What The 'Lentil King of Saskatchewan' Knows About World Trade

We don't know what the end state for the tariffs are going to be, but inevitably there will be some shifts in the way that goods and dollars flow around the world economy. Of course, some parts of the economy are always subject to changing rules around subsidies and tariffs, and that's particularly true in agriculture. On this episode of the podcast we speak with Murad Al-Katib, the President and CEO of AGT Foods and Ingredients, who is sometimes known as The Lentil King of Saskatchewan. He is credited as being a driving force in turning the Canadian Province into a powerhouse of chickpea and lentil exports all around the world. He explains to us why he saw an opportunity in this space, why it's boomed, how the global trade and supply chain of these plants work, and how his company navigates perpetual shifts in agriculture policy around the world. Read more: Trump’s Canada Tariffs Draw Lawsuit by Blackfeet Nation MembersOnly Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/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.

• 0:00Speaker 00

  Finance is increasingly being built on digital rails. But as the adoption of virtual assets, tokenization and stable coins grows, can regulation not only keep pace but help accelerate it? Find out more later in the podcast.

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  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

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  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 "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.

• 1:41Speaker 01

  Bloomberg Audio Studios. Podcasts, radio, news.

• 1:57Joe Weisenthal?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

• 2:02Tracy Alloway?

  And I'm Tracy Alloway.

• 2:04Joe Weisenthal?

  Tracy, Canadian elections last night.

• 2:06Tracy Alloway?

  Yes, big event. I think a lot of people are talking about it in the context of US politics, right?

• 2:12Joe Weisenthal?

  Yeah, of course.

• 2:12Tracy Alloway?

  So we just saw Mark Carney and the Liberals win. And in a lot of ways, I think people would agree that Mark Carney is sort of the antithesis of Trump, right? He's the sort of globalization Davos former central banker guy.

• 2:30Joe Weisenthal?

  Yeah.

• 2:30Tracy Alloway?

  And, and the funny thing is, or the slightly ironic thing is, it seems like Trump might have swung the election in the direction of the Liberals.

• 2:39Joe Weisenthal?

  Well, yeah, you go back like three months ago, or four months ago, or something, and it just seemed guaranteed that the Conservatives, Pierre Poliev, was going to win. And then Trump started talking about making Canada the 51st state, and suddenly fortunes turned very quickly. But that was just a news hook. We're not really doing a Canadian politics episode today, per se.

• 3:02Tracy Alloway?

  We're doing something better.

• 3:03Joe Weisenthal?

  We're doing something better. The real reason that we're doing this episode, this just happened to be good timing for the hook. The real reason we're doing this episode is that several weeks ago, I was reading an article, and I saw a title about a man named the Lentil King of Saskatchewan, or not named, but titled as such. And I thought to myself, the Lentil King of Saskatchewan sounds like a great Odd Lots character, someone that we should talk to, to learn about a very specific business and how it works.

• 3:32Tracy Alloway?

  The Lentil King of Saskatchewan, the Sultan of Split Peas, the Grand Poopa of pulses, the Baron of Beans, Monarch of Multigrains. I can keep going.

• 3:42Joe Weisenthal?

  You did your prep. That's really good. Anyway, we have the Lentil King of Saskatchewan on the podcast today, and we're going to really learn about how the international pulses and grains trade actually work. What does it mean? How does trading work with the US? How does it work with the rest of the world? How do you build that supply chain?

• 4:03Tracy Alloway?

  I'm also just incredibly surprised that Canada is such a big player in this market. I think it exports like a third of the world's lentil crop, something like that.

• 4:13Joe Weisenthal?

  There you go.

• 4:13Tracy Alloway?

  That's kind of crazy.

• 4:14Joe Weisenthal?

  That is a lot of lentils, but they have a lot of land in Canada for this type of thing. Not a ton of people, a lot of land. Anyway, let's learn all about the lentil trade, the pulse trade, the grain trade and so forth.

• 4:27Tracy Alloway?

  Are we going to take the pulse of the pulse trade?

• 4:29Joe Weisenthal?

  We are going to take the pulse of the pulse trade. We are speaking with Murad Al Khatib. He is the president and CEO of AGT Food and Ingredients, credited with turning Saskatchewan into such a powerhouse of trade from lentils. So Murad, thank you so much for coming on Odd Lot.

• 4:46Speaker 04

  Well, thanks for having me.

• 4:47Joe Weisenthal?

  Why don't you start with, what does the lentil king of Saskatchewan do? Tell us about the business of AGT Food and Ingredients.

• 4:55Tracy Alloway?

  Is it good to be the lentil king?

• 4:58Speaker 04

  It's definitely been an interesting career for me to kind of contribute to the transformation of agriculture out in Western Canada. So, you know, coming up on 25 years since I made a decision to quit my job in government at the government of Saskatchewan and move to the basement of my house and drive the transformation of a cropping system that, you know, when I was a kid growing up in a little town called Davidson, Saskatchewan, we grew wheat and we grew canola. And then the farmers had to leave their soil to summer fallow because the nitrogen fertilizer that they used in canola and the oil seed was so heavy that the soil needed to replenish naturally. The alternative to that was to

• 5:39Speaker 04

  plant a nitrogen fixing legume. So lentils, chickpeas, peas, beans, these crops actually fix nitrogen. They don't require nitrogen fertilizer. And so, you know, that was my bet. I mean, I was a 27-year-old young entrepreneur who kind of looked at the situation and said, look, agronomically, if we can grow these things, the world demands them. They're protein crops. If we could intersect, you know, taking our summer fallow into protein and reaching global markets, I could create a business. And that was kind of the premise. So it's been quite exciting to build a multi-billion dollar company based right out of Regina, Saskatchewan, you know, to kind of reach the world, drive the Canadian trade and participate in growing and

• 6:24Speaker 04

  Consolidating a global supply chain in this business.

