What It's Like to Do Big Ag Business in Venezuela and Ukraine

The Trump administration says it wants to kick start private investment in Venezuela now that it's captured Maduro. And Ukraine is eventually going to need a massive rebuild. But what is it like for a big multinational to actually operate in these types of places? In this episode, we speak with Jeff Kazin and Mike Rohlfsen, the cofounders of agricultural consultancy AgrisAcademy and former long-time Cargill employees. Jeff previously ran Cargill's Venezuelan business and Mike was the company's first employee in another geopolitical hotspot: Ukraine. We talk about the challenges they faced in these two locations, including dollar shortages, corruption, and security threats, and their sometimes creative solutions to them. Read more:Venezuela Leader Pressed From All Sides Over Oil Industry PlansUkraine Says It Attacked Small Oil Refinery in Southern Russia Subscribe to the Odd Lots NewsletterJoin the conversation: discord.gg/oddlotsSee omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Joe Weisenthal?

  There are some market stories where you want every detail. Tracy and I have made quite a few podcasts on that basis, but sometimes you've only got 10 minutes and need to know what's moving markets and why. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and research get you up to speed on what matters and what to watch next. About the time it takes to grab a coffee, so search Barclays Brief wherever you get your podcasts.

• 0:26Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 1:07Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 1:51Speaker 01

  Bloomberg Audio Studios. Podcasts, radio, news.

• 2:07Tracy Alloway?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

• 2:11Joe Weisenthal?

  And I'm Joe Weisenthal.

• 2:12Tracy Alloway?

  Joe, one of the big topics of discussion, there are a lot of topics of discussion nowadays, but when it comes to the recent takeover of Venezuela, the Trump administration's takeover of Venezuela, I don't know how-

• 2:24Joe Weisenthal?

  Acquisition.

• 2:25Tracy Alloway?

  Acquisition, I don't know how to describe it.

• 2:27Joe Weisenthal?

  I don't either.

• 2:28Tracy Alloway?

  But the action in Venezuela, one of the themes or things that you saw people talking about was this idea that, well, even if the goal is to get more oil, Venezuela's oil industry is a mess.

• 2:43Joe Weisenthal?

  It's in shambles, right?

• 2:44Tracy Alloway?

  Yeah, so you hear things about, you know, ships that are rusting in the dock and pumps that don't work and whatever. People talking about really creaky infrastructure and also just a bad environment for doing business.

• 2:57Joe Weisenthal?

  Yeah, I mean, this is the thing. And so in the Venezuela-specific context, we know that the oil infrastructure has been degraded for years, which is why there is all these numbers about the massive amounts of upfront investment that would be required to get the oil started. But then there is this other phenomenon that's global, which is that there's really not much of a connection per se between the existence of natural resources in the ground and some way to get them out commercially anywhere. This also happens to be the case in Greenland. It happens to be the case in Western Australia, which is a very, like, well-run country, which is that assets in the ground or anywhere mean nothing without the sort of rule of law, refining, processing, shipping, infrastructure,

• 3:39Joe Weisenthal?

  et cetera. So all these places of various different degrees, the actual existence of some asset, in Venezuela's case, oil, that's only part of the story.

• 3:49Tracy Alloway?

  Absolutely. So this got me thinking, what is it like to actually do some sort of industrial business-

• 3:56Joe Weisenthal?

  Yeah.

• 3:56Tracy Alloway?

  -in a place like Venezuela? And I always wanted to do more on the Venezuelan economy. I think it's pretty interesting and-

• 4:03Joe Weisenthal?

  Me too.

• 4:03Tracy Alloway?

  -more interesting now. So that is exactly what we're going to do today. We're also going to talk about doing business in another-

• 4:11Joe Weisenthal?

  Hotspot.

• 4:11Tracy Alloway?

  Hotspot. Hotspot is a good way of putting it, which is Ukraine.

• 4:15Joe Weisenthal?

  Right. We did a number of episodes immediately after Russia's invasion of Ukraine, talk about the effects on the grain business. But the important thing, which we didn't get into that much, although I think we did a little bit, is like, well, the grain business, the wheat export business, it still exists.

• 4:31Tracy Alloway?

  Right.

• 4:31Joe Weisenthal?

  It was impaired. But then the day to day business of running a commercial operation in that intense environment, how that changes and so forth, and so forth. How does that change under the new competitive strains? And I just want to say one more thing, which is, you know, when you talked about, well, what is the right word now to describe our relationship with Venezuela? It's, I've been thinking about a lot of this, too, because-

• 4:54Tracy Alloway?

  Do you have a word?

• 4:54Joe Weisenthal?

  No, I don't, because it's very context dependent, right? If you were to listen to the administration, he was like, oh, Maduro was arrested, right? If you believe this was a flagrant violation of international law, you'd say he was kidnapped, etc. There's almost no words to describe it. You saw the president talking about already selling Venezuelan oil. So whose oil is this already? It's just a, it's a very odd situation, to say the least.

• 5:18Tracy Alloway?

  Definitely. Okay, so speaking of odd situations, we have the perfect guests to talk about them.

• 5:24Joe Weisenthal?

  And just, I just got to say, I got a headline, US seeks immediate talks on acquiring Greenland, Trump says, so at some point, we will have another conversation about weird relationships with parts of the world that we didn't think about as much.

• 5:36Tracy Alloway?

  Yeah, the Greenland economy episode is-

• 5:39Joe Weisenthal?

  Yet to come.

• 5:40Tracy Alloway?

  Inevitably gonna arrive. Okay. So, we're gonna be speaking with Jeff Kazin. He is the co-founder of Aggris Academy, and also the other co-founder, Mike Rohlfsen. So Jeff and Mike, thank you so much for coming on All Bots. Really appreciate it.

