Tracy Aloway: Hello and welcome to another episode of the All Thoughts Podcast. I'm Tracy Aloway.

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

Tracy Aloway: Acquisition?

Joe Weisenthal: Acquisition, I don't know how to describe it. Um, 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.

Tracy Aloway: It's in shambles, right?

Joe Weisenthal: 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.

Joe 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 etc. 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.

Tracy Aloway: Absolutely. So this got me thinking, what is it like to actually uh do some sort of industrial business in a place like Venezuela, and I always wanted to do more on the Venezuelan economy. I I think it's pretty interesting and 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 um.

Joe Weisenthal: Hotspot.

Tracy Aloway: Hot spot. Hotspot is a good way of putting it, which is Ukraine.

Joe Weisenthal: Right? We did a number of episodes um in 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. 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 uh 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.

Tracy Aloway: You have a word.

Joe Weisenthal: No I don't because it it's very context dependent. Right. If you were to listen to the administration he's like oh Madura 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.

Tracy Aloway: Definitely. Um, okay. So, speaking of odd situations, we have the perfect guests to talk about them.

Joe 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 um didn't think about as much.

Tracy Aloway: Yeah, the Greenland economy episode is uh is inevitably going to arrive. Okay, so we're going to be speaking with Jeff Kasin. He is the co-founder of Agris Academy and also the other co-founder Mike Rolson. So, Jeff and Mike, thank you so much for coming on. Really appreciate it.

Jeff Kasin: Thanks for having us.

Mike Rolson: Yeah, thanks for having us.

Tracy Aloway: So, first of all, why don't you give us a sort of um 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.

Jeff Kasin: Yeah, I guess I'll start out. This is Jeff Kasin. I um I did a full career in cardio 30 years and you know started at the ground up you know at the you know Baton Rouge Louisiana ports buying grain to go to export was a 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. Cargo had a very large uh oils business there actually a packaged oils business and I finished up my career um 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 uh south Latin America on the feed side all the way to Argentina. So, a typical uh highly varied uh cargo career.

Mike Rolson: Similar story with me back then when Jeff and I started, you know, Cargle intentionally threw you around to many different places. So, yeah, I had three different domestic roles in the in the early to mid '90s uh that 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 to 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. I was.

Tracy Aloway: What year are we talking about? Sorry.

Mike Rolson: This was this would have been April of 1995.

Tracy Aloway: Okay.

Mike Rolson: Yeah. So, I was uh I was young. I was single. I spoke Russian. I was uh perhaps tongue and cheek.

Tracy Aloway: You ticked all the boxes.

Mike Rolson: Expendable and uh 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 I had raised my hand already to go and 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 5 years and uh I also was with Jeff in the merger and acquisition shop uh shortly after returning and uh went into corporate ventures for a while after that and left Cargill a little earlier than Jeff did and went through a tech and and um tech oriented venture capital. Then about 3 years ago we kicked this off. Um, I hope.

Joe Weisenthal: You guys are cool with us turning this into a fivehour conversation now because I imagine there's an incredible number of stories and I already have a uh 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.

Jeff Kasin: Yeah. So, uh, because of the oils business, I was attached to that and I'd like to say that, um, it was a varied business and I ended up and I have a lot of grain experience, too. So, I ended up kind of the head of overseeing trading for all of it. And probably the the biggest statement is I think when I started the boulevard, the currency was like 1 to 800. And this is and I get my years right and I think you know three years later it was like 1 to 12,000 or something like that. We ended up we ended up in that period of super hyperinflation where the economy basically seizes up and you know you [clears throat] watch from the capability if you don't have a functioning 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 [clears throat] really changed the game on the ground in Venezuela.

Tracy Aloway: 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?