• 6:28Tracy Alloway?

  So how big a player is Canada nowadays in pulses and grains and lentils and all those things? I mentioned earlier that I think it produces like a third of the world's lentil crop. I did see an estimate that said 60% of the world's lentil crop. So I went with the third, trying to be conservative here. But like, give us some context around where Canada sits in this space.

• 6:51Speaker 04

  Yeah, we would be more, depend on the crop year, but somewhere around 50% or more of the world trade. So, you know, you have to recognize that the traditional growth of these crops were in areas where they consume them, right? Turkey, Middle East, India. India is the biggest giant in this business. You know, with all of the vegetarians, you know, you look at 1.3 billion people, 450 million vegetarians. Vegetable protein is essential for the diet of countries, you know, in the emerging markets. So, you know, they grow them and they consume them. Well, what was missing was global supply in nations that could grow them but not consume them but export them. And so that's where, you know,

• 7:33Speaker 04

  Canada came into the play. Australia, the United States. Now we have emerging origins like Kazakhstan, Russia, Ukraine. You know, the global consumption of these crops are over 100 million tons now. You know, because, you know, you're talking about the traditional crops that we consume. Let's, let's talk about the traditional diet of the world. Let's do it. Rice. You know, rice is 6% protein, corn, 8% protein, lentils, 22% protein, faba beans, 34% protein, chickpeas, 26% protein. I mean, these crops are not in the same class when it comes to protein availability. And the world is in a global protein deficit. So, you know, we always forget one thing. We talk a lot about energy and energy security.

• 8:18Speaker 04

  We talk about, you know, oil and gas. But we have to recognize that protein and, you know, diets are human energy. And so when we look at that, there's a protein deficit in the world. It's causing major socioeconomic problems. And let's look at a country like India. Eighteen percent of children in India are stunted due to protein deficiency. Right? The world has, you know, eight hundred billion people who are malnourished on a daily basis. Over two billion people who are food insecure on a daily basis. So this has become one of society's global challenges. Ten billion people by 2050 quantifies into a statistic where in the next forty years,

• 9:00Speaker 04

  we have to produce the same amount of food that the world produced in the last ten thousand years of civilization. Wow. Just wrap your head around that. Go back ten thousand years, go ahead forty years. You got to equal food production. And that's only if we curb food waste and we actually can store the crops that we harvest. So, you know, when you look at it, it's a global challenge and land and water are not being created. So those are the scariest resources in the world. And Canada is blessed with a northern hemisphere, you know, that ultimately is more resilient on climate change. We have arable land and water, and we have the best farmers in the world with technology and innovation driving our sector. Those are all recipes for what I would call a generational economic driver for this country.

• 9:46Tracy Alloway?

  Joe, could you say that Canada has been blessed in growing grains? Do you get it?

• 9:52Joe Weisenthal?

  Yeah.

• 9:53Tracy Alloway?

  Okay, I'm gonna stop.

• 9:54Joe Weisenthal?

  I get it.

• 9:54Tracy Alloway?

  I won't, I won't do any more puns.

• 9:56Speaker 04

  I'm gonna have a few of those over the course of this interview, I think.

• 9:58Joe Weisenthal?

  I'm sure you've heard of all, Murad, over, over the years. I'm glad you brought that up, actually, though, about the calorie as the original unit of energy that was important. You know, we've never had him on the podcast, but Vaclav Smil talks about that when he talks about the history of energy. And just these calculations in the beginning, okay, how many calories did a farmer have to expend to produce this much land and then so forth? And how many calories were produced? And so forth. So just even thinking about it from that equation is a very like sort of important, I think, lens. Why don't you just describe the actual role of AGT foods? Where do you sit in the supply chain and distribution? Do you have farms yourself? Do you work with farmers? Do you contract with them?

• 10:43Joe Weisenthal?

  Like, talk about where you sit and how a lentil grown in Saskatchewan gets to a consumer in, say, India.

• 10:50Speaker 04

  Well, the entire business plan was set up modern, state-of-the-art processing infrastructure in the areas where we grow these crops. So we contract directly with farmers. We are the ones who transform their products into saleable, you know, human consumption products. So we own factories in Canada, the US, Australia, South Africa, Turkey. So I started with one small little factory in Regina. We now have forty-six manufacturing and processing facilities in five continents around the world. I started in the basement of my house. There's now thirty-six hundred employees.

• 11:25Joe Weisenthal?

  Wow.

• 11:26Speaker 04

  So, you know, what we do is we take those crops, we clean them, we size them, we peel them, we split them, we can them, we package them, we put them out and we fraction them into protein starch, fiber, flours. I mean, we put them into food products. We do the full range of value adding. And in the scale of our business now, you know, with, let's say, around three point two billion in revenue this year, we've become a major global supply chain in this particular segment of the business. In fact, if I look at, you know, containerized agricultural shipments, AGT would be among the two or three largest containerized shippers of agro products in the entire world.

• 12:06Joe Weisenthal?

  Wow.

• 12:07Speaker 04

  So, you know, we ship to a hundred and ten countries actively.

• 12:10Joe Weisenthal?

  And how does it get there? Like, what is the, okay, so from a farmer in Saskatchewan, how many links are there on that chain?

• 12:15Speaker 04

  So we'll take it into, let's say, a farmer in Eston, Saskatchewan. We'll deliver it to our location at Eston.

• 12:23Joe Weisenthal?

  Okay.