• 5:56Joe Weisenthal?

  Thanks for having us.

• 5:57Speaker 03

  Yeah, thanks for having us.

• 5:58Tracy Alloway?

  So first of all, why don't you give us a sort of nutshell summary of your career history? Because this is why we're talking to you. Both of you had very long, interesting careers at Cargill, which is, you know, one of the massive, massive agricultural conglomerates, among other things. So talk to us about why, why we're talking to you, I guess.

• 6:20Speaker 03

  Yeah, I guess I'll start out. This is Jeff Kazin. I did a full career in Cargill, thirty years. And you know, started at the ground up, you know, at Baton Rouge, Louisiana ports buying grain to go to export. Was head of wheat trading, did a lot of wheat trading at some point. Spent some time in their mergers acquisition shop around the world, looking at various businesses. Ended up as a CEO of a joint venture between Cargill and Monsanto at the time. Switched over into the vegetable oils, particularly the refined vegetable oils. Was the head of trading for the, what we call the West, so the Western Hemisphere on the refined oil side. And that's actually where my time with Venezuela was connected. Cargill had a very large oils business there, actually a packaged oils business.

• 7:05Speaker 03

  And I finished up my career in the feed side, a lot of aquaculture, very large salmon feeders around the world. Shrimp, all kinds of various aquaculture and then really the Western side, South Latin America on the feed side, all the way to Argentina. So a typical, highly varied Cargill career.

• 7:26Speaker 04

  Similar story with me back then when Jeff and I started, you know, Cargill intentionally threw you around to many different places. So yeah, I had three different domestic roles in the, in the early to mid nineties that got your feet wet in different markets in the United States. And I also was involved on the export side out of Houston, you know, similar what Jeff did. And then about five years in, I got tapped on the shoulder to go to Ukraine. There was no real commercial presence for Cargill then.

• 7:51Speaker 03

  What year are we talking about?

• 7:52Speaker 04

  This was, this would have been April of nineteen ninety-five.

• 7:56Speaker 03

  Okay.

• 7:57Speaker 04

  Yeah, so I was, I was young, I'm single, I spoke Russian, I was perhaps tongue in cheek. You ticked all the boxes. Expendable. And you know, with a, with a blank slate that, that not really knowing what was going on at the time and probably rather difficult to find people to come there. Yeah, I, I, I had raised my hand already to go and, and fortunately they, they circled back to me and gave me that opportunity. And it was five wonderful years there, taking it basically from a, from a theoretical representative office to, I think, I think we had seven or eight business units and a couple hundred million dollars invested. So it was a wonderful experience. Over those five years, and I also was with Jeff in the merger and acquisition shop shortly

• 8:40Speaker 04

  after returning and went into corporate ventures for a while after that and left Cargill a little earlier than Jeff did and went through Agtech and Agtech oriented venture capital. Then about three years ago, we kicked this off.

• 8:53Joe Weisenthal?

  I hope you guys are cool with us turning this into a five hour conversation now because I imagine there's an incredible number of stories and I already have a billion questions. So we're going to be doing a little bit of that on the fly. Jeff, talk to us about the years you did business with Venezuela and maybe the difference in what years those were and then the sort of different conditions from like the beginning to the end as you saw them.

• 9:19Speaker 03

  Yeah, so because of the oils business, I was attached to that. And I'd like to say that it was a varied business and I ended up, and I had a lot of grain experience too. So I ended up kind of the head of overseeing trading for all of it. And probably the biggest statement is I think when I started the boulevard, the currency was like one to 800. And this is, and I get my years right. And I think, you know, three years later, it was like one to 12,000 or something like that. You ended up, we ended up in that period of super hyperinflation where the economy basically seizes up. And, you know, you watch from the capability, if you don't have a functioning

• 10:01Speaker 03

  currency and the government makes you sell in local currency, in order to go, you have to have some way to exchange it. And we effectively became dependent on the government to do the exchange to go out and buy dollarized raw materials. Right now, 80% of global trade is still in dollars and a lot of the grain trade is. And that probably is the most single telling thing. The currency ceased to function and that really changed the game on the ground in Venezuela.

• 10:33Tracy Alloway?

  I want to get into some of the currency complications in a little bit, but I was surprised that Cargill had any business at all in Venezuela. Can you just tell us what exactly Cargill was doing over there?

• 10:47Speaker 03

  Yeah, and keep in mind, I'm currently a former employee and Cargill does not own the business there anymore. I was reached out to by Cargill. Basically, this is very typical of Cargill. They'll have females, they'll go in, they go out, they'll start with females, they'll, they had the long-term salt. Salt was a big play there. Cargill is a large producer globally of salt. A lot of things quietly. I think there was a lot of industrial use salt there. They had the petrochemical business was using salt. I don't actually, I'm not an expert on the petrochemical side. And then there are lots of food processing businesses around the world. In this case, you know, they were natural flour millers, oil refineries, oil bottlers, the rice I had not seen anywhere else in the world. It

• 11:30Speaker 03

  was actually gone by the time I got there. Pasta plants. So in this case, probably the more unique thing was that not only were we doing primary processing, but we were going all the way to consumer. They actually had a very, I think the number one brand that they had bought over time. I think there was an acquisition from Bunge predates me in there also. So they were, you know, this was a very wealthy country and a place where you could do some very good business in, and then repeat that model in multiple countries all over the world. And so, yeah, that's how they got there. It was very natural flow. And they had a very large investment there.

• 12:24Tracy Alloway?