Jeff Kasin: Yeah, and keep in mind I'm currently a former employee and 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 they go out, they'll start with females, they'll uh they had the long-term salt. Salt was a big play there. Cargo 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 prochemical business was using salt. I don't actually am not an expert on the petrochemical side. And then they're in lots of food processing businesses around the world. In this case, you know, they were natural flour millers, uh, oil refineries, oil bottlers, the rice I had not seen anywhere else in the world. Um, it was actually gone by the time I got there. Uh, 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 Bungy predates me uh in there also. So they were, you know, this was a very wealthy country and 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 um yeah, that's how they got there. It was very natural flow and they had a very large investment [music] there.

Joe Weisenthal: Mike on Ukraine, you know, 1995 is still the early days of real posts 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, etc. 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 uh paid attention to this market and worked in it how they unfolded relative to say expectations.

Mike Rolson: Well, I I I almost would say you uh underestimated the optimism at the time you know in in in 95 there was a tremendous amount of optimism there. We had a very dynamic team. Quite frankly, uh even the older folks that we would find uh to help be a part of what we were doing commercially, even though they all they had known is is the system, there there were folks that that were experienced and hardworking and very excited to to to jump into uh 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 had some sort of legacy experience in agriculture uh in the Soviet Union but was able to translate that to us and uh it was an absolutely um fantastic experience back then. It was more than just a job. It was you felt it was transformational. It was uh.

Joe Weisenthal: You were changing the way business got done there. There was there was an insane amount of chaos but working in a regimented uh ethical way got you business by by uh you know in another route. So yeah we made it work. It was it was classic Cargle at the time sort of being sort of pioneering and and entrepreneurial and uh 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 more like a regular geography by the time you know the year 2000 rolled around and and when I left.

Tracy Aloway: 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 um a couple decades back now communication must have been more difficult than it is even nowadays.

Jeff Kasin: Know it was very typical I wouldn't say you know there was we had leading edge uh AS400s back in the day and so communications 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 now 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-g grocery boat cargo, you're going to load that cargo in New Orleans with all kinds of different commodities and it's going to, you know, you're going to leverage that out to get your freight cost down and create competitive advantage. And so you're coordinating um all your different trading groups in the region. And then that actually goes out on a global basis. So you 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 case as Venezuela started to become unstable. You need people that 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 knowhow. So that was kind of that big picture role that I would be filling and of course the risk management side. And then you have that very local execution side to make things happen. You got to have both.

Mike Rolson: Yeah. And the same proxy existed for us at least in our 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 uh phones through which we ran our modems and that kind of thing early on at least. Internal a whole different story. I could probably waste 45 minutes explaining uh just simple sending a fax type story and things like that in 1995 and 1996 but uh before things got a little bit better um integrated but but yeah it was it was a dichotomy between internal and external but uh manageable nonetheless.

Tracy Aloway: 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. We could easily do an hour on internal communications and the sort of like pre- email, pre-Slack, preIB, well the preIB era is very long ago, but pre uh 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. Um Jeeoff, I remember I had a um 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 uh in Venezuela and he was there when uh he by the time he was roommates he was talking about oh this guy Hugo Chavez it looks like he's going to win this is going to be bad news etc and so should have taken that 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 are starting to get serious inflation we are starting to have a more difficult time doing business or importing mach dollar denominated machinery when did that sort of sink in for the business?

Jeff Kasin: Yeah. So I I arrived, we were already to Maduro, so we were already So Chavez uh the time there had already passed and you know it it's the it's the frog in the boiling pot, right? It it starts small and then it starts to you know and then you get all these unintended consequences.

Joe Weisenthal: And you're 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 the you also have a government that is healthfully paranoid about being overthrown, right? There's a power aspect that's going on in all of 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 and, you know, as you said, the oil industry starts to deteriorate. So, that spet of dollars is dry 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 stories. One is the BTU of a paper boulevard the BTU value is worth more than it could buy.

Tracy Aloway: You could burn it.

Jeff Kasin: So you literally burn them for fuel.

Joe Weisenthal: You could burn it for fuel. That's crazy. 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 just even if you wanted to work on it. There's all kinds of these kind 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.