• 12:24Speaker 04

  We will then take that grain, we'll put it into a rail car that we own. So those owned rail cars then go into the CN rail system. They get transported to a port facility, let's say, I just did one as an example, and on May the sixth, we're going to ship a vessel of lentils to Turkey. So those Eston farmers would have filled the railcars. We're shipping it to Thunder Bay. At Thunder Bay, we have an ocean terminal where we'll load a vessel. That vessel will transport 21,000 tons of lentils that will go to Turkey. They will be offloaded in the port of Mersin, Turkey, which is in the southern Mediterranean. We have factory seven kilometers from the port.

• 13:06Speaker 04

  We'll peel them, split them, polish them, package them, and then they'll be shipped to Iraq. They'll be shipped into the Gaza refugees. They'll be shipped into the Middle East region and they'll be consumed locally in that entire region on the food side. Wow. So you know, where we play is in the entire supply chain, taking it right from the farmer, right through to the distribution, directly onto the consumer shelf. And you know, that was the strategy that we wanted to to build out. It gives us resiliency.

• 13:35Tracy Alloway?

  I was gonna ask, is it normal for agricultural companies to actually own their own like transportation capital? You mentioned train cars just then. That seems extremely vertically integrated.

• 13:48Speaker 04

  Well, yeah, actually, I was definitely not, you know, the normal thought in that. And in 2015, I decided to build a transportation business. And so we bought 650 kilometers of short line railway. Wow. We bought the Saskatchewan government grain car fleet. So when the Canadian Wheat Board was dismantled, the Saskatchewan flagged grain cars, I bought them. We bought 13 locomotives. We set up our own transportation infrastructure, linked it in a long-term agreement to CN Rail. And you know, we're able to access it through ocean port infrastructure. We actually took that business in 2025 in January,

• 14:29Speaker 04

  and we sold it over $192 million to an infrastructure fund in the United States. And then we contracted them back to provide a service for the next 20 years. So you are correct. We actually built out a transportation infrastructure that didn't exist to handle these kinds of commodities. Hmm. And then we found a partner to run it for the long term, and it gives us a competitive advantage to get our products to market.

• 15:09Speaker 00

  What's next for virtual assets? I'm Jacob Grease, host of Economy Scale, a series exploring growth in key global sectors. And in this episode, we're diving into the digital forces shaping finance. Sean McHugh from Dubai-based Virtual Assets Regulatory Authority has this to say.

• 15:25Speaker 05

  We're seeing a lot of institutional players come in, digital asset dedicated hedge funds, high-frequency traders and that sort of thing, and folks who service institutional clients.

• 15:34Speaker 00

  As more capital enters the market, adaptive regulation is likely to become increasingly key. Reece Merrick of Ripple says.

• 15:41Speaker 06

  A lot of regulators globally would like to keep the industry at arm's length. That's the opposite here. I think also what you'll find is that regulation and frameworks can come out, but some of them are maybe a slight iteration on some 80-year-old policy and not actually in line with what the technology can do and offer. And again, that's very different in Dubai.

• 16:01Speaker 00

  Listen to the full episode wherever you get your podcasts. This series is brought to you by Bloomberg Media Studios and the Dubai Department of Economy and Tourism.

• 16:11Speaker 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 Businessweek'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

• 16:53Speaker 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.

• 17:34Joe Weisenthal?

  I have a question, you know, you mentioned that the only scarce resources are land and water. Can you talk about yields on an acre or yields on a given farm today versus when you got started in the industry and how what you've seen in terms of technology and productivity growth at the land level?

• 17:53Speaker 04

  Massive, massive transformation. So precision agriculture, digital infrastructure has transformed the productivity of Canada. And, you know, when I was a kid growing up in that little village of Davidson, 1,200 people in the middle of Saskatchewan. You know, as an immigrant Turkish family, the farmer would go out and kick the dirt. He would put his hand into the soil. He'd have his wife with him and say, what do you think? Should we go? And she'd say, yeah, let's go. And they would go and start seeding. Today, we're soil sampling, we're analyzing the soil and the nitrogen in the soil. There's, you know, precision weather stations that are measuring moisture. We have zero minimum tillage where GPS systems are giving the farmer

• 18:36Speaker 04

  the exact placement of seed fertilizer in a single pass without breaking the soil using air channels. We're putting the seed in a precision basis to maximize the yield, to lower the amount of nitrogen fertilizer being used in all crop rotations, which ultimately saves inputs and lowers the carbon intensity of our agriculture. Our yield curves have been massively increasing, you know, to a point where if I look at the next decade ahead in Saskatchewan, I'm forecasting seven to 10 million additional tons of grain from the same amount of acres that are being seeded. You know, that is a massive.

• 19:15Joe Weisenthal?

  Wait, what's the baseline? What's the bait? Seven to 10 million on top of how many?

• 19:19Speaker 04

  We're growing about 30 million tons and we're going to have another seven to 10 million. I mean, you're talking about 20 to 30% yield increase over the next seven years. I mean, when I chaired the National Strategy Table for Agriculture and Food for the Government of Canada, we set a target in 2019 that the agriculture sector in our country would grow from 45 billion to 85 billion of exports in a five-year cycle, and domestic agricultural output would grow from 120 billion to 145 billion. And we reached that target in three years. I mean, what sector of our economy can deliver 65 billion of growth in three years? Agriculture did that in this country.

• 20:03Speaker 04

  So the tangibility of that opportunity of global food insecurity, the productivity of precision agriculture in our country, and you know, the ability to get our products to market, you know, this is the recipe that I believe is going to be a big part of the government economic agenda going forward. So, you know, we talk a lot about natural resources that are in, you know, conflict in certain mindsets, whether it be oil and gas or mining. There's very little controversy on the growth of the natural resource sector in agriculture. So from that perspective, I see that as being a key opportunity for this country, you know, and one that I'm very excited about for the next 20 years of my career.