  There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets, fast. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

• 12:51Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 13:33Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 14:14Joe Weisenthal?

  Mike, on Ukraine, you know, 1995 is still the early days of real post-Soviet optimism, right? And people hadn't become jaded yet and they probably hadn't woken up to sort of all the various pathologies and stuff that would occur in the wake of the dissolution of the Soviet Union, et cetera. Talk a little bit about the calculation and the hopes for Ukraine and the degree to which, you know, over the many years that you've paid attention to this market and worked in it, how they unfolded relative to, say, expectations.

• 14:47Speaker 04

  Well, I almost would say you underestimated optimism at the time. You know, in 95, there was a tremendous amount of optimism. There, we had a very dynamic team. Quite frankly, even the older folks that we would find to help be a part of what we were doing commercially, even though they, all they had known is the system. There were folks that were experienced and hardworking and very excited to jump into the sort of things that we were doing in a very differentiated way. So we had, we had rock stars in our group that were 22 and out of school. And we had rock stars that were 60 years old that were probably had some sort of legacy

• 15:32Speaker 04

  experience in agriculture in the Soviet Union, but was able to translate that to us. And it was an absolutely fantastic experience back then. It was more than just a job. It was, you felt it was transformational. It was, you were changing the way business got done there. There was, there was an insane amount of chaos, but working in a regimented ethical way got you business by, you know, in another route. So yeah, we made it work. It was, it was classic Cargill at the time, sort of being sort of pioneering and entrepreneurial. And yeah, we made it work and started with the trading side and slowly but surely put assets on the ground and a lot of other more formal things that made it look more and

• 16:15Speaker 04

  more like a regular geography by the time, you know, the year 2000 rolled around and when I left.

• 16:21Tracy Alloway?

  So Mike, you were on the ground in Ukraine and Jeff, you were managing the Venezuela business remotely. What was that actually like? Because I imagine, you know, we're talking about a couple of decades back now. Communication must have been more difficult than it is even nowadays.

• 16:41Speaker 03

  It was very typical. I wouldn't say, you know, there was, we had leading edge AS400s back in the day. And so communications has always been a priority of a trading firm. And so there was a lot of investment in that, right? You know, that was very typical that you would have one, and remember, I'm a trading manager, not the overall business manager. But I would have, you know, we would have local merchants in each country. And you've got to connect and coordinate that. You know, think about if you're buying, say, you're buying a multi-grocery boat cargo. You're going to load that cargo in New Orleans with all kinds of different commodities. And it's gonna, you know, you're gonna leverage that out to get your freight costs down and create competitive advantage. And so you're coordinating all your different trading groups in the region.

• 17:25Speaker 03

  And then that actually goes out on a global basis. So you're constantly looking for that edge. So I play the coordination role and then at the local level, like you have to have local expertise on the ground. Particularly in the cases Venezuela started to become unstable. You need people to understand how to navigate the government. How to navigate the various, you know, channels to get things and continue to get things done. And that takes local know-how. So that was kind of that big picture role that I would be filling in, of course, the risk management side. And then you have that very local execution side to make things happen. You got to have both.

• 18:02Speaker 04

  Yeah, and the same proxy existed for us, at least in our external communication and how we linked up. So my, my usual routes of communication went through our Geneva office. And then, you know, outward throughout the, throughout the rest of Cargill. So the external communication was world-class. We had satellite phones through which we ran our modems and that kind of thing, early on at least. Internal, whole different story. I could probably waste 45 minutes explaining just simple sending a fax type story and things like that in 1995 and 1996. But before things got a little bit better, integrated. But, but yeah, it was, it was a dichotomy between internal and external, but manageable nonetheless.

• 18:43Tracy Alloway?

  One of my first journalism jobs was literally monitoring the fax machine and making sure if a fax came in that the newsroom would be aware of it. Thrilling times.

• 18:53Joe Weisenthal?

  We could easily do an hour on internal communications and the sort of like pre- email, pre Slack, pre IB. The pre IB era is very long ago, but pre, you know, pre-digital document management in general and how that must have been. And maybe we'll have you back just to talk one day about that. Jeff, I remember I had a, it's interesting enough, I forgot about this, but when my first year of college, I had a roommate who I think had done some mission work for his church in Venezuela. And he was there when he, by the time he was roommate, he was talking about, oh, this guy Hugo Chavez, it looks like he's going to win. This is going to be bad news, et cetera. And so should have taken that

• 19:35Joe Weisenthal?

  more seriously and paid more attention. What was though, the point, a lot of people were concerned about Chavez, obviously. What was the point though, in which you sort of saw like, okay, this is, this is turning down. And what was it? And what was the process by which like, oh, we're starting to get serious inflation. We're starting to have a more difficult time doing business or importing dollar-denominated machinery. When did that sort of sink in for the business?

• 20:03Speaker 03

  Yeah, so I arrived, we were already to Maduro. So we were already, so Chavez, the time there had already passed. And, you know, it's the frog in the boiling pot, right? It starts small and then it starts to, you know, and then you get all these unintended consequences. And you're trying to, and then, you know, as a socialist regime, you're trying to plug holes, right? And all these things that start to go on. And plus, you know, you also have a government that is healthily paranoid about being overthrown, right? There's a power aspect that's going on all this at the same time. I think it really, really took a plunge. I mean, it wasn't good at Chavez, but when the currency

• 20:46Speaker 03

  and, you know, as you said, the oil industry starts to deteriorate. So that spigot of dollars is drying off. It takes ever more dollars to pay off everybody in the system, right? It's a constant payoff system. And, and then you just, you don't have enough money. So you just run the printing press, right? And I can remember this, there was a point, it got, it happened so fast. A couple of stories. One is the BTU of a paper boulevard. The BTU value is worth more than it could buy.

