Podcast Episode 50

Why Bill Gates and Other Investors are Buying Farmland in ND

With Guest:
  • Levi Otis of Ellingson Companies , Director of Government Affairs

Jamie sits down with Levi Otis of Ellingson Companies to discuss something that’s caused quite a stir in North Dakota– Bill Gates recently purchased roughly 2,000 acres of farmland. Jamie and Levi discuss why wealthy investors are buying land in ND, how these purchases affect the water management industry, and the number one reason why people aren’t managing water on their farms.

Episode 50 | 28 min

Guest Bio

Levi Otis joins us again on The Water Table podcast to share his perspective and expertise on what’s happening with politics in agriculture. 

Levi is a strong advocate for water management practices and works with local, state, and federal governments to ensure fair business practices. He helps contractors in the industry understand regulations and processes that affect tiling in the Midwest. 

Jamie Duininck (00:02):
This is The Water Table.

Kent Rodelius (00:05):
A chance to hear the agricultural side of these issues.

Jamie Duininck (00:09):
Place for people to go find information and education.

Matt Helmers: (00:13):
Water management is just going to become even more critical into the future.

Jamie Duininck (00:17):
How misunderstood what we do is.

Kent Rodelius (00:22):
I would encourage people to open their minds and listen to this dialogue.

Jamie Duininck (00:31):
Well, welcome back to The Water Table Podcast. Today, I wanted to talk a little bit with Levi Otis, Ellingson companies. Levi’s a guy that kind of knows what’s going on in the world of politics and kind of local politics too, up in North Dakota. There’s some interesting developments over the last month and thought it’d be a fun podcast episode to talk about. So welcome, Levi.

Levi Otis (00:55):
Hey Jamie. Thanks for having me, hope you had a good 4th of July and enjoyed the nice warm weather.

Jamie Duininck (01:03):
Oh yeah, it was, it was wonderful. He’s just givin’ me a little crap since I was flat on my back with COVID most of the holiday weekend, but Levi, I wanted to visit with you about some of the developments. The last, I’d say 30 days or so in North Dakota, some pretty prominent farm family, the Campbell family sold some land, a pretty big chunk of land. I think it was a couple thousand acres, 2,500 acres of land. And in and of itself, that’s okay. A farm family sold some land, big deal, but then it came out that a group connected to Bill Gates was the new buyers of the land or the new owners of the land. And it created quite a stir in North Dakota. And that’s just interesting to me probably is the right word is, we all know Bill Gates has been buying a lot of land the last 5, 6, 7 years and continues to do so. I don’t think any of us know why, if it’s investment, what it is, but in North Dakota, they sure seem to think they know why, and it’s created quite a stir. So let’s talk about a little bit.

Levi Otis (02:15):
It came out in a week that Tri-Campbell Farm sold 19 or 2100 acres of really nice, good farmland in Northern end of the Red River Valley to Bill Gates. And I think the reason the writer from Ag Week, I believe, is who broke it, was interested is why do you have a prominent farm family selling that big of a chunk of land? And who are they selling it to? And if you know anything about Tri-Campbell Farms, they’re not just farmers, they’re bankers and they’re real estate folks. And I think it just sent up some red flags, what’s going on? And the reporter I think was Michael Paytes actually who dug into it and started following the line of well, who is Red River Trust and how much land do they have? And traced that back to either Kansas or Nebraska.

 It’s probably Omaha. I don’t quite remember exactly, but then sure enough, it is Bill Gates. And as you said, Jamie, North Dakota is a small town so we kind of know everybody’s business. And Bill Gates has been buying up a lot of land. It’s interesting to me when you watch national coverage of Bill Gates or other billionaires buying land, that north Dakota’s kind of passed over because they don’t understand that anti corporate farming laws doesn’t mean rich people can’t buy land. There’s just other ways of buying it rather than writing a cheque for Microsoft. And you probably know just as well as I, and a lot of other people, how you divvy up your wealth. And so you put it in trusts or triple LPs. In North Dakota, we have anti corporate farming laws. So you can’t go write a cheque from Ellingson or a [inaudible 00:04:13] and just buy land. So that definitely started a whirlwind of excitement through the state. And so now, today we sit here and talk about it and why do you sell land and why do you buy it?