Tracy Aloway: 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 etc. but we know that there's significant corruption in Ukraine etc. 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 and how you have to navigate that from the perspective of a multinational.

Mike Rolson: I'll start.

Jeff Kasin: Sure. And and going back again within the uh the perspective of the mid 90s there there were two impediments and and I use the word impediment you know not not that it impeded us but it it it did create a headwind for shall we say the ease of doing business and the scale of doing business.

Mike Rolson: Yeah. So, so, uh, 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 obelist 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 stateowned port system. So most of the infrastructure and there were gatekeepers at various stages that could easily be u catalyzed shall we say uh to get grain out the door at very reasonable numbers and trade at at at at large scale. And I would uh I could name names but I you know there there's plenty of uh some of the global traders that don't have to apply to to the US u rule rulesbased 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 um some of the infrastructure that we built on the Danube River system that it's very lumpy. It's trans shipment through cranes and and evacuation systems and things like that as opposed to a big, you know, highcale elevator. Those are some of the things today that are getting grain out of the country because some of the main elevators have been uh destroyed or damaged in some way. So that was our biggest problem. You know, uh it you could get around it and quite frankly it was more rewarding doing it that way because we saw our impact on the a sector. But uh that was that was sort of the big picture reality at the time when I first got there.

Jeff Kasin: I think in my case it is comforting as operating is to know you don't have to pay those type of bribes or facilitating payments. The company had a did a very good job of instilling that everybody who joined trained on it yearly and and quite frankly backed it up right if you didn't make your numbers because you would have had to paid a 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 Fritole or one of that and you're buying raw materials. So you have a plant in Venezuela.

Tracy Aloway: Okay.

Jeff Kasin: You want to make sure that you have food safe product, US grade, and you know the standards, right? Food safety. You want to actually, it actually draws business to you, right?

Tracy Aloway: The brand value of American food.

Jeff Kasin: 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? That things like that that the way you can do business. So uh at that time let's call them western companies they're listed now today more modern companies they like to go to some of these early markets together and uh because you they knew that they had a 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 you know I'm going to tip a hat off to my former employee, they were very good about how that operated 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 uh helps out in these environments because you you know your the customers can count on you and in food super important right because if you screw that up you can kill somebody and um or tarnish the customer's right if something gets through this that's the same way it is in the US actually but not with the maybe the same criticality when you're working in a remote location around the world.

Tracy Aloway: 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.

Jeff Kasin: We we 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 Boulevard, you have to transact in Boulevard. Now, we didn't have Tether or Bitcoin at this point, right? So, the world's changing in an interesting way. Um, you have to follow that. I mean, you you know, you don't want to, I don't know, poke the bear, right? And then you have to have people that become experts in how whatever government you're working with runs and we do and that's how we but this was a very common still is common to operate in some of these places where.

Joe Weisenthal: You know you know places that have cocoa right you know some of the African countries there Zimbabwe right South Africa um you still have this situation you have to become there is a competitive advantage in becoming experts at working in difficult places.

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

Jeff Kasin: Oh, absolutely. All the time. Right. And there were laws on theoretically how much you could make and how the counting 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 you had to have an escapegoat effectively. And you know at some point you just know that you can't import at uh price X and sell it for X minus you know a bunch and you you'll just bleed out. And quite frankly at some point in several geographies we get a situation where corporation says we will put no more dollars in the country and we were there and I can still remember that. So if we wanted 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 because 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 the team down there was desperately trying to because the other thing we needed beyond just raw materials, we needed spare parts. And this maybe lies to your question about what's the situation there. You know, if you need to buy some electrical equipment from Seammens, they're not going to want boulevards.

Joe Weisenthal: And they want euros or dollars.

Jeff Kasin: 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 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 switch to how do we originate dollars? So you have, you know, a couple people that are just expert in government and maybe like camp out at government offices for long periods of time trying to figure out 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 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.