• 20:45Tracy Alloway?

  So I take the point about yields having been improved, but at the same time, there's a lot of talk about soil exhaustion, right? And one of the reasons this is on my mind is because I was gardening over the weekend on an old farm property, and the soil is just terrible. It's basically dust, like there's no tilth. I think I found one earthworm in like six hours of digging. How big a problem is soil depletion? And you touched on this earlier, but what role can lentils and beans play in that?

• 21:19Speaker 04

  Well, and that that's actually the key. The key is is that farmers in Western Canada are now practicing a sustainable three crop rotation. So one year they'll grow that wheat like when I was a kid, the next year they'll grow an oil seed like canola. And then the year after that, they'll plant the legume that will fix the nitrogen. By using zero minimum tillage, we're conserving soil moisture. We're managing pests and the health of the soil. And we're actually using farming practices where without tilling, we're returning biomass into the soil. So from that perspective, when I look at the sustainability of soil health, the farmers in Western Canada have got it. And you know, that is something that bothers me is

• 22:03Speaker 04

  people talk about how regenerative agriculture is such a key part. Well, in Western Canada, we've been doing regenerative agriculture for the last forty years. This is something that is actually foundational to the success of the Western Canadian, and I mean, the Canadian agriculture sector in general. So, you know, I think that when I look at soil depletion and soil health, it's about farmers pushing the wrong rotations, growing crops on top of crops, the same crops. You know, ultimately, if you don't rotate, you have pests that multiply, you have diseases that ultimately get resistant to any type of management. So, you know, this kind of diversity of our agricultural system

• 22:46Speaker 04

  is one that not only has to be celebrated, but it's actually yielding that yield gain. So, you know, not only is our soil health at at a peak, but it's also something I want to be clear, we can't take for granted, we have to be continuously innovating to make sure that we maintain that. I mean, I say the canola fields of Saskatchewan are the same as the oil fields of Saudi Arabia. Only every year it replenishes naturally. So we can take crops, we can produce renewable fuels, we can take crops, extract protein and feed the world. But we have to make sure foundationally that soil health is at the forefront. And I think it is in our farmers' minds and in the practices that they do.

• 23:26Joe Weisenthal?

  So you've described this global supply chain that exists and the fact that you can get the lentil product from a farmer in Saskatchewan all the way to a consumer in India or Iraq or Turkey, et cetera. Obviously, we're having this conversation, at least on the US side, with this turn against globalized supply chains, globalized trade and so forth. Talk to us a little bit about how you see the state of US/Canda ag trade, or give us the short history of the various turns of the dial there and how some of these conversations are affecting your business.

• 24:05Speaker 04

  Look, I think we've got to recognize one thing. We have a president in the United States today who's just very loud and using tariffs as the mechanism to not only provoke conversation but to drive policy. Protectionist agricultural policies in the United States are not something new.

• 24:20Joe Weisenthal?

  Right.

• 24:20Speaker 04

  And I always have to remind people that country of origin labeling was a Barack Obama policy that continued through the Trump administration and into the Biden administration. So every government in the world, agriculture is the most political business in the entire globe because farmers have to be protected by governments that are elected, yet food inflation and food security are paramount considerations in the health, wealth, and security of every nation in the world. So when we look at it, let's not forget one thing. When a baby is hungry, they cry. When an 18-year-old man is unemployed and hungry,

• 25:02Speaker 04

  they protest. So ultimately, a big part of civil obedience in the world is available food, and that growing food insecurity is one that I think is going to be paramount. So when I look at even US policy, look, food security is a foundational part of US intelligence and foreign policy. And so from that perspective, I believe that agricultural trade...

• 25:27Speaker 04

  Will have to be preserved as a part of the overall policy framework. So, you know, we're going to see tariffs, we're going to see protectionist measures being more prevalent in the world. But I do think that ultimately, food are going to be concessionary items. Governments are going to allow them to flow. Governments will use tariffs to protect their farmers when they need to at times where they harvest their crops. But they need food available. And, you know, the COVID post supply chain disruptions and food lines and food inflation and, and, you know, food being a big driver of that inflationary environment in the world is something that everybody recognizes can't continue. On the US policy side, domestic agriculture in the US and Canada are very integrated.

• 26:12Speaker 04

  So if I look at, you know, the pasta on the shelves of the US consumer come largely from Durham wheat in Western Canada. The overall integration of our livestock sectors, cropping sectors are there. And ultimately, I think we're going to see further integration. We're going to see, you know, getting over this current protectionist conflict laden dialogue to recognizing that the Americas integration and more reliance on each other as nations in the Americas is going to be part of economic prosperity. And, you know, I think that, you know, if I look at the Trump administration, you know, kind of policy on Canada. We have to just remind everybody very clearly to have com heads.

• 26:58Speaker 04

  Thirty one US states have Canada as their largest trading partner. The ultimate availability of food in the United States is, you know, not completely reliant, but we certainly have a big influence on food prices. And so, you know, I'm a very strong optimist that agriculture will continue its integration. And that, you know, ultimately food and I believe energy are going to be the two sectors. And the third one, from a Saskatchewan perspective is potash. I mean, eighty percent of the potash in the United States, which is a necessary nitrogen element, you know, comes from Canadian mines. So, you know, from that perspective, you know, there's certain sectors that I think are mutually beneficial, that are going to enjoy heightened access in some sort of resolution.

• 27:41Tracy Alloway?

  Okay, so agriculture might be special in one way or another, but just to drill down a little bit into specifics.

• 27:50Tracy Alloway?

