Name: Land Acquisition LLC

Econ 331 Section 1

Business Concept #5

Ryan Hrubes

Name: Land Acquisition LLC

Description of Service:

Land Acquisition will be the large farmer’s avenue to more land, rented or bought. When these large farms are already in upwards of ten thousand acres, they do not have time to sign lease documents, look for new land owners, discuss how the land will be farmed, etc. Land Acquisition LLC will take all tasks including the sourcing of the ground, signing of all written agreements, as well as communication with landlords.

Reason for Customers’ Needs

The change that we will experience will be the emergence of new supply competitors from the countries of Brazil and Ukraine. Currently Brazil is on the verge of passing the United States as the leader of soybean production. Brazil continues to open up more and more new land for agricultural use. At the very beginning the soil fertility in Brazil is low, but after a few years of heavy fertilization they are achieving the same or better yields than the United States. Along with this emergence of more land, they are still in an undeveloped area of the country and labor and land are cheaper than the U.S. Ukraine is behind Brazil in productivity breakthrough of about five to six years. However, they do not have to wait to build up fertility of their soils. Similar to when we started breaking soil in the Midwest, theirs is full of nutrients and is said to be some of the best soil in the world. The problem there was that it was under Soviet control and was never managed to the best of its ability. As soon as both of these countries get on track, they will be able to produce more for less, and will put the United States at a disadvantage, unless we change our ways of producing food, fiber, and fuel.

This becomes the challenge of the United States’ way of farming. In either Brazil or Ukraine, you don’t find anyone farming 500 acres, 1,000 acres, or even 4,000 acres. Almost everyone is farming more than 5,000 acres at a time. In this lie the benefits of economies of scale. Brazil and Ukraine are beating us in a game of economies of scales, let alone cheap labor and land due to undeveloped economies. What the United States is going to have to do is build their efficiencies of scale in order to compete in this global market place. With everyone paying the same for inputs, and receiving the same for outputs, it is going to be difficult to compete in the future

I think farms will be getting larger and larger quicker than most people think. With the rising fertilizer cost and sinking grain prices, larger farmers will have the advantage because of economies of scale. This is where the opportunity arises for entrepreneurs in the agriculture industry. As these farms get larger, in upwards of 10-15 thousand acres, they will be looking for ways to take things off their plate and cut costs.

Service Creates Value

The customer gains from not having to worry about retaining current ground and leasing new ground. They will have an “expert” with them in finding ground, as well as the creation of legal binding contracts. The lawyer for the company will be a necessary addition, for it gives a lot of value to the customer. The customer will also not have to spend any time on the road or phone looking for ground, my company will take care of that as well.

Land Acquisition vs. Competitors

There is not a service exactly like this today. Hertz and Farmers National are currently farm managers; however, they work for the land owners. I on the other hand, will be working for the large farms that are looking for two to three thousand acres a year. Realtors will also be a competitor, but there is a possibility they will become a partner, as we will have the customers looking to buy.

Possible Size of Market

Market would first be limited to the Corn/Soybean belt, however, farmers along the coasts might need the same type of service. The market would involve any farms that are larger than five thousand acres and want to increase size of operation. Farms that are not growing but are greater than fifteen thousand acres will also be a market because of their need to retain farm land. Market right out of the gate would be one large farmer in Iowa. Getting familiar with the type of work will be important, and starting to implement protocols for a larger business will be the key in our ability to grow. As soon as the company is comfortable with the correct protocol in all tasks associated with our customer, we will implement these same ideas with other farmers looking for our services. Growth will happen when we are already comfortable with the job load, and also have brought in the new employees capable to do the job in a manner that represents Land Acquisition LLC.

How will I financially support the business?

From the start, there will be two partners. At the beginning, capital costs will be low considering we can work in an apartment with the existing tools we have. However, as business grows cash we will need to finance an office and office equipment. Talking with either our parents or the local banks, we will need to finance our growth.

Skills I will bring To Company

I have had many internships with various aspects of agriculture, which have given me a broad knowledge and contact list of the agriculture industry that will be a great asset. With these internships, I have also had the opportunity to talk with many large farmers, seeing what types of things they could use to benefit their operation. I have also had the opportunity during school to work in many different groups, helping develop some of the extremely important skills in leadership and communication.

Entrepreneurship Team

For my team, I am looking for people that are very personable since the company sells a service. They will also need to be team oriented, since most of the work will be relying on the other counterparts of the company to succeed. I believe this is the most important task in creating a great company. Surrounding yourself with great people will only make your own job easier.