• 21:16Joe Weisenthal?

  Whoa, so you literally burn them for fuel.

• 21:18Speaker 03

  You can burn it through fuel.

• 21:19Joe Weisenthal?

  That's crazy.

• 21:20Speaker 03

  And, and there was a time where they were, they were having the boulevards printed. Um, but they didn't pay their printing bill and they were flying it. And the printing was being done in dollars outside the country. They didn't have enough money to buy the boulevards to fly them in. So you really, you started running out of currency on the ground. Like you just, even if you wanted to work on it, there's all kinds of these kinds of stories. But it was right in that probably two years into Maduro space when, when the currency stopped functioning. That was really when we knew we were in trouble.

• 21:55Joe Weisenthal?

  Just to go back to something you said, so an American company working in any foreign country has to abide by American laws, particularly related to things like bribery and corruption. And maybe for both of you, and I imagine, you know, that this is a very prominent issue in both these countries, maybe more in Venezuela than Ukraine, et cetera. But we know that there's significant corruption in Ukraine, et cetera. Can you talk a little bit about essentially how you function in these environments where probably lots of people are getting paid off literally or in the bribery sense?

• 22:35Joe Weisenthal?

  And how you have to navigate that from the perspective of a multinational?

• 22:41Speaker 03

  I'll start.

• 22:42Joe Weisenthal?

  Sure.

• 22:42Speaker 03

  And, and going back again, within the, uh, the perspective of the mid nineties, there, there were two impediments.

• 22:51Speaker 04

  And I use the word impediment, you know, not, not that it impeded us, but it did create a headwind for, shall we say, the ease of doing business and the scale of doing business.

• 23:03Joe Weisenthal?

  Yeah.

• 23:03Speaker 04

  So, so the, the, the two parts that created impediments for us is, is there still was a fair amount of governmental influence in the grain business in 1995. And it really was from a county perspective and a state or what they referred to as oblist perspective all the way up to the central government. So there were plenty of ways to keep those people happy and quietly buy grain at scale that would also go through a state-owned railroad system and a state-owned port system. So, most of the infrastructure and there were gatekeepers at various stages that could easily be catalyzed, shall we say, to get grain out the door at very reasonable numbers and trade at, at, at, at large scale. And

• 23:48Speaker 04

  I would, I could name names, but you know, there, there's plenty of, some of the global traders that don't have to apply to, to the US rules, rules-based system. So what we basically did is did it old school. We went straight to the farms in smaller quantities in reasonable amounts with people we could trust and just gutted it out through atypical ways of, of getting the grain out of the country, which ironically is some of the infrastructure that we built on the Danube River system that it's very lumpy, it's transshipment through cranes and, and evacuation systems and things like that as opposed to a big, you know, high-scale elevator. Those are some of the things today that are getting grain out of the country because some of the main elevators have been destroyed or

• 24:32Speaker 04

  damaged in some way. So that was our biggest problem, you know, you could get around it. And quite frankly, it was more rewarding doing it that way because we saw our impact on the ag sector. But that was, that was sort of the big picture reality at, at the time when I first got there.

• 24:48Speaker 03

  I think in my case, it is comforting as operating is to know you don't have to pay those type of bribes or facilitated payments. The company had a did a very good job of instilling that. Everybody who joined trained on it yearly and quite frankly backed it up. Right. If you didn't make your numbers because you would have had to pay the bribe to get there. It didn't hurt you career wise. They knew you talk about it. You tell them, I'm not going to do this and it happened and we had these stories that happened. But it so on that side, it made it very clear for your employees to know how to operate. The other thing I want you to think about in the global food space, right? Is if you're a Nestle or Frito Lay or one of that and you're buying raw materials.

• 25:32Speaker 03

  So you have a plant in Venezuela.

• 25:34Joe Weisenthal?

  Okay.

• 25:35Speaker 03

  You want to make sure that you have food safe product. U S grade and you know, the standards, right? Food safety. You want to actually, it actually draws business to you. Right.

• 25:45Tracy Alloway?

  Right. The brand value of American food.

• 25:48Speaker 03

  Right. And that you're going to act honestly and they don't have to pay a bribe to get a truck. You know, to the plant on that day, right? The things like that, that the way you can do business. So at that time, let's call them Western companies. They're now today more modern companies. They like to go to some of these early markets together. And because they knew that they kind of supplier that, you know, if you were making malt barley for the brewery and it's a, you know, South African brewery. They knew that you were actually going to, you know, make a contract and stick to the contract. No matter what, if we had to work it out, there was crop failure, you would, you know, hold your word was your bond. And I, you know, I'm going to tip a hat off to my former employee. They were very good about how that operated.

• 26:31Speaker 03

  And I worked with them in places, basically in any, all the corners of the world. And everything from, you know, fish meal to lysine to wheat. That brand helps out in these environments because you, you know, you were the customers can count on you. And in food, super important, right? Because if you screw that up, you can kill somebody and or tarnish the customer's brand. Right. If something gets through this, that's the same way it is in the U S actually, but not with the maybe the same criticality when you're working in a remote location around the world.

• 27:07Tracy Alloway?

  So this actually leads into something I'm really curious about, which is obviously Cargill is a private company, operating at that time under a socialist regime, under Maduro. What was the relationship like just between a private commercial enterprise and a socialist government, especially for something as critical as food, right? I imagine the government cared about the food supply.