  If the US slaps tariffs on Canadian lentils, what is the first thing that happens in your supply chain? And I guess maybe we could go back in history and talk a little bit about the tariffs from India on lentils because you have experience with this, right? Like you have gone through this process. So what exactly happens?

• 28:12Speaker 04

  Agriculture is no different than any other sector, except that our markets are already a lot more diversified than, you know, other sectors. So, you know, when I look at the crop sectors in particular, wheat, canola and pulses, we do have shipments into the US on a regular basis, but it's still making up a relatively small percentage when you look at it compared to other sectors reliance on the US. So, you know, one of the key things to having strength in a tariff or a trade protectionist environment is to have alternative markets. Now for us, I worry more about the reciprocal tariffs in places like China, India and other large markets than I do only the US market. I mean, it's one of the considerations.

• 28:57Speaker 04

  We want that resolution. But, you know, what we do is we pivot. You know, when we were facing the tariffs on the March deadline than the April deadline, you know, as a company, we already prepared for this. We have a North Dakota manufacturing facility that was going to manufacture more for the US market. We were going to switch our supply chain to reliance on North Dakota and Montana, and we were going to take the Western Canadian product and we were going to go out to the Middle East, into other markets in Asia. We're going to put a heightened focus on South America and we're going to ship into Europe. So, you know, that's where you have to be. And I think that this is ultimately, you know, my dialogues with Prime Minister Carney prior to the election and my dialogues after with Prime Minister Carney are going to be,

• 29:38Speaker 04

  trade diversification agenda is not something that we can blink at, no matter how quickly or how comprehensively the resolution is with the US. We need to finally execute trade diversification in this country. We need to recognize that our industries have become overly reliant. We've been complacent. You know what? This has to be a wake up call to my colleagues in every industry in this country. Wake up, over reliance, eggs in one basket is a dangerous remedy for long-term sustainable health of your business. And you know, ultimately, that's where we have to go. We need bilateral trade agreements. We need to resolve India and China as powerhouses that balance our reliance on the US.

• 30:22Speaker 04

  And we need to monetize the European Union trade agreement that we've already signed. We need to ensure that we get relevance with these countries. And agri-food, energy, and potash and uranium are four things that get us relevance with these nations. We need to parlay that into free trade agreements, bilateral exchange agreements, and we need to get ourselves market access.

• 31:04Speaker 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 and hiring practices.

• 31:47Speaker 01

  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.

• 32:26Joe Weisenthal?

  Obviously, negotiating free trade or bilateral trade agreements with different counterparts is an important element. There's also a physical element, right? The quality of rail infrastructure, the quality of export terminal, and I guess on the other side, import terminal infrastructure. In the context of energy, we hear a lot about this. And are we building export terminals fast enough? And is it cheap enough? Is it economical? Talk to us about the sort of like the physical things that need to get built to, as you put it, monetize these relationships. And like, I don't know, in the US, I know that building everything is crazy expensive these days. What is the state of this physical trade infrastructure look like in Canada right now?

• 33:08Speaker 04

  We have to acknowledge that we've got, you know, major challenges. I mean, we've got large geographic land base. We have mountains between, you know, production regions in Western Canada and the coast in Vancouver. And we have minus 40 degree temperatures. So, you know, these are all constraints that we have to live with. And, you know, one of the things I, you know, I've become a little bit known for in this country is my adage that if I was Prime Minister for one day, I would invest $100 billion in trade infrastructure because that ultimately would pay dividends for generations to come. So, you know, we need to revive the gateway strategies. If I look back at the 2005, 2011 period,

• 33:50Speaker 04

  the Asia-Pacific Gateway Initiative was one of the most successful in recent times in Canada. Where you had, you know, municipal governments, provincial governments, private sector players, Class 1 railways, port authorities, port infrastructure, private sector players working on first mile and last mile. And we made major progress on developing the Asia-Pacific Gateway. We need to acknowledge that we need to build a trade infrastructure for 30 and 40 and 50 years from now, not just for 30 and 40 and 50 weeks from now. We need to relocate rail lines out of the center of communities across our nation to plan for development of industrial and residential developments and allow for the trade infrastructure to have room to scale, you know, as we continue to build out.

• 34:35Speaker 04

  I mean, Saskatchewan is a perfect example. As I said, 7 to 10 million more tons of agri. With the BHP investment of $12 billion in potash, K plus S mine expansion, and the expansions that are on for Nutrien and Mosaic. You have roughly about 12 million additional tons of potash that will come online over the next decade. And, you know, if we get oil and pipelines and we get the dry bulk commodities on rail, we have some capacity. But we've got to think about what we're going to be 30 years from now. If we continue on these yield trends, we're going to reach 100 million tons of production one day. Today, our average is 55 million tons in this country, and I agree.

• 35:16Speaker 04

  So from that perspective, the economic benefit is there as well, which ultimately, you know, funds the Canadian way of life, social programs like healthcare, education, you know, the things that we as Canadians value, you know, in terms of being Canadian versus being, living in another nation around the world. So that's the opportunity in trade infrastructure. I have a level of optimism that, you know, our newly elected Liberal government, and frankly, it would have been the same if the Conservatives were elected, trade infrastructure is recognized as an essential element of that trade diversification strategy. We focused a lot on north-south infrastructure, and not that we should diminish that, because

• 35:59Speaker 04

  I think people got to recognize, we're not saying trade less with the US. We're saying trade our growth with new countries. Over time, we will diversify. Trade diversification could not happen in one day, one year, or even in 10 years. It, you know, we have created an economy that's reliant over decades. We need to diversify over the next decades.

• 36:25Tracy Alloway?