Joe Weisenthal: I wasn't expecting the conversation to go in this but for either one of you and Jeff you mentioned the non 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 stable coins or something truly decentralized like Bitcoin, are people seriously either implementing or thinking about how some of these new uh financial technologies can solve pain points within the global egg trade.

Mike Rolson: Mike, this is your specialty.

Jeff Kasin: Yeah.

Mike Rolson: Well, again, I I can't speak to the specificity maybe uh country by country, but certainly the 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 and maybe the quality of their bank, the their access to capital, uh their access to to foreign currency to um to upgrade whatever it is. Absolutely. the tethers of the world and things like that are going to fundamentally change the access to to to that sort of thing where where when you compare it to the way it was before for sure. And I and I will maybe add a little half answer to to what you threw out there too. There's a lot of great stories uh for folks looking for um something to 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, you know, tap into a small hydro plant at maybe a family's uh place out in the woods somewhere and and and mine Bitcoin, put it on a wallet and had it as their escape valve in case they needed it. And sure enough, you there was a night where they trapesed through the jungle and went to another country and had it on their wallet and and uh started another life. So yeah, that there were some very interesting early pioneering Bitcoin stories around the what the Bolivar [music] forced folks to do uh early on.

Joe Weisenthal: 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 um especially if you were working in certain businesses that the government was targeting Did you experience that at Cargill as well? This sort of brain drain. It.

Jeff Kasin: It happened all the time. First, I want to set the scene, right? We have a um at the time we had an office in Caracus. Very nice, right? A lot of employees there, not just kind of because we have we had a brand business, right? We had people that were, you know, label designers and I mean it was the fullon think of it I don't know more of maybe the Proctor and G the retail side of things. So big office, nice um we had, you know, satellite communications there. There was no Starlink yet. Um 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 gated community, more likely an apartment complex. 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 um and they leave. Um and then of course in our case we had 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? Because 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? The nobody knows, you know, obviously the prochemical industry, right? you can go get reemployed around the world, you know, if you're a, you know, a pro engineer, 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 know, 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, 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, "What are you going to do?" And he goes, "I don't know, but I'm not going to be here anymore." you know, I mailed my I mailed my big screen TV and a couple things DHL 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 refine 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're very I my experience working with Venezuelans was it was fantastic. They had a good education system, smart, business savvy, and um we gladly remployed them around the world.

Tracy Aloway: 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 ex 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 reenter that business.

Jeff Kasin: Look, I am not a Venezuelan expert. Our business is actually in education and risk management around supply chains. Um and we do a lot of work with US growers. So this was a bit of an accidental experience to uh to from from what happened to to bring me here today. Um we do know we were struggling to keep the plants maintained. These are but there 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 that 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.

Joe Weisenthal: Okay.

Jeff Kasin: That you don't expect there's you walk into a plant that you shut down 5 years ago that there'll be anything there um you have to defend it a couple 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 um so you can't expect that there's unless the whatever it is is honey. Um, you can't expect much. And I know that there they were started 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 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, um 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 if 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 both of ours and create 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 an 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.

Tracy Aloway: 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 uh you know a truckload of something that could be valuable um on the road they probably seized on that as well.

Jeff Kasin: Yeah. I mean it doesn't matter. You know Venezuela was you know we had um security experts that work 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 and in Mexico, you know, we were losing a lot of trucks. Sometimes we'd get the trucks back. Sometimes we lost the cargo and the trucks.

Joe Weisenthal: 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 h 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 all these drags on the economy when you get into these situations, right? It's just dragging the entire country down in hyperinflation. I think if you studied in, you know, Mike and I both have some economics degrees. Um, there's all these dragging taxes on people, you know, 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 barb 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, you know, in, you know, boost to the economy. Mike and I are, you know, watching things in Argentina. Uh, I love going there. It's a beautiful place and highly recommend. Um, but, you know, let's see how that goes because it feels like the the country is starting to lose some of those shackles.

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

Joe Weisenthal: To me specifically. Okay.

