(upbeat music) (upbeat music continues) - Welcome to "A Shot of Ag."

I'm your host, Rob Sharkey.

Hey, what if you own a farm, but you're not quite sure what to do with it?

Well, our guest today is gonna give you some good ideas.

Today, we're talking with Chris Baumann.

How you doing, Chris?

- I'm doing well, thank you.

- Yeah, where are you from?

- I'm from Morton, Illinois.

- From Morton.

That's where you grew up?

- Mm-hmm.

Yep.

- Okay.

It's big in pumpkins.

- It's the pumpkin capital of the world.

Self-proclaimed, I'm sure.

- So they say.

So they say.

Yeah.

- Yeah, so they say.

Yeah.

- Where do you live now, then?

- I live in Morton.

- Oh, so you're raised there and you still live there?

- To this day.

- Okay.

- Yes.

- You have got a company called CommonGround, which we're gonna get into.

But let's go back to little Chris, okay?

- Little Chris.

- Little Chris growing up.

What was your first business before CommonGround?

- My first business was actually a mowing company at the age of 11.

- Really?

- Yeah.

- Riders or pushers?

- Both.

Both.

Yeah, a lot of grass.

A lot of grass cut.

- There is a lot of grass in this world.

- It was a lot.

I don't cut my grass now, just for that very reason.

I said, "You know, if I ever hit it big time, I'm not cutting my own grass."

- Now, when you were in the lawn business, is it the grass cutting that is important, or is it the trimming?

- It's both.

I think they go hand in hand.

- Okay.

Did you do the stripes?

- No.

The stripes weren't in back in the day.

- Okay.

So after your illustrious landscaping business, what do you have after that?

- I actually went into landscaping in high school after that.

My dad told me, "You're 16, you can drive, so it's time to go get a real job."

So I did that.

And I wound up going to Illinois State University, getting a degree in construction management.

- Redbirds.

- I like that.

Go Redbirds.

And after graduating college, I got into construction management and real estate and started buying mechanical companies.

It's kind of a weird transition.

- What do you mean a mechanical company?

- Like heating and air, plumbing, mechanical.

- Oh, HVAC.

- Yeah, kind of ties in with the construction side of things.

- You did that, and you were successful at that.

- Yeah, fairly.

- Yeah.

Okay, so just tell me the story about buying this farm.

- So through my success, my hobbies: hunting, fishing, outdoors.

Absolutely love it.

Get the wife, get the kids out of town.

Get them off the iPads.

So through my success, I was very fortunate in 2013 to purchase my first actual hobby farm.

- This is a huge deal.

Big investment.

- It was a big investment.

Lifelong dream of mine.

I told my wife from the week we met that that was a dream of mine, was to own my own piece of ground.

And achieved that goal at a young age.

And upon closing, I went out there and realized that I've got my, you know, hobby farm.

And now I've got some tillable ground that I never really gave any thought to.

- So tillable ground that could actually be farmed.

- Yeah, production, row crop, corn, soybeans.

There was roughly about 50 acres out of the 160 acres I purchased.

- Okay.

- Yep.

So didn't really know what to do with it.

- Yeah, 'cause you're not a farmer.

- I am not a farmer.

I have no ag background at that time.

And wound up talking to one of the neighbors, and he said, "Hey, the guy you got farming your ground currently, he's okay, but he's not that good.

I'd talk to the other guy next door."

And I said, "Okay, you clearly don't care for-" - What's the beef there?

- I never got an answer.

- Gotta be something.

- I'll be honest, I didn't ask.

- Probably went back to a woman in high school.

- Could be.

Could be.

- Yeah, pretty much.

- I'm not one to prognosticate, but.

- I don't even know what that means.

- Imagine.

- Moving on.

(Chris laughs) - So I went over to the neighbor, I put my business card in his mailbox and said, "Hey, talk to me about farming."

And we met, we talked, and we agreed to do a 50/50.

- Yeah, so sharecropping.

- Sharecropping.

I became a sharecropper.

And I guess that was the right thing to do at the time.

- Well, and for people that don't know, basically, you take all the expenses, like the seed, the chemicals, the fertilizer, and you guys split those costs.

So he's getting a seed bill.

He's sending you half of it.

You write him a check.

And then at the end, he harvests it.

So he does all the work with his equipment.

And when he harvests it, then you guys split the grain.

- Split the grain.

Yes.

So I get my share of the crop at the end of the year.

And we did that for a few years and got along.

Me being an entrepreneur and had some spare time, I started running the math and figuring out, okay, how much is this farm returning?

What am I getting on my asset?

- You're a numbers guy.

- I can be.

Yeah.

- Well, I mean, there's three types of people in this world.

Those people that can do math and those that don't.

- I would say I'm a numbers guy.

Yes.

I can do some math.

- I would say you're a numbers guy 'cause obviously humor is not your strong point.

- It is not.

Not, I would agree.

- Okay, so you- - We're in the same boat.

(Chris laughs) - So we have a farm.

Now, I think a lot of landowners get to a position where it's a little tedious.

Farmers like sharecropping because it's the fairest to them.