  So I know it's early days, but just on this point, farming is clearly a very capital intensive business, and you want to be investing in trade infrastructure and things like that. Have you noticed any changes in capital availability post-Trump's win? So are people, maybe they feel more cautious because there's all this policy uncertainty, or maybe people are directing capital away from the US and towards Canada now? I don't know. Have you noticed any shifts in the pattern?

• 36:57Speaker 04

  I think that certainly, short-term disruptions like this cause capital to be nervous. There's no doubt about it. But if I look at my partners in AGT, Fairfax Financial is a 60% owner of my company. So Prem Watsa believed in the long-term growth of an agri-food champion from Canada, along with Omer's pension program. Those two companies own 72% of my shares, along with myself. And that kind of capital source is recognizing Canada's role to build billions of growth in this sector. In the trade infrastructure side, I think that there's a recognition that we're not building this only to talk about, "Oh, we've got great infrastructure."

• 37:41Speaker 04

  There's a large economic benefit that will come along with it that can allow the tax base to be directed into the things that need to be done in this country. So when I look at that recognition, again, not looking with rose-colored glasses, I believe capital will flow. We need to do a better job of figuring out how to monetize trade infrastructure into projects that could be funded in more traditional project finance. So it's easy on a toll road. You have an income stream, and someone will finance that. How do you finance the growth of Class 1 railway infrastructure, or bridges that go to the ports, or port infrastructure? You need to come up with economic models that create cash.

• 38:25Speaker 04

  And I remind people that extra revenue is cash, and cost savings in the supply chain are also cash. So from that perspective, I think that we're going to see a capital attraction because Canada has such a fundamental competitive advantage in the natural resources sector that capital will come here, get our products to the places that demand them.

• 38:49Tracy Alloway?

  So, speaking of cost savings in the supply chain, one of the things we've seen since the tariffs announcement is a slowdown in global shipping, or a slowdown, at least, in shipping between China and the US. Does that affect you at all? Because I imagine, on the one hand, maybe container rates start coming down, which would be good for you. But on the other hand, my understanding is that a lot of your produce is shipped via backhaul. So the ships come over carrying, I don't know, toys or whatever, and then they're loaded with all the agricultural products, and they're sent out into the world wherever those are going to be processed or sold.

• 39:30Tracy Alloway?

  So are you experiencing any changes in terms of the actual flow of ships here?

• 39:36Speaker 04

  That's a great question, and you are absolutely correct. The trade flow in the world is dependent on balance. We can only fill what comes in full. We send it back full. So, you know, ultimately, it has been an Asia trade into North America, and a North American trade back out to Asia. So far, you know, the disruption time period has been small enough that we haven't felt it yet, but it's something we're watching very, very closely. Now, what I think we have to recognize is that although President Trump would like to have manufacturing at the snap of a finger in the US, it's going to take time, if they do succeed,

• 40:19Speaker 04

  in building out domestic capacity for a number of these consumer goods that they want to produce. And then we have to also be realistic that the cost of manufacturing and the cost of production in the US is going to be a lot higher on a number of these items. So, you know, I still have a view that, you know, there will be some sort of a balanced resolution where there will be some tariffs, but there ultimately will still be production around the world coming into North America. So, you know, I think that, you know, no matter what, if it doesn't come from China, it may have to come from Korea, or it might come from, you know, Indonesia, or it may come from, you know, another nation that is set up to manufacture. You know, if you look at, you know, Apple as an example, is saying now,

• 41:02Speaker 04

  "Well, we're going to stop shipping out of China. We're going to start shipping out of India." You know, there's ultimately going to be trade flows that are going to come in. So we're watching it carefully. We are definitely concerned, but we ultimately know the consumption's not going away. So that consumption has to be filled somehow. And ultimately, it will ultimately be through a combination, long term of more domestic manufacturing. But you know, at the end of the day, that's not going to happen in the near term. Next five to seven years are going to be transition years. And you know, again, our supply chains will have to also transition. If we don't have container availability, what you'll see is bulk supply chains getting bigger.

• 41:46Speaker 04

  Like we're shipping those lentils in a vessel to Turkey and we'll have to be manufacturing elsewhere as well. So we'll have to be a part of global value chains as they settle in this new geopolitical and trade regime in the world.

• 42:00Joe Weisenthal?

  I just want to get back to the politics of farming for a second. And you mentioned, you know, this is one of the most politically sensitive topics because every government feels some impulse to take care of their local farmers and also every citizen in the world of every country eats and is sensitive to food inflation. And Tracy asked about India earlier and they've had an on again, off again, lentil import tariff. Can you talk a little bit more about what you saw there specifically? Like both, I guess, the domestic politics of lentil tariffs? And then again, like how it affected your business specifically as they've toggled that on and off?

• 42:39Speaker 04

  Look, you know, I've been a very vocal advocate over the last, you know, couple of years to have the Canadian industry recognize that the domestic agricultural policy of India is actually a sensible policy. That the Modi government has no choice but to do it. You know, ultimately nations in the world have to build local production to insulate themselves from food security issues. So you know, the view that 22 million tons of production of pulses in India should become 35 million one day will still not even keep pace with their domestic consumption. So there's still going to be a net importer at that. So how can we as a nation?

