Snake Oil Sunset
Watching Bubbles Burst in America's Heartland
No Vacancy signs dotted America’s heartland last night.
This will be the first time owning an AirBnB in Wapakoneta, Ohio, will be profitable.
No, Big Head Todd and the Monsters aren’t in town. Today marks the last total solar eclipse until 2044.
Unreal.
Some people consider a total eclipse a big deal. I’m not really into that type of stuff after a disappointing blood moon experience in 2011 when I hitched a ride with a guy toting twenty-six pounds of dope cross-country in a black Dodge Caravan with tinted windows.
Story for another day.
You’re probably wondering the same thing as I am. Who tints the windows on a Caravan?
Blowing Bubbles
How many of you remember Pets.com?
Many expected Pets.com to be the Amazon of pet food. In its February 2000 market debut, the company raised $82.5 million. Less than ten months later, the bursting dot-com bubble bankrupted and gobbled it up.
When the Internet gained popularity in the late 1990s, everybody and their brother invested in technology companies. Many said the Internet would change the world, so investors piled their money into anything associated with a dot com.
For a while, many got wealthy by speculating on internet companies. However, when enough people realized that many companies could not reach profitability, the music stopped, and the money dried up.
The bubble burst and, in its wake, left most tech companies for dead, except for a few that provided real value to consumers: Amazon, eBay, and Priceline.
Only the strongest survived.
I look around agriculture and see similarities in the plant health and biological markets.
Biologicals, biostimulants, N-fixers, enzymes, marine extracts, and humic acids—a boatload of products that claim to do anything from reducing plant stress to promoting plant and soil health to improving yield.
In recent years, as fertilizer and commodity prices increased, many products labeled as biologicals or biostimulants entered the market, fighting for farmers’ attention.
And a lot of it is garbage.
Sure, there are a few solid performers out there. The problem is, for every product that performs, there are a hundred or more snake oils and jugs full of empty promises.
Like the late 90s dot-com bubble, we’re floating through a plant health and biological bubble. It seems like almost every ag company is promoting this stuff. At the International Crop Expo in February, I couldn’t walk four feet without tripping over a biological stand.
I think back to the tech bubble in the late 90s and all the companies that were around promising significant results and world-changing ideas, and then, poof, many of them were gone. Pets.com traded at ridiculous valuations for years until investors realized the business model was trash.
Like every bubble before it—the dot-com bubble, the early 2000s housing bubble, the 1630s Dutch tulip bubble, and the South Sea bubble of 1720—this biological bubble will also blow, probably sooner than we think, now that the farm economy has hit the skids.
Every speculative bubble comes to an end. What matters is who stands when the dust settles. The companies (or, in this case, plant health products) that will stick around are those that work and provide real value and a return on investment.
Below is a chart showing the innovation adoption lifecycle. On the far left side, biologicals are still in the early stages, which suggests that we still have a long way to go and room to grow.
But growth doesn’t follow a straight line.
Enter the Gartner Hype Cycle. When a new technology or product is introduced, it experiences a period of hype, during which everybody looking to line their pockets floods the industry, whether or not their thing has any credibility.
We can overlay the two charts to better understand how the hype and product innovation cycles work together.
Plant health and biological products likely hit the peak of inflated expectations in 2023 and are heading toward the trough of disillusionment now that commodity prices have plummeted.
I’d be willing to wager that many companies promoting biologicals and plant health won’t be at that same trade show next February, probably even less so in 2026. I realize this is a bold call for an industry projected to grow as much as 20% annually from now until 2030, but we’ve seen this movie before.
The herd will thin.
As finance wizard Robert J. Schiller has said, there’s always a bubble somewhere. We’ve seen it with the internet, cryptocurrency, and housing; now, we’re seeing it in plant health and biologicals.
If there are products that boost yields and put a little more change in our pockets, we don’t want to be left behind. But at the same time, none of us want to get burned by some snake charmer peddling molasses potions.
So, how do we know what’s worth using?
How do we separate the wheat from the chaff regarding products in the plant nutrition technology space?
By trying them ourselves.
Start small and keep your risk low. Choose one or two to observe their performance. Test different products on a small area of dirt.
Find products that stand behind their product with a money-back guarantee, and use yield monitoring technology in your harvesters to determine whether it’s worth using more next year or moving on.
Try some stuff. Keep things fresh.
Not only does it keep us up to speed on the latest agriculture technologies, but it will also make farming more interesting each year and prevent us from falling into the trap of doing things the way we’ve always done them.
The Paid Button
You may have noticed a change here at the FFT last week. The option to opt in for a paid subscription to these pages has been added.
Here’s the deal. Since starting this project last July, a few readers have reached out to share their love for the pamphlet and ask how they can contribute to the cause, so I flipped on Substack’s paid option to allow them to do so.
I will never put any of my written content behind a paywall, and I do not expect any of you to pay for it. However, for those who wish to contribute and support my work, there is an easier and more efficient way of doing so than sending a stack of two-dollar bills in a manilla envelope via Pony Express.
The only thing that will change is that paid subscribers will have access to a direct hotline with me through Substack’s chat, where you can ask me anything, from my short-lived farting career on TikTok (where I acquired more fame than I expected or wanted) to why I don’t shave my head already instead of clinging to such a thin crop that would probably qualify for federal crop insurance.
Thank you all for reading and for your continued support. If you enjoyed this, please consider sharing it with friends and family.
Have a good week, and take care of yourselves. It’s a jungle out there.
Thanks for your thoughts this Monday morning. I enjoyed your pondering over the biologicals. Having been an organic farmer for nearly fifty years, I’ve been watching a young farmer south across the road applying a substance to help his cornstalks breakdown faster. I smile as he tells me about bacteria helping do his farming better - educating me on benefits I’ve known for years.