Tracy Aloway: Yeah. You're not going to like it. I've been watching the show Land Man 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 is one of the plot lines very early on is the is the phenomenon of both trucks that disappear because the cartels still 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 etc. So, uh, that the idea what, uh, what Jeff was saying about the truck suddenly coming back is something that, um, I'm I'm familiar with because I'm a viewer of TV.

Joe Weisenthal: Stood up by the television. I'm going to steal myself for all the land.

Tracy Aloway: Yeah, you're going to get a lot, especially when we do oil episodes.

Joe Weisenthal: Yeah.

Tracy Aloway: Um, Mike, uh, talk to us the, uh, give us sort of your sense of Ukraine now and versus before the war. And obviously there's still weed flowing out, but we've talked about the impairments, etc. what is the sort of scale of the impairment and the damage etc 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 uh 2021.

Mike Rolson: 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. U whether it be the halommore and you know postsviet 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 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 the two biggest changes 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 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 or overseeing the grain elevator operations is is really really hard. And and then as I alluded to earlier, the some of the 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. But they're limping along. And you know, I I I 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'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.

Tracy Aloway: Just real quickly, so 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?

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

Tracy Aloway: 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?

Jeff Kasin: 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 trust. Security is going to be your number one part of it and start, you know, start with a small uh business, right? To learn how things actually work. We used to start with feed mills. They're rel you can put up a Kaiser, 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 up on first day that, oh, you know, you weren't you you're supposed to pay a bribe to the meat inspector or something like that. 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 uh make it uh make those big uh hard capital asset investments.

Mike Rolson: Yeah, and Ukraine has slightly different context. I think the blueprint is there is if you look at the the the I would kind of describe the glory days of of of the grain business in the late uh 90s when the infrastructure really got built back back up in in a way that served the global markets with a lot of value added processing. Tremendous amount of investment that went through the thes you know probably 05 068 right around there. So the blueprint is there. I I just think it's going to take, you know, resilient people uh patients uh attempting to maintain your teams uh there within the reality of of of the things that are going to be personal decisions for them, for their safety, for their family, for [music] whatever. Um you're just going to have to go with that flow for the foreseeable future and see how this all plays out.

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

Jeff Kasin: Yeah, thanks for having us on. Thank you.

Tracy Aloway: Joe, that was super interesting 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 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.

Joe Weisenthal: Yeah, 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 what whatever and they're like, "Oh, we have a shipment here at this time." And they can more or less expect that that entity will do that, right? 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 more comfortable in the office than back home. That like the the 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 crossborder pockets but that will be the same from one office to another regardless of what country they're operating in.

Tracy Aloway: 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 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. I basically bartering, right? Yeah, it does sound like it basically comes down to borrow 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 on the country.

Joe Weisenthal: Although much of it's left in 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 refinery or whatever and that's sold by a European multinational and you need 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 solve for. They want to have every.

Tracy Aloway: Aspect of the entire supply chain inhouse such that there is no possibility of them not being able to access one part and grinding a whole industry to a halt.

Joe Weisenthal: Yeah. All right. Um we could go on but shall we leave it there? Let's leave it there.

Tracy Aloway: This has been another episode of the Odd Thoughts podcast. I'm Tracy Aloway. You can follow me at Tracy Aloway.

Joe Weisenthal: And I'm Joe Weisenthal. You can follow me at the stalwart. Follow our guests Jeff and Mike and their work at Agress Academy at agrisacademy. Follow our producers Carmen Rodriguez at Carmen Armano Bennett at Dashbot and Kalebrooks at Kalebrooks. And for more OddLots content, go to bloomberg.com/odlotss with a daily newsletter and all of our episodes. And you can chat about all of these topics 247 in our Discord, discord.gg/odlotss.

Tracy Aloway: And if you enjoy OddLots, if you like it when we talk about what it was [music] 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, [music] you can listen to all of our episodes absolutely adree. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. [music] Thanks for listening.