• 27:32Speaker 03

  We had to follow both sets of laws, right? You have to follow the local law too, right? So if they say you must transact in boulevards, you have to transact in boulevards. Now, we didn't have Tether or Bitcoin at this point, right? So the world's changing in an interesting way. You have to follow that. I mean, you don't want to poke the bear, right? And then you have to have people to become experts in how whatever government you're working with runs. And we do. And that's how it... But this was a very common, still is common, to operate in some of these places where, you know, places that have cocoa, right? You know, some of the African countries there, Zimbabwe, right? South Africa. You still have this situation.

• 28:17Speaker 03

  You have to become... There is a competitive advantage in becoming experts at working in difficult places.

• 28:24Tracy Alloway?

  Were you ever pressured, though, for instance, to lower grocery prices?

• 28:29Speaker 03

  Oh, absolutely, all the time, right? And there were laws on theoretically how much you could make and how the accounting was done on that. And, you know, if we had a global rice shortage, it was not the fact that we had a global rice shortage and prices rising, it was Cargill that was doing it to, you know, to the people. You had to have an scapegoat effectively. And, you know, at some point, you just know that you can't import at price X and sell it for X minus, you know, a bunch, and you'll just bleed out. And quite frankly, at some point, in several geographies, we get a situation where a corporation says, "We will put no more dollars in the country."

• 29:09Speaker 03

  And we were there and I can still remember that. So if we want to import something, we had to get dollars. Either from the government or figure out how to export something that created dollars. So that's where you really start to struggle. Cause you basically relying on the government to exchange boulevards for dollars. Um, and that's where we tried all kinds of things to try to export. I mean, there was salt there. We tried pallets. But every time you tried to do something, somebody in the economy was like. Grabbing that, oh no, if you really want to move that, you know, to the port, that's going to require some. Facilitation payment or something like that. It just, and, and the team down there was desperately trying it. Cause the other thing we needed.

• 29:52Speaker 03

  Beyond just raw materials that we needed spare parts. And this may be lies to your question about what's the situation there? You know, if you need to buy some electrical equipment from Siemens, they're not going to want boulevards. And they want euros or dollars. So we were having to try to figure out how to generate enough dollars just to get. Spare parts and um. You know, I'm not sure how, and I can only speak from my situation is now the team is really focused. Instead of kind of on their day to day job of running logistics and, and parts, you know, and getting things in. Um, their jobs switched to how do we originate dollars? So you have, you know, a couple of people that are just. Expert in government and maybe like camp out at government offices for long periods of time, trying to figure out.

• 30:36Speaker 03

  Winding through the red tape. And then you have people trying to figure out, you know, hey, can we, you know, put uh. One ton, one kilo bag or one metric ton bags together of salt that's sitting in this pile and get them out of the country. And, and sell them to generate dollars. So now you have a. Dollar generation team. And that can, that can play out all over Argentina before Malay. I don't know what the situation is now was like that also. When you have hyperinflation, you get into the situation where you have to have a team that's just hunting dollars.

• 31:07Joe Weisenthal?

  I wasn't expecting the conversation to go in this, but for either one of you, and Jeff, you mentioned the nod. I wasn't expecting to talk about tether in this episode. But in today, 2026, when you think about sort of these currency bottlenecks that exist, do cryptocurrencies, or whether it's stablecoins, or something truly decentralized like Bitcoin, are people seriously either implementing or thinking about how some of these new financial technologies can solve pain points within the global ag trade?

• 31:42Speaker 03

  Mike, this is your specialty.

• 31:43Speaker 04

  Yeah, well, again, I can't speak to the specificity, maybe country by country, but certainly, if you look maybe in the big picture, the average producer somewhere in the world that has a currency issue where it impedes them and maybe the quality of their bank, their access to capital, their access to foreign currency to upgrade whatever it is, absolutely the tethers of the world and things like that are going to fundamentally change the access to that sort of thing, when you compare it to the way it was before, for sure. And I will maybe add a little half answer to what you threw out there, too.

• 32:25Speaker 04

  There's a lot of great stories for folks looking for something to entertain themselves around Bitcoin, especially the early Bitcoin mining that was going on in Venezuela, for people that were concerned about where the country was going, where they would tap into a small hydro plant at maybe a family's place out in the woods somewhere and mine Bitcoin, put it on a wallet, and had it as their escape valve in case they needed it. And sure enough, there was a night where they traipsed through the jungle and went to another country and had it on their wallet and started another life. So yeah, there were some very interesting early pioneering Bitcoin stories around what the Bolivar forced folks to do early on.

• 33:26Speaker 01

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• 34:08Speaker 01

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• 34:49Tracy Alloway?

  Talk to us about people actually leaving Venezuela, because this is also something that you hear a lot about, which is, you know, if you were a Venezuelan with some amount of means in the past, you were very incentivized to leave, especially if you're working in certain businesses that the government was targeting. Did you experience that at Cargill as well, this sort of brain drain?

• 35:13Speaker 03

  It happened all the time. First, I want to set the scene, right? We have a, at the time, we had an office in Caracas, very nice, right? A lot of employees there, not just kind of, because we had a brand business, right? We had people that were label designers, and I mean, it was the full-on, think of it, I don't know, more maybe the proctor, again, well, the retail side of things. So, big office, nice. We had satellite communications there. There was no Starlink yet. And so the office was a nice place, right? And people actually, you know, they're like, oh yeah, I was there on Saturday. And I'm like, you know, and the problem is, is when you left that office, you zipped to your dated community, more likely an apartment complex.