• 43:24Speaker 04

  You know, fault another nation from trying to encourage local production. We've shifted our dialogue with India to say, look, we are the reliable partner to fill your gaps. We're going to see in countries like India, Turkey. Turkey has been doing this for decades. From May until September of every year, when they harvest their crop in June, Turkey has a lentil tariff on. So if you're bringing in lentils from Canada, they put a tariff on to protect their domestic price of lentils for their farmers. And September, they take it off to protect against food inflation. So these are the ways that tariffs are used to build local prices,

• 44:05Speaker 04

  farm receipts, and yet not sacrifice the domestic prices, you know, for affordability. India is going to do the same thing. And I think ultimately, it's a sensible policy. We've got to recognize that trade relationships are no longer going to be, how do we drive by and sell? Nations in the world are looking for two-way trade, investment and innovation and technology development and transfer. So, you know, we as a company, AGT, are taking that view. We're building a new processing plant near Mumbai, where we're going to be, you know, taking Canadian materials. We're going to be processing them in India and we're going to be playing in the local market. And we're also going to be exporting out of India

• 44:48Speaker 04

  to nations in Asia where they have a competitive advantage. So, you know, that's the way that you build the long-term trade relationship. You know, recognizing that we can't sit here and say, we want tariff-free access to all markets around the world. We have supply management in our country. We're restricting the access to our agricultural sector for nations around the world. So you know what? You want to be free traders? Let's concentrate on the things that we need to do in this country. Interprovincial trade barriers have to come down. We have to open up our domestic agricultural markets. And we have to recognize that we're going to have more to gain from free trade than we are to lose from free trade. So, you know, I see this as a transitional time

• 45:31Speaker 04

  where, you know, ultimately, you know, deals are going to get done and trade is going to happen. It has to because economies can't transition quick enough to fill the gaps. That's what's ultimately going to drive it.

• 45:46Tracy Alloway?

  So everything you've outlined sounds very sensible. Boosting production in North Dakota, setting up more bilateral trade relationships, maybe moving some processing capacity elsewhere in the world. But it also sounds very expensive and very difficult to do if you are a smaller scale farmer. And I guess one of the concerns with the rise in trade protectionism in general is that you are going to get even more consolidation in agriculture. And we know that small scale farmers have been suffering for a while. It's difficult to compete against giants in the agricultural business.

• 46:28Tracy Alloway?

  Is that going to become even more of a trend in the current circumstances? Like, is scale going to be essential, basically, to surviving?

• 46:38Speaker 04

  Scale today is essential to surviving. But that doesn't mean that small and medium enterprises don't have a role to play in scale. You know, I always counsel entrepreneurs. There are, you know, different ways in which to achieve scale. You can build scale, you can buy scale, or you can partner scale. Right? That's it. That's the key. And, you know, what we have not had enough of in our economy in Canada is a recognition. You know, I call it the dinner diner phenomenon. Do you want to be dinner or do you want to be a diner? I want to be a diner. I want to eat other businesses and grow my scale. I don't want to build myself to be eaten by somebody else.

• 47:23Speaker 04

  So ultimately, you know, what we encourage is companies have to build themselves into a link in the global value chain. They have to recognize what role they do play, and they have to link themselves into a supply chain that makes a lot of sense. You know, I was in Turkey three days ago. In fact, I was there on the earthquake day in Istanbul, so scary day that day. But, you know, ultimately... I was in Turkey, meeting with, you know, customers from Japan. You know, we've linked with the major Japanese trading houses on the development of our pasta manufacturing business. Because the large Japanese trading houses have strong linkages into the Japanese retail

• 48:07Speaker 04

  and the Asian distribution side of things. So, you know, we've recognized, even as a relatively large company, that we don't have the scale and we're partnering with companies that have a hundred billion dollars in revenue. Because we can't solve that distribution. Or in India, we're in discussions with the large majors like Tata, or Reliance, or, you know, those types, Wilmar, Adani Group. I mean, these are the type of companies that dominate, you know, the distribution in those nations. So consolidation, you know, at the farm gate is already happening. I mean, can you, can you imagine? When I was a kid, growing up again, you know, we as a family had 4,000 acres of farmland.

• 48:49Speaker 04

  That was a big farm in 1978. Today, at 4,000 acres, a family can't farm full time.

• 48:57Joe Weisenthal?

  Hmm.

• 48:58Speaker 04

  You know, they ultimately will need to have a second job.

• 49:01Joe Weisenthal?

  Wow.

• 49:02Speaker 04

  You know, you, you basically say today, a mother, father, and a daughter who are farming would have to be 12,000 acres in order to sustain a family. So from that perspective, you know, again, scale is actually part of our advantage in our agricultural system. And we're a low-cost, high-quality producer. We're competing against nations that have one acre and two acre and five acre farms.

• 49:24Joe Weisenthal?

  Hmm.

• 49:25Speaker 04

  That are very manual and not mechanized. So ultimately, you know, we have to recognize, I don't think it's a bad word, I think it's transition, but I do think that SMEs are key, small and medium enterprises are key because they're nimble. They can innovate. They can deliver a product that is fitting. You know, sometimes bigger companies aren't good at doing things like that. We're not nimble enough to do it. We need SMEs to make us competitive. We've got to build the ecosystem and the linkages. We haven't done that in this country.

• 49:55Joe Weisenthal?

  I just have one last question, and it sort of relates to the product. Activity gains that you've seen over the years and farming from all kinds of like sensors. And maybe there's drones involved and stuff like that.

• 50:06Speaker 04

  Yes.

• 50:06Joe Weisenthal?

  Or lower cost of tractors or whatever. There's obviously a lot of anxiety about how much technological products come from China. When you look at the farming business in Canada, how much of that tech stack that drives productivity gains these days? Comes from a Chinese tech, basically, or Chinese manufacturing in the form of farm equipment?

• 50:27Speaker 04

  I would say, you know, from my experience, there'd be a lot more reliance on the overall Asian.

• 50:33Joe Weisenthal?

  Okay.

• 50:33Speaker 04

  Manufacturing, not just China, and I think that's an advantage for us. You know, again, a lot of the sensors and things that we use are now manufactured in so many nations around the world that we can kind of dodge that. They think the key is, you know, on the manufacturing side, you know, a lot of the farm equipment is, you know, still very much dominated by US manufacturers. But a lot of the core technologies like zero minimum tillage, you know, the center of manufacturing for that technology is Western Canada. We're the ones who developed it, you know, companies like, you know, Borgo Industries and, you know, Flexicoil and Morris Industries. These are industries that were here for the last four decades, you know, developing out these zero minimum tillage seeding systems.

