Fun Fact Ag-Value Chain 07: The 15-Cent Dollar 🛒

Did you know that for every dollar you spend on food at the grocery store, the actual farmer usually keeps less than 15 cents?

The agriculture value chain is incredibly bloated in the middle. Between the farm gate and your dinner plate, there is a labyrinth of packers, processors, distributors, wholesalers, and retailers.

Each layer takes a margin. We have built a system where the entity taking the most physical and financial risk (the farmer facing weather and crop yield issues) captures the least amount of pricing power.

The remaining 85 cents goes entirely to the "middle."

The Opportunity Lens: Bloated margins in the middle of a supply chain are a classic target for disruption.

As investors, we should look for digital marketplaces and ag-tech platforms that directly connect producers with commercial buyers. By removing the physical middlemen, these platforms expand margins for the farmer and lower costs for the buyer.

It is a classic value and efficiency play. Disintermediation is where the next wave of margin expansion will happen.