• 35:58Speaker 03

  Um, you, you just had to go from secured compound to secured compound. And then it became, you know, you didn't know if you were having water that week or hot water. You might not have electricity for several days. Um, you might not have access. There might not be anything to buy in a grocery store. Um, now our employees were getting some food from us because we made some basics. Right? You know, every week we would make sure that we got something transferred from the plants and, and put this stuff together. So the life um, style that people lived was not easy, even for those that theoretically had, you know, were well educated, had good jobs. And eventually, um, even our business, of course, the, the business is slowing down.

• 36:44Speaker 03

  Um, and they leave. Um, and then of course, in our case, we had a, a plant that got, uh, nationalized at gunpoint. Well, if you're, you know, a highly skilled manager operator, you don't want to stick around and start to have to do your job at gunpoint. Right? Cause they don't have any expertise in how to run the plant. So the big wave, the first wave, the first, somebody said several million Venezuelans were the most educated, the most skilled, and it compounded itself, right? Because, you know, now nobody knows how to run the electric generation station, right? That nobody knows, you know, obviously the petrochemical industry, you can go get re-employed around the world. You know, if you're a, you know, a petroengineer,

• 37:28Speaker 03

  no problem. And so those people went all over the place and the beauty of working for a multinational is we picked up as many as we could. And that is, you know, in that conversation to bring you, you have an employee they call, they're, they're very nationalistic. They know they're doing important work. They've had enough. And you get that call and they go, you know, they're, they're, they, it's kind of sheepish. They're like, uh, they feel like they're abandoning you. And you know, we go and find them. And my story was, you know, employee, one of my last employees just says, I'm, I'm going to Mexico City. Um, I think his wife had, was working for Sony at the time and had some type of employment. And I said, well, what are you going to do? And he goes, I don't know, but I'm not going to be here anymore.

• 38:13Speaker 03

  You know, I mailed my, I mailed my big screen TV and a couple of things, D H L. And I'm going to take my guitars on the plane and I'm done. And I said, well, I know what you're going to do. You're going to go to this address and you're going to work for me in Mexico. And that played out hundreds of times inside my employer. Um, you'd go to a meeting, uh, in Mexico City. I still remember. A management meeting, they run a very large crush refined facility north of Mexico City. And half the, half the people in the room are Venezuelans, talented, smart, educated. And that, you know, that played out, I know, you know, from my social media, you know, that happened in lots of Western companies. They were very, I, my experience working with Venezuelans was it was fantastic.

• 38:58Speaker 03

  They had a good education system, smart, business savvy. And, um, we gladly re-employed them around the world.

• 39:06Joe Weisenthal?

  Sticking with Venezuela for a moment, and we've heard all the numbers about the oil industry and the amount of upfront capital it would take to sort of profitably begin shipping oil at scale or selling oil at scale. What is your understanding like right now of the equivalent within the realms that you're working in grains? Like, is there the same sort of view that all the infrastructure that was being used during the days when it was working profitably would need a significant amount of capital for an entity like Cargill or the sort of family of global food companies to want to re-enter that business?

• 39:45Speaker 03

  Look, I am not a Venezuela expert. Our business is actually in education and risk management around supply chains, and we do a lot of work with US growers. So this was a bit of an accidental experience to, from what happened to bring me here today. We do know we were struggling to keep the plants maintained. These are, but they're, and I'm sure there's a lot of work that has to be done. I think the number one thing you have to have is security, right? You have to be able, you're going to need some promises. There's a lot of companies that lost a lot of money in Venezuela, right? With the assets they had, because the second you walk away from an asset there, try to even say mothball it, everything gets stolen. Okay, you don't expect there's, you walk into a plant

• 40:28Speaker 03

  that you shut down five years ago, that there'll be anything there. You have to defend it at all times. Otherwise, if somebody's going to go in there and, you know, sell the parts in the black market and scrap the rest, because scrap iron trades in dollars. And so you can't expect that there's, unless the, whatever it is, is running, you can't expect much. And I know that they're, they were started as strange again, strange things that happened as the domestic situation got worse, they actually had to increase imports of finished goods, because you couldn't finish them in the country anymore. But there was still demand, and you had remittances, right? Same with like Mexico, right? So there is some dollars floating even into people that stayed. I

• 41:10Speaker 03

  know, you know, we had some employees that talk about sending money to their families in Venezuela, and easier to do now probably, but that was, you know, the Miami banking connection and some things like that. So I suspect that there's, yeah, tremendous amount of work, but I'm not an expert on the current situation. I think it can be done in the basic staples. Those plants are not that hard. Flower mills, oil refineries, yeah, you know, there's no doubt that the world put their mind to it. And I just saw, we sold $300 million worth of oil here this morning. They went apparently to buy the currency. Remember, we talked about currency stabilization. Apparently, they must have used a lot of that to buy Bolivars and create

• 41:53Speaker 03

  A more stable exchange so you can get the economy floating. So, you know, hats off to the current administration for somebody's obviously paying attention. But yeah, it's going to take security, it's going to take some promises, stability, because, you know, you're talking about putting hundreds of millions of dollars on the ground into a place where effectively those those type of investments were lost. And I don't think that's going to be an easy sell to the multinational world.

• 42:22Tracy Alloway?

  What was it like just moving stuff within Venezuela? Because you describe how an empty plant would uh would be gutted fairly quickly. I imagine if people saw an opportunity, you know, a truckload of something that could be valuable on the road, they probably seized on that as well.

