell them or where you would tell them to look.
So we are one of the big investors in farmland but not even talking our own book.
It's very clear over 30, 40, 50 years from multiple market cycles that that farmland has shown good inflation characteristics.
And be what a lot of institutional investors are trying to do is not just try and earn that extra point of return.
They're trying to diversify their portfolio and create more stability for their end beneficiaries, the people they need to pay out.
And farmland has worked really well as a way off of diversifying your holdings.
So our key questions is do you want to be on the debt side which is more yield and it's not just the commodity returns which are quite can be quite volatile but actually just the farmland ownership or do you want to be on the equity side.
But both are pretty safe. We mainly invest in developed markets.
We don't take the risk of owning emerging markets farmland so we don't have investments in China and so on where the regulatory and ownership risks become much higher than say the US Australia.
I wanted to go back to that notion that you were talking about cold storage and that to me makes a lot of sense as an avenue of growth especially in emerging markets and whatnot.
But as a real estate play just how how do the particulars of that work are there cold storage reats that I'm unfamiliar with or is it is it you buy a warehouse and rent it out to what are the sort of details of how that works in this investment.
So the way I invest is invested in it is still in a more diversified real estate investment.
I haven't checked on the on the cold storage reats but probably somebody should Google that and they might be out there.
If they reach for everything. If not we can start.
It might be it might be in another business opportunity spawned by spawn spawned here but within those portfolios absolutely their buildings and warehouses that are designed with all the cooling facilities and refrigeration that's needed for modern produce to be at the optimal temperature to be in good condition when it gets to the end houses and that's a very specialized kind of facility.
Yeah and we very much look to those in terms of investment opportunities there's a good parallel with biotech right to actually house a biotech lab there's actually a big opportunity in real estate because you need very specialized buildings to put all the machinery and equipment and the temperatures you need for that as well.
So these kind of specialized places is where a lot of the real estate opportunity is I might put it in the broader opportunity because online shopping is growing right and maybe pre COVID we all bought I don't know staplers online but now more and more people were willing to buy even their their tomatoes and their apples and their and their chicken online and the logistics required for that in the distribution facilities and warehousing is massive.
So that's a bigger real estate opportunity as well linked to this food system.
All right time are fascinating stuff on the global food supply chain but before we let you go I'd love to just get your sense of the overall markets right now you know we saw this tremendous rally in US equities especially that growth and and tech side interest rates are high.
What's the opportunity set look like to you from sort of a macro level are you are you risk on still after that first half are you a little more cautious how are you thinking about the the opportunity set in the market right now.
Over the short term we are definitely thinking the next six months is more risk off than a risk on environment we feel the markets in generally particularly equity markets are probably under valuing the amount of risk to the global economy that exists between geopolitical conflict.
Between how does the fed and other central banks kind of manage this very fine line between inflation and recession risk so we and many of us investigated investors are still in risk off mode.
Having said that I think somewhere in the next 18 months and I know that's a broad period.
It will be one of the best investment opportunities in our lives as markets correct but we don't think we are there second I'd say we remain very humble we think this is a very different.
Difficult macro economic environment to navigate and we are quite scenario based in our thinking we haven't put all our bets on one scenario but you've got to look at what are the range of outcomes that can happen between a soft landing and a deeper recession.
And we planned up portfolio to kind of manage across multiples of those those different settings at this point and third we think that returns and rates don't come down as quickly as markets assume once central bank set the rate at a certain level they wait.
Therefore they see before they move again and markets have sort of assumed that we are at the top of the hill and we immediately marching down again and I think in reality we'll stay at a steady state where it's 25 or 50 basis points from where we are now who knows but we're going to stay at that level for a little longer and the signals for a recession will have to be deeper than they are now before central banks act and markets and investors are under investing against that idea.
Well that's timer hi it he's the chief operating officer at P Jim such a pleasure to hear all your thoughts he talks about more than food it turns out yeah we're going on I like this.
No I love the food topic as we do in farming it's a well done and I are both secretly wish to run a farm yeah farmers to be one day in New Jersey but can't let you go just yet timer we do have a tradition here the craziest things we saw.