Jamie Duininck (04:28):
Sure, sure. And just for our listeners too, the land we’re talking about, the subject property is likely, if I said in the Northern Red River Valley, it’d be about as northwest of Grand Forks, North Dakota, 40 or 50 miles up where the Campbells… A lot of potato ground up there, a lot of potato farming, some very good ground and some very successful farming operations in that area. A conspiracy theory has never left alone in the state of North Dakota. They love conspiracies up there. And I find that… Always I laugh about, I find it interesting because, you have Minnesota, North Dakota, South Dakota, all three, very different states, even politically. North Dakota and South Dakota are both much more conservative than, than Minnesota, but they are quite different from each other, even politically. And some of that comes, I think, with just that need for there to be a conspiracy theory in the state of North Dakota. And I think that’s part of what’s driving this whole conversation about Bill Gates buying land and all of the people having their own opinion on why. So talk a little bit about that and your experience with some of that in your state.

Levi Otis (05:51):
We’ve got a lot of stuff going on the last couple years and whether you like vaccines or don’t, Bill Gates has definitely stuck his nose right into the middle of the coronavirus and the COVID vaccine. And he’s never shied away from making comments about world population and carbon sequestration and manufactured meat, if that’s the correct way to put it. So when you’re farming down the street from somebody and all of a sudden they sell their land to somebody like Bill Gates, I try not to buy into the conspiracy theories too much, but I can definitely see why people get excited.

Jamie Duininck (06:34):

Levi Otis (06:36):
Let’s say potato ground’s worth 8,000 bucks an acre, now somebody comes and buys it for 6,100 might tick you off, because you’re willing to spend it. And then what are they going to do with that property? Are they just going to continue to rent it out like other wealthy investors or are they going to try to put up some sort of a facility or what happens to the donations? To the local school or the church. And so people just easily get frustrated. And I think when you see somebody on TV every day, pushing vaccines and pushing these different things to a group of people that certainly don’t want them, that’s how those things grow.

Jamie Duininck (07:19):
The other thing that I was wondering about when it comes with Bill Gates, by and land and North Dakota, back in the eighties, when there was a farm crisis, they had a lot of foreclosures and force foreclosures by the federal government at the time in which there was a class action lawsuit, the state of North Dakota and the farmers won in that lawsuit and were able to prove that the government was wrongfully foreclosing on them. And I just bring that up because that is a culture and a mentality of North Dakota is really keep… We might say that is throughout the entire Midwest, but in North Dakota, it really is. They want to protect the family farm. They want to protect small business, small farming operations, and allow them to survive and thrive if possible. And so I think when people see this kind of thing happening with a billionaire, they don’t know. They right away go to the worst possible case scenario rather than the guy’s got billions and billions of dollars and maybe he’s just investing in farmland is one of the places where he wants to park some money.

Levi Otis (08:36):
No, you’re absolutely right. So I don’t fault Campbells at all for making their decision to sell their land. If you know anything about Tri-Campbell Farms, once again, they’re a very successful family. They are community oriented. They do have a brother that’s in politics that tries to do the right thing. And I have no idea their reasoning other than when I look at them from the outside, they’re all 60, late fifties, early sixties, and they’ve got three sons or nephews that are farming. And if you sell it all at one chunk and you could possibly get a rental agreement or a lease agreement for X amount of years, then you can do it. And so I don’t really want to get into their business of why. I know that’s been asked of me a lot is why would they do something like that?

 Or why would they sell it? But at 60 years old, you got decisions to make. And another thing that we’ve talked about on this podcast before is US Fish and Wildlife or NRCS, and what our farmers deal with in North Dakota versus the rest of the country. Let’s not forget, farmers were being paid to tile wetlands at the same time, the federal government was up here putting them into easements. And so there is a little bit of a conspiracy. I tell people all the time, if we had social media back in the fifties, there wouldn’t be a US Fish and Wildlife easement signed up in North Dakota. But as we were down trying to build up the eye states in the corn ground and draining wetlands because of malaria at the end of the depression, I think that we’re not that far removed. And so when you see more of this coming in, and we do have some archaic corporate farming laws in North Dakota that were ideally to keep the bad actors out, but I think now we’re seeing it inhibit or prohibit other families getting together so they can keep their farms or hold off some of these outside interests.