• 42:41Speaker 03

  Yeah, I mean, it doesn't matter. You know, Venezuela was, you know, we had um security experts that worked for us that understood what they had to ground, you know, do on the ground to get shipments like say from the port to the plant or from the plant to a to a grocery store, right? Or something like that, or some kind of distribution. Very, it's very difficult. My more recent, you think this doesn't go on in in Mexico, you know, we were losing

• 43:10Speaker 03

  a lot of trucks. Sometimes we'd get the trucks back. Sometimes we lost the cargo and the trucks. Um, that still goes on, right? Today, and you sit there and try to understand what is the cost of doing business, right? And you will lose some along the way. And um sometimes you halt, you hire local companies that are more able to navigate how to get things moved from point A to point B, and you effectively have to work from inside your compound. You also have to secure uh from theft, right, at the compound. Right? It's just the all these drags on the economy. When you get into these situations, right? It's just dragging the entire country down. Like in hyperinflation, I think if you studied

• 43:55Speaker 03

  in it, you know, Mike and I both have some economics degrees. Um, there's all these dragging taxes on people. You know, you you your employee gets paid today and they just as soon as they get paid, they run out and spend it. Like, they're done for the rest of the day. Right, the shoe leather tax, right? And, and you know, now everything has to be secured with, you know, multi fences and barbed wire and constant guards and guards and trucks and all that stuff. And if you can remove that burden from the economy, it's just a huge, you know, in, you know, boost the economy. Mike and I are, you know, watching things in Argentina. I love going there. It's a beautiful place and highly recommend.

• 44:39Speaker 03

  But, you know, let's see how that goes because it feels like the, the country is starting to lose some of those shackles.

• 44:44Joe Weisenthal?

  Tracy, I just have a warning to you, by the way.

• 44:47Tracy Alloway?

  To me specifically?

• 44:49Joe Weisenthal?

  Yeah, you're not gonna like it. I've been watching the show Landman on CBS. And so when we do commodity episodes, I'm going to make a, start referencing a lot of things that I observe. But one of the themes was, one of the plot lines very early on is the, is the phenomenon of both trucks that disappear because the cartel steal them and then magically reappear a month later. And it's not worth asking any questions because then you have to get the FBI involved and then et cetera. So the idea, what, uh, what Jeff was saying about the truck suddenly coming back is something that I'm, I'm familiar with because I'm a viewer of TV.

• 45:24Tracy Alloway?

  Stood up by the television. I'm going to steel myself for all the land.

• 45:27Joe Weisenthal?

  Yeah, you're gonna get a lot, especially when we do oil episodes.

• 45:30Tracy Alloway?

  Yeah.

• 45:31Joe Weisenthal?

  Um, Mike, uh, talk to us the, uh, give us a sort of your sense of Ukraine now and versus before the war. And obviously there's still weed flowing out, but we talked about the impairment, et cetera. What is the sort of scale of the impairment and the damage, et cetera? And what sort of levels are coming out of Ukraine? And sort of give us your sense of where things are these days versus at the end of 2021?

• 45:55Speaker 03

  Sure. And, and again, I'm going to, I'm going to say something fairly similar to what Jeff is. I'm not as on the ground there, though I'm very close with a lot of friends that are still farming at scale and, uh, and trying to make whatever it is they're doing, uh, work. I, I would, I would sort of start off with a, a theme. I'm sure you've heard that, you know, they're incredibly resilient people. They've been through similar things like this before and perhaps not this generation, but certainly in the not too distant past.

• 46:25Speaker 04

  Uh, whether it be the Halodemore and, and you know, post Soviet uh situation and uh, and, and some of the starvation that came out of that. And then the, the world wars, one and two. And so it, it isn't like it's that distant in, in, in their past. And they're figuring it out in a, in a relatively simplified way. And, and I think that the, the, the two biggest changes a- as it pertains to the grain side is a, a simplification. So instead of some of the more complex to grow or expensive to grow crops like sunflowers and corn. Um, they're pivoting more back to the basics of, of wheat and, and barley and, and, and things like that, that just

• 47:10Speaker 04

  when in doubt, put that out there and, and, and see if we can get at it in the spring. The human, the human capital piece is, is an enormous problem right now. They, you know, just to find people that can, can be part of your work teams, whether it be driving the trucks or driving the combines and tractors and or overseeing the grain elevator operations is, is really, really hard. And, and then as I alluded to earlier, the, some of the ma- main horsepower export points have either been damaged or eliminated entirely or disrupted in terms of them being kind of grazed to where they're located relative to this, this current, you know, uh, fighting front, sort of where it's located.

• 47:50Speaker 04

  But they're limping along and, you know, I, I, I've, I've been kind of surprised to be honest with you, the total amount of grain that's been grown. It's just the mix has changed. The directions through which they're exported are changed and, and certainly that, that ultimately changes the price that comes back to the producer there. So I, I'm sure they're not doing particularly well, but they're, you know, to their credit, they're still, uh, they're still giving it a, a hard swing.

• 48:14Joe Weisenthal?

  Just real quickly, so the, a thing I would like to learn today, what is it about wheat that makes it a sort of simpler crop? To process and export than uh, corn?

• 48:24Speaker 04

  Well, the, the, the seed is, is materially uh, less expensive. The, the fertility required is, is, is materially less expensive, you know, per acre.

• 48:35Speaker 04

  In their world per hectare. The other thing that's just circumstantially supportive in that part of the world is the organic matter and the richness of the soil there is incredible. You can kind of get away with it with lesser intensive agronomic crops like wheat to still eke out a pretty darn good crop. So that's the circumstance there. It's also fairly easy to recycle your wheat and you utilize it as seed. Where that's not as straightforward with with other crops.

• 49:09Tracy Alloway?

  I have one last question, and this is to both of you. But what would be your major piece of advice or message to a multinational company? That's considering either, you know, maybe they're looking at Venezuela and going, there's an opportunity there. I want in, or maybe they're thinking about post-war Ukraine and expansion there. What would you tell those companies?