Markets this week you see anything crazy markets recently.
My my crazy story is maybe not about markets now but it's about what markets don't look at but ultimately will ensured and we had a colleague who just took a flight from Singapore to London on British Airways.
This was in the in the headlines in the British newspapers hit massive turbulence fight people on the plane were injured.
And the University of Reading in England has done research that between 1970 and 22 2022 there's been a 55% increase in severe turbulence on Atlantic flights.
And it's because the jet streams because of climate change are 15% more share happens in the wind patterns.
Well and that a raises the cost of plane maintenance it actually means in the future because they expect a three to six times fold increase over the next 30 years in the amount of turbulence that pilots will have to take new routes that might be more expensive.
And to me just a classic example of the fact that much as I love markets and much as markets capture many things there are externalities things one step ahead of markets such as these weird non-linear
tail risks that happen from climate change that ultimately will come into market pricing and savvy investors are ones to sort of figure out what's going to happen.
And turbulence and all its second order impacts and probably none of us will be able to have a class of champagne if we ever get into business class without bouncing up and down is one of them.
Because the Gulf Streams actually gotten stronger just more turbulent or is it shifting too right isn't it shifting across the Atlantic a little bit.
Right the temperature difference between the poles and the continents has gone down as the poles heat up and therefore the jet streams that were very focused and targeted and you knew exactly how they went have gotten more erratic.
Less predictable and you don't know wow and so you would typically plan your route to sort of minimize it and I guess now you can't do that.
Now you can't this is known as a clean at turbulence where you don't expect it when hits it always happens but it's becoming much worse as a problem.
Wow so scared of this.
It is scary that is for your right now something to get ahead of as an investor when you think about this stuff.
All right mine has to do with pricing in the influencer economy so story courtesy of the New York Post have you ever heard of someone named
Olivia Dunn.
Never.
No.
Me neither.
Timer never heard of her.
She is an influencer.
She is a gymnast at LSU Louisiana State University.
If you follow college athletics there's this thing called the NIL now.
The valuation on hers is the second highest among all college athletes.
Second only to LeBron Jameson.
So here's where it gets interesting.
She was on this story near post wrote up about a podcast appearance she did the full send podcast.
She revealed the highest price she's ever received the highest payday for a single post.
Now mind you she has on Instagram 4.2 million followers on Instagram and 7.6 on TikTok.
They didn't say which one it was on maybe it was on both I don't know but the highest fee she's ever received.
For a single post from a college student who just happens to be on the LSU gymnast 16.
$196,000.
$196,000?
That's your guess?
Yeah.
Timer what do you think?
Highest price for a single post from a gymnast influencer.
$330,000.
Closer.
500 grand.
Wow.
500 grand for a single post.
We should become influencers.
Yeah.
I don't know.
I can't influence anyone.
Influencers.
Fake influencer.
I post my food pictures on Instagram and I have 69 followers.
I'm very jealous of my followers.
What's the highest you've ever received?
27 likes.
That's a good ratio out of 67 followers.
So you're a foodie.
What cook at home yourself here?
I cook at home.
We spend half the time in the Hudson Valley.
I have a grill there and then in a tiny city apartment,
kind of less grilling because of gondar rules.
Right.
But I cook a bunch.
What's your best dish?
My best dish is probably a braised leg of lamb with tomatoes and onions and shallots
and all that.
I'll go into my nose.
I'm swooning.
It melts in your mouth.
It's spoonable.
It's very, very good.
If they ever make lab-grown lamb, you've got to try it.
It's guilty as I feel for eating them.
It's so good.
Wow.
I need to go out immediately and eat something right now.
This was a very hunger-inducing episode of What Here's Up.
But timer, hi.
Chief Operating Officer of PJM.
Really a pleasure to catch up with you and hear about this report that you guys have out on food for thought, I believe it's called.
It's the name of it, aptly named about the global supply chain and food, how it's changing and what the opportunities are.
Really fascinating stuff.
Thank you for your time.
The pleasure to be here.
Great, great conversation.
Thank you.
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