 I guess it’s just kind of interesting to me that it’s all coming full circle. As you brought up the eighties, it’s like holy cow, it seems like we’re facing it once again.

Jamie Duininck (11:00):
Right. Well, my hope is that I don’t… I haven’t talked to the Campbells. I don’t know what they’re up to either, but my hope is they’re taking all that cash and reinvesting it in proper water management because I know they’ve done a lot of it on their farms already. They believe in it. And it’s, what’s helped them be successful, you’re in and you’re out on their farming operation. So maybe a little bit sarcastic, but I’m hoping that’s what they do with their new found wealth from selling land there.

Levi Otis (11:36):
Well, if they don’t, the new landlord will. We know how much he’s putting piping the ground across the valley. This is not the first chunk of ground he’s bought. This is not the first chunk of ground that is bought by somebody from Seattle. If you go and look across land ownership in North Dakota and you really start digging into some, I personally, I dig into land ownership of people that don’t tile with us, because I’m arrogant enough to get mad. That’s somebody didn’t hire Alex into tile. And I look those things up and I look into trusts and you know, Bellevue, Washington, Redmond, Washington, Palo Alto, these trusts that… He’s not the first and he is not the last. Land here is not very expensive compared to where it is in other places in the country. And if you can buy it at a decent price that you are happy with, that’s the value of it.

 And then you can go and put in water management and you increase your value instantly. And then over the years, as you know, you build up stronger soil, I don’t think it’s a bad investment. So sometimes I think we get a little carried away on the conspiracies and we got to look at the full gamut of what we’re facing in the future. And guess what? Land’s never been a bad investment. I think USDA thinks we lose 2000 acres a day of farmland. So they’re not making any more. And in fact, we’re making less. So we’re going to have to… The smart guys are buying land and they’re making it better.

Jamie Duininck (13:12):
Yeah. And I think that where I want to jump off with that comment is around these uber wealthy investors from all over the country buying land. And one of the first things they’re almost all of them are doing is improving that land by water management. And I think the reason why we’re not seeing… And we are seeing a lot of farmers and a lot of retired farmers that are now landlords. I’m not saying that we are seeing a lot of them do drainage too. And we’ve seen a lot of them manage their water on their farm. But the reason why we’re not seeing the other farmers do it is because our politicians are not on board with this the way they need to be on board with it. They say they agree with it.

 But every time mother nature sneezes the farmers get another check from the government around that. And I’m not being critical of anybody in that. What I’m saying is that there is a way to solve this issue and we’ve seen it over and over in the Red River Valley being probably the best example of that is 2019. We have a snowstorm on October 1st. And I think there was three to five feet of snow in the Red River Valley. And there wasn’t any sugar beets that came out of the ground, if they weren’t previously tiled those acres. If they were tiled, they got those beets out of the ground. They got them harvested, but everybody got paid. And so what’s the incentive to do that, to manage that water, if you’re going to get paid anyway? If you have a lot of money or just an investor, you’re not getting paid, so you’re going to want to do that.

 And I think it’s a stark reality of what’s going on. And I think it’s a job that I have, that you have, and that our colleagues in this industry have, is we have to be more vocal with our politicians about this because it’s the right thing to do. Our government and our taxpayers don’t need to pay every time there’s a problem when there’s another solution. And I go so far as to say that the taxpayers should pay, but they should pay to help those farmers manage the water on their land. So they don’t have to pay them every time that there’s a mother nature event, let’s pay for it once, get done with it.

Levi Otis (15:34):
Well, you’re absolutely right. Ask anybody who lived through the depression, the few that are left. They say Americans are fat. And until they’re hungry, they don’t know. And I mean, Under Secretary Robert Bonnie, was in Fargo last week and he said everything except for the word drain tile. We need to produce more. The population’s crazy. We don’t know what’s going on in Ukraine and Russia. So we’re losing 20% of world food production and fuel, and we need to produce more and we need stronger soil health. And I just wanted to raise my hand and say, drain tile, just say the word. We’ve got so many millions of acres that we can tile, and we’re not talking about wetlands, we’re not talking about ground that doesn’t need improvement, strictly tile the low hanging fruit. Let’s just have that conversation first. And we’re going to have to go to DC and have that conversation.