• 49:33Speaker 03

  Well, I mean, you have to have some expertise if you're going to go into these places. So if you don't have it with you, you need to find it and find people you can trust. Security is going to be your number one part of it. Start, you know, start with a small business, right? To learn how things actually work. We used to start with feed mills. They're relatively, you can put up a kaismer, relatively small portable feed mills and start to learn how things actually work on the ground. We have hundreds of stories where we bought businesses, thought we knew what was going on, even after we'd been there, only to find out on first day that, oh, you know, you weren't, you're supposed to pay a bribe to the meat inspector or something like that.

• 50:14Speaker 03

  So my advice is find a small business that you can run there with a reasonable investment and treat that as a learning curve. Or learn, you know, paying tuition before you jump in and make it, make those big, hard capital asset investments.

• 50:30Speaker 04

  Yeah, and Ukraine has slightly different context. I think the blueprint is there is if you look at the, I would kind of describe the glory days of the grain business in the late 90s, when the infrastructure really got built back, back up in a way that served the global markets with a lot of value added processing, tremendous amount of investment that went through the aughts, you know, probably oh, five, oh, six, oh, eight, right around there. So the blueprint is there. I just think it's going to take, you know, resilient people, patience, attempting to maintain your teams there within the reality of the

• 51:12Speaker 04

  things that are going to be personal decisions for them, for their safety, for their family, for whatever. You're just going to have to go with that flow for the foreseeable future and see how this all plays out.

• 51:24Tracy Alloway?

  All right, Mike and Jeff, thank you so much for coming on Odd Lots. That was fascinating. We could go on for another hour or two or three and listen to all your stories of doing business in these places, but we're going to have to leave it there. So thank you so much.

• 51:38Speaker 04

  Yeah, thanks for having us on. Thank you.

• 51:52Tracy Alloway?

  Joe, that was super interesting.

• 51:54Joe Weisenthal?

  Super interesting.

• 51:55Tracy Alloway?

  Both from an agricultural perspective and then obviously Venezuelan and Ukrainian perspective. One thing that stood out to me was this idea of large companies, multinationals coming together.

• 52:06Joe Weisenthal?

  Yeah.

• 52:06Tracy Alloway?

  When they enter a new market like that, because it becomes easier to operate, I guess, at the legal and cultural level that they're used to. That was really interesting.

• 52:16Joe Weisenthal?

  Yes, I hadn't thought about that at all, right? So it's like global multinationals, even setting aside law, you know, they have certain norms you just sort of expect. And so someone from Nestle talks to someone from, I don't know, whatever, and they're like, oh, we'll have a shipment here at this time. And they can more or less expect that that entity will do that.

• 52:36Tracy Alloway?

  Right.

• 52:36Joe Weisenthal?

  And without too much translation or whatever. And so the idea that that is really important is something I hadn't thought of. Also on this, and it's something I've thought about, even working, working at a large multinational ourselves, is this way that like, large companies are sort of We call them multinationals, but they're also like nations unto themselves in this sense. Like, think about the fact that when you move from New York to Abu Dhabi, to Hong Kong, and back to New York, that there is a team that facilitates all of these processes of like visas and stuff like that and so forth. And like, and I thought about that when he described the phenomenon of the workers being

• 53:18Joe Weisenthal?

  more comfortable in the office than back home, that like, the corporate office in this environment is like this like pocket of sort of, I guess you would say, developed world ease and comfort, right? And that the moment you leave that office, you are out of that. Then you suddenly have to worry about electricity. Then you sort of have to worry about maybe running water and security. And how big companies sort of create these security and legal environments within themselves that are these like cross-border pockets, but that will be the same from one office to another regardless of what country they're operating in.

• 53:53Tracy Alloway?

  Yeah, absolutely. The other thing that I was thinking about was the currency question when it comes to Venezuela. I mean, you would assume with maybe this new relationship with the US, access to dollars maybe will get a little bit easier. But it was fascinating to hear from Jeff just how creative they got when it came to securing dollars. So for instance, you know, trying to export wooden pallets in exchange for US currency and things like that, basically bartering, right?

• 54:21Joe Weisenthal?

  Yeah, it does sound like it basically comes down to bartering or like, here are some sacks of salt that can be used. And then you have this issue, which is that you can have all of the talent in the country, although much of it's left in many of these cases, but you have all this talent and you have all this raw commodities, but you need a part and you need it from some advanced specialty maker of an industrial part for a refinery or whatever. And that's sold by a European multinational and you need a hard currency for that. And so there is no getting around this fact that like, true self-sufficiency is very rare. It almost doesn't exist anywhere in the world, so long as any one component. And of course, we know this is what China is trying to sell for. They want to have every...

• 55:05Joe Weisenthal?

  Aspect of the entire supply chain in-house such that there is no possibility of them not being able to access one part and grinding a whole industry to a halt.

• 55:15Tracy Alloway?

  Yeah. All right. Um, we could go on.

• 55:18Joe Weisenthal?

  Yeah.

• 55:18Tracy Alloway?

  Shall we leave it there?

• 55:19Joe Weisenthal?

  Let's leave it there.

• 55:20Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alockway. You can follow me at Tracy Alockway.

• 55:25Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our guests Jeff and Mike and their work at Aggress Academy at Aggress Academy. Follow our producers, Carmen Rodriguez at Carmen Armin, Dash O'Bannon at Dashbot, and Cale Brooks at Cale Brooks. And for more Odd Lots content, go to Bloomberg.com/oddlots with a daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.

• 55:51Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we talk about what it was really like to do business in places like Venezuela and Ukraine, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

• 56:47Speaker 05

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