• 51:16Speaker 04

  All we've done is add on the technology to that GPS sensors, you know, decision support systems. The big guys, the John Deers, the Case IH, I mean, these are again, large global companies who are ultimately driving it. Data is something that is going to be a key advantage for us. I don't see, you know, vulnerability, maybe I'm overstating. Yes, there's always vulnerability when you have a tech stack. But you know, ultimately, we're using so many different technologies and we're stacking them together. That I think that ultimately we have something that is not only unique, but it's something that you can only implement at scale. You can't digitize one acre farms. It's not cost viable.

• 52:02Speaker 04

  You know, we have single farm families, you know, in West Central Saskatchewan, who's seeding 300,000 acres.

• 52:10Joe Weisenthal?

  Wow.

• 52:10Speaker 04

  Of farmland this year, 300,000 acres. You know, these farm families have, you know, two generations, they're four generations on the farm. And they have full time IT departments on their farm. So these are not, you know, corporate farms in the, in the mindset. Don't forget, we still have foreign ownership guidelines that prevent foreign ownership of farmland in Saskatchewan as an example. So these are still family farms. They've just scaled to be something that is very large and very competitive.

• 52:40Joe Weisenthal?

  Murad Al Khatib, the lentil king of Saskatchewan.

• 52:43Tracy Alloway?

  The legumary lentil king.

• 52:46Joe Weisenthal?

  The legumary.

• 52:46Tracy Alloway?

  Of Saskatchewan.

• 52:48Joe Weisenthal?

  With his pulse on the pulses. That was fantastic. I learned a lot in that conversation. Thank you so much for coming on Odd Lots.

• 52:56Speaker 04

  Thank you.

• 53:10Joe Weisenthal?

  That was a lot of fun. There were a lot of very interesting strands to pull out from that conversation. I do think like the politics of food is definitely one of them. And this idea that every government basically around the world is trying to balance the distinct demands of their local constituency, food security, which can kind of only be ensured by having some sort of local production, and then the fact that everyone has to eat.

• 53:33Tracy Alloway?

  Are there any countries or governments out there that don't sort of idealize agriculture?

• 53:39Joe Weisenthal?

  Yeah, it's a great question. I don't know, like in Singapore, did they have, I don't know. There's got to be some, you know?

• 53:45Tracy Alloway?

  Yeah, maybe Singapore. I guess some Middle East countries. But even there, I know they're doing stuff with like hydroponics. Anyway, a couple of things that stood out to me. So Murad's comment about trade being a balance, especially in global shipping, I think is really important. So even if Canada wasn't directly affected by something like US tariffs, there would still be that knock on effect from ships being rerouted around the world. And this is something that we saw in the pandemic, of course, you know, like ships coming over full and then returning empty and that being a pretty big problem for a bunch of companies and American consumers. So that's one thing. And then the other thing is, The consolidation aspect.

• 54:29Joe Weisenthal?

  Yeah.

• 54:30Tracy Alloway?

  It just seems to me like the only, I mean, we said it, right? The only way to survive, especially in a world where trade restrictions are becoming more popular, really is scale.

• 54:41Joe Weisenthal?

  Yeah.

• 54:42Tracy Alloway?

  It's going to be near impossible, I think, for the smaller guys to compete.

• 54:47Joe Weisenthal?

  I'm glad you asked that question about the backhaul, because this is one of the things that's been worrying me. It's like, you know, people talk about the sort of tariffs and from a sort of strictly fiscal standpoint, like, this is going to raise the cost of X, and so there's going to be less. But as we recently saw, like, there's another knock on effect, and I'm glad you brought that up, about the fact that the ships just might not be there.

• 55:09Tracy Alloway?

  Yeah.

• 55:09Joe Weisenthal?

  In place, or certain goods that are intermediate goods in some way. And so that's how you get these like ripple out disruptions beyond just, oh, this is lost product for me, or this is lost income for you. I also liked how Murad like sort of, you know, talked about the calorie is the original form of energy, which I just find to be really important in this idea that the productivity in the ag space is pretty extraordinary, and the fact that there's still more yield expected. And then the question is, do you have the rail capacity? Do you have the export terminal capacity to actually monetize these agreements and increase yield?

• 55:47Tracy Alloway?

  I'm just going to say lentils are amazing.

• 55:49Joe Weisenthal?

  Oh, yeah.

• 55:49Tracy Alloway?

  They're great, and I am really, really hungry, and I'm craving like a bunch of doll.

• 55:55Joe Weisenthal?

  Yes, I know, I haven't eaten today, and so I've had the exact same thought during the entire conversation.

• 56:00Tracy Alloway?

  So good, and good for the soil.

• 56:02Joe Weisenthal?

  Good for the soil.

• 56:03Tracy Alloway?

  All right, shall we leave it there?

• 56:04Joe Weisenthal?

  Let's leave it there.

• 56:05Tracy Alloway?

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

• 56:11Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the stalwart. Follow our guest, he's at Murad AGT Foods. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashil Bennett at Dashbot, and Kale Brooks at Kale Brooks. For more Odd Lots content, go to Bloomberg.com/oddlots, where we have all of our episodes and a daily newsletter, and you can chat about all of these topics, including supply chains 24/7 in our Discord, discord.gg/oddlots.

• 56:38Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we speak to the Lentle King of Saskatchewan, 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.

• 57:30Speaker 07

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• 58:07Tracy Alloway?

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