I have a local fellow who started reading the Remnant series and he is very excited about the idea of the story possibly investing heavily in renewable energy.
"Joe, it is perfect for tiny Eaton Rapids. It solves all of their problems." he said.
He seemed unable to hear that (in the story) Eaton Rapids has an energy crisis RIGHT NOW and a solution that takes six months from "Hey, I have an idea" to plugging into the grid won't work because it has too long of a time horizon.
In normal times, most ventures with long time horizons can be exited because there is a market for those ventures and they have some degree of liquidity. Even then, some ventures like planting a property to Black Walnut trees or other high-value timber are not very liquid beyond the underlying value of the property.
When inflation rates and credit rates are high liquidity goes in the septic tank. The economists have a concept called "time value of money". A dollar today is worth more than a dollar next Tuesday. A paper dollar that might buy 3 ounces of hamburger today might only be able to buy 2 ounces next Tuesday.
Related to time horizons
There may be some investments with short time horizons...potatoes that mature in sixty days, for instance...but they are clocked by the weather. You cannot throw those seed potatoes into the ground at any time of the year and expect a harvest in sixty days.
One thing that is attractive about figs, even though they are a near-disaster due to a mis-match to Michigan climate, is that they come into bearing much sooner than traditional tree crops, they can have a very long harvest window from when they start ripening until frost shuts them down, the fruit dries easily and the fruit is large enough that it picks quickly...at least more quickly than raspberries or possibly strawberries.
Scalability
There are some businesses or enterprises that don't scale well. Often these are enterprises that are fueled by waste or unused materials from other enterprises. Sometimes the hard-stop is biological in nature. For example, a low stocking rate of sheep in the East is easy but a high stocking rate becomes an epic battle with internal parasites.
Grazing animals in general have some limitations to scaling. If you are concerned with putting food-on-the-table, a couple of beef animals have a lot of advantages as long as you have enough pasture to feed them.
Cattle need little more than good perimeter fence, salt, water and 4% of body-weight of forage (on a dry weight basis) a day. If you expand the weight of cattle on your property too much then you have to start purchasing in feed.
Another advantage of cattle is that there is always a market for them. Furthermore, if things get really tough you can slaughter one of your own beef animals even if it is not at the optimum slaughter weight. The beef will taste just fine since Optimum Slaughter Weight is determined by the size of the cuts matching the foam-plastic trays and "marbling".
Summary
There are many enterprises available to people who own a bit of property.
It is worthwhile to evaluate them in terms of Time Horizon, Potential Harvest Time Windows and Scalability. The same enterprise can be a roaring success or flaming disaster depending on the scale and when it is embarked upon.
The boutique industry of growing 'micro greens' in vertical gardens under grow lights inside of buildings (not purpose built) seem to have solved many of the aforementioned. Yield is typically a 28 day harvest. Local restaurants are the customer base and will pay a premium for 'farm to table' produce. A 2nd tier of customer is subscription-based to private residences; a local families sign up to receive a basket of assorted veggies per week for say, $25 to $40.
ReplyDeleteThe attraction is most any building can be utilized, infrastructure already in place; start-up cost is minimal for this type of growing operation; urban location is feasible and desirable which reduces transportation cost.
However, while not labor intensive, it is very thirsty for electrical power. And at least one key staff must be knowledgeable on botany to manage water Ph, nutrients, etc. While not a hydroponics, per se, it does require addition of nutrients to the water. What those costs are depends upon type of vegetable and the desired ecology.
Such an operation exploits the fact that consumers have an almost fanatical want for trying new and unusual foods, therefore a premium pricing can be used.
I think the Niagara region of Ontario is heavily invested in this. They co-generate with natural gas, electricity to the lighting and waste-heat to heat the buildings in the winter.
DeleteGeographically, they are well situated to ship from Boston to Myrtle Beach and west to Chicago.
One of the 'other' problems is costing/investments and cash flow for 6-12 months until income is stabilized
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