Jamie Duininck (16:34):
Yep. For sure. And what do you think? What’s your take? You’re out in the field a lot and you’re talking to farmers and landlords and landowners every day and like I said, there’s a lot of people that are doing this. They’re catching the vision and they’re saying, I’m going to improve my ground once, I’m going to improve it now. And it’s going to pay me dividends for generations, but then there are the others that aren’t and what’s holding those people back? Do you think from… What’s probably the number one reason why those that aren’t managing the water on their farm are deciding not to do it?

Levi Otis (17:15):
Ease of the insurance. And it should be to gain capital as it is to do the work for the insurance. I can’t tell you how many of my friends are like, “How the heck am I going to afford 150 grand? I’ve got this loan, I’ve got this blah, blah, blah.” We’re all a bit biased because we know it works. If I could tell anybody my age, I would tile all my ground first. Some of our wealthiest customers have all this equipment, but all their ground is tiles. And so I think if the access to capital was easy and they weren’t afraid of the Water Board, or they weren’t afraid of the state, or they weren’t afraid of the EPA, some of that, that would definitely help. But now it’s just like, well how about we just keep giving you insurance and making it easier to get insurance and maybe it’ll tile less. So it’s government. Government is our problem. It’s the same government that tells us we can’t smoke, but then gives a hundred million dollars to the tobacco industry, come on. That’s kind of where it’s at.

Jamie Duininck (18:33):
So what’s also out there on your radar is kind of watching what’s happening politically for our industry. Just kind of speaking for our industry. And you’re an advocate for not only the company you work for, Ellingson, but for this industry and their competitors, when it comes to ease of doing business and how we get more things in front of us that are good for our industry, what’s on your radar right now? What’s happening?

Levi Otis (19:04):
Yeah. So we’ve had some issues in northwestern, Minnesota. They’ve seem to break away from the traditional Minnesota feelings of tiles. Good. And we can grow more with less and not fully understanding what drain tile does or how lift stations work or control structures like Agri Drain provides. So you know as well as I do, biblical rains, pumps running, you’re kind of peeing into a river. Some of those folks think we’re causing the Red to flood. So we’re just going to have to do what we did here in North Dakota a couple years ago and go on tour and really try to educate some of those decision makers on waterboards or watersheds.

With all the stuff we’ve talked about today. Just needing food. I know the hunger people are really ramping up the need to make sure we have enough food to feed everybody across the globe. So that has eased some of the regulation I want to say on and agriculture. I just feel like the foot has come off the pedal a little bit because of the price of food at the store and the price of gas at the pump, which is, I guess, good for us to be able to continue what we do instead of feeling like we’re fighting our own battle.

One thing with Bill Gates and other billionaires that own major companies that have carbon goals or carbon sequestration programs. If you want to talk about a conspiracy theory, that might be one. If you own 250,000 acres or 400,000, I think is a Bezos rumor, it’d be very easy to flip the switch and say, we’re going, no-till on all my farms, because all you got to do is pay more for rent and you’ll get a no-till farmer. That’s not rocket science and now you’ll have built in credits.

Jamie Duininck (21:22):
You’re talking about carbon credits when you say built in credits?

Levi Otis (21:27):
Yep. Carbon credits. And all these companies going in that direction. And they’re going in that direction because the consumer is forcing it. The consumer at Walmart will pay a dollar more to pick up a box that says this is sustainably grown or carbon neutral or whatever the tagline is. And some of it is… It’s snake oil. Well, if you’re in control of the land and how it’s growing and you became a hundred billionaire for a reason, you’re going to be really quick to figure out how to make that work in your facility, whether it’s Amazon, whether it’s Microsoft, whether it’s Walmart. So those are going to be interesting things to watch in the next couple years. Because I don’t think they’re going to wait around for agriculture in general to get on board. I think they’re just going to do it. And the people growing the food are going to say, “What did they do?”

Jamie Duininck (22:20):
Yeah. And here’s what I’d say about that is I don’t know. I don’t know enough about carbon sequestration and how big of a problem it is. I’m not going to try to speak to that. But what I will say is there is an opportunity, because of how you just explained, that companies want to be able to prove that they are doing the right thing when it comes to carbon. And so if there’s opportunities to not disc your field or to no-till, to plant cover crops and you can get paid for that as a producer, you got to think about that, because there’s going to be a lot of that coming. And at what point is going to be your best advantage? Is that right now as it’s an emerging market or is that after it gets developed a little bit?

 I don’t know. I’m sure a bunch of our producers know way more than I do about that, but there is going to be an opportunity and it’s going to be somewhere between opportunity and a really big opportunity. I’m not sure. And I think that has to develop out. I don’t know if anybody really knows that yet, but you’re seeing, almost more than once a month now, new people entering this market, whether it was Land O’Lakes who did it, quite a while ago to, just recently now Hormel has announced they are in the carbon credit market with Target and so they we’re just going to see more and more of it, which is going to be more and more opportunities for farmers to pick and choose kind of who they want to join up with.

Levi Otis (23:59):
That’s absolutely right. And that’s why I truly believe part of this play and rich people have always bought land since the beginning of time. So that’s not really surprising, but they are going put themselves in a position to capitalize on their own credits that they need for companies that they’re chairing and to make those credits or to receive those credits, however they play out. Academia’s a really interesting place to have these conversations, because you could put four PhDs in a room and four of them are going to have different views on how it’s scored, how you score the carbon sequestration. And all I know is you can’t do any of it without soil health, great soil health. So tile your ground. Start there.

Jamie Duininck (24:52):
Yeah. And we’re going to continue to talk about stuff like that on The Water Table and about a big carbon producer is concrete. The manufacturing of concrete is 7% of the whole world’s carbon emissions. So you look at that, what we do in our industry with plastic pipe and with producing plastic pipe out of recycled material is just a huge savings to the environment and to carbon. And we’re seeing, there’s going to always be products that need to be made out of virgin plastics. So when those, when those virgin plastics met their useful life and they get ground up and reused, there isn’t a better place for that product to go than into pipe, which goes into a field drainage application for farmers which grows corn and soybeans, which feeds the world.

So it’s the best story you can get. There’s other stories that are ranked at the same level, but it doesn’t get better than that from the standpoint of what we can do to save our environment, whether you want to do that or not, why wouldn’t you? Because you can do this with the highest quality product. You can make just as good of a product and in some cases you can even control it better. And we’re going to talk more about that on The Water Table, we have in the past. And we’ll continue to pound that story. So thanks for joining us today, Levi, I’m going to get you back again. It’s fun to have you on because I know you can connect the dots for a lot of our listeners, so appreciate it.

Levi Otis (26:32):
Yeah. Thanks for having me. And and we’ll just keep plugging away. And if anybody wants to reach out it’s lotis@ellingsoncompanies.com. You can email me and tell me I’m nuts or I’m way off the mark. But the dialogue is something we haven’t had in this industry for a long time. And it seems like the last 10, 15 years or so really picked up and Water Table Podcast is a great spot. And Twitter is a great spot to keep sharing the messages. So if we can be of any help to anybody else, give us a call and we’ll be there.

Jamie Duininck (27:10):
Yeah, real quick before we go, you’re going to be at some stuff here later this summer, the Midwest Council on Agriculture is having a meeting in Detroit Lakes in I think August ’22. And then you’re going to be down at Farm Progress Show, I think, is that in Boone, Iowa this year? And then after that there’s, I think, right around the 1st of September is the International Drainage Symposium, which you’ll be representing the industry. So-

Levi Otis (27:41):
Thanks. You just erased my summer. Appreciate that.

Jamie Duininck (27:43):
Yep. Well, you haven’t done anything the first half this summer, so you can work hard the second half. So anyway, thanks for your time, Levi. Appreciate it. Have a good day.

Levi Otis (27:54):
Yep. We’ll talk to you soon.

Jamie Duininck (28:02):
Thanks for joining us today on The Water Table, you can find us@watertable.ag. Find us on Facebook. You can find us on Twitter and you can also find the podcast on any of your favorite podcast platforms.