Because when things are good, it's good for everybody.

When things are bad, they share it with you.

But a lot of times it gets tedious because every single bill they have to send you.

Was it split right?

Especially if, like, the ground is owned by three or four people, then it gets to be a mess.

So you are in that situation, and you're thinking, "Let's figure something out better."

- And for me, it was more or less like, yeah, the numbers are a little less than what I was expecting, but it was more of getting the seed bills, getting the fertilizer bills, you know, figuring everything out at the end of the year to see where I stood.

And finally, I just called them up and I said, "Look, you know, I don't need to be a 50/50 partner in a business that I don't really know a whole lot about.

I want a cash rental agreement.

Let's do a cash rental agreement, and that way I know what I'm getting every year and I'm not getting bills.

Let's set it and forget it."

- So basically, he's paying you set amount per acre and then- - I get that rain or shine.

- He takes all the expenses, and he takes all the crop.

- And all the risk.

Yeah.

Yeah, absolutely.

- There's benefits to both.

- There are.

Yes, I would agree.

- Okay.

So now you're in the cash rent business.

- I am not in the cash rent business.

- You're trying.

- We could not agree on a cash rental rate.

- [Rob] Oh.

- And that's what led me on this journey, was, you know, I said, "Let's do a cash rental agreement."

And he said, "Okay, well, I can pay you this much in rent."

Me being a numbers guy, said, "Well, that's about what I'm making now."

And, you know, having a background in real estate and construction and that whole thing, I had some rental properties at the time, and I still do.

And I just found it odd that a tenant was telling me what they can pay in rent, where in a rent house I set the price, the tenant doesn't.

So that set me on a little bit of a journey to do some price discovery, to say, "Hey, I need to learn more about what I have and what it's worth so I can educate myself."

And found the data available was very fragmented, hard to come by.

No real good sources to say, "This ground in this area should be worth this."

- No.

- There's not.

- No.

- So I found that part very tedious.

But I GPS my farm, figured out I had a couple more acres than I thought I had.

And I pulled soil samples, figured out what soil I was dealing with, and just did everything I could to educate myself.

And then I did the next-best thing.

After compiling the data, I went to some of my buddies that farm, I went to school with, and I said, "Here's some data.

What would you pay in rent?"

And I got different numbers across the board of varying degree.

And that's when it dawned on me that farming is a business.

Every farming operation is a different size, a different overhead structure, a different risk tolerance.

And I saw an opportunity for landowners like myself, who are either uneducated, uninformed, to really give them a resource where they can quickly go and find the value of their ground, which we have on CommonGround.

It's called a cash rentstament.

Very quickly.

- What?

- A cash rentstament.

- Did you just make that up?

- Mm-mm.

- Rentstament.

Rentstament.

- Rentstament.

- I've never heard of that word before.

- It's supposed to be hard to say.

- Because you made it up.

(laughs) - Actually, Brad, my partner, made it up.

- Well, okay, somebody made it up.

- Somebody made it up.

Well, like, it's Zestimate.

You know, it's catchy.

- Yeah, Brad, your partner, he's the one with a sense of humor.

- Yes, yes.

I would agree.

That's why we make a good team.

(laughs) - You and Brad, I mean, you guys, you have this company, CommonGround.

Okay.

So this is built out of the situation you had.

So explain how this works.

- So this works very, very simple.

- Okay, I like that.

Yeah.

- If you're a landowner, we use the KISS method.

Keep it simple, stupid.

If you're- - That's funny.

- Think of how much you're learning today.

- Learning should be going both ways.

- I thought I wasn't funny.

- Well, you didn't come up with it.

All right, focus.

(laughs) - I'm turning the tide.

So as a landowner, my struggle was price discovery.

So the cash rentstament, you quickly go zoom in on a map, click your parcel, and we auto segment the tillable ground.

And then it tells you, hey, based off of this location, this soil type, the weather, this county data, it's drilled down to the county level, here's what an expected rent range would be.

And you can compare that to what you're currently getting.

If you want to utilize the services further, it's 100% free to educate yourself.

And then you can actually list your farm on the site.

And then we market it to every farmer in our database and every grower within a 60-mile radius.

And we allow farmers to go through a bidding process to bid on leasing that ground.

So.

- The mapping shouldn't be undersold.

I let a farm go one time because it was 40 acres-ish and there was eight acres that wasn't there.

And I know this because I, with my GPS, when I planted it, I'm like, and I went to the guy, and boy, he wasn't happy.

- Really?

- He thought I was trying to cheat him.

I'm like, I'm showing him the stuff.

- Here's the GPS.

- But it's just what it was always done.

I don't know if the trees have moved in or whatever over the 50 years that he's owned it, but- - We see that.

We see that.

- So that's something that is extremely, I would say, valuable to both sides, so you don't have arguments like I did with that rather rude gentleman.

Yeah.

Okay.

So you have ground, you can put it up on here.

And then, what, do you have farmers just bid on it?

- Yes, so we market it to the farmers in the area.

If they're interested, they can jump on the site, they can view the farm, the soil maps.

They can take tours, if they request.

And they get all the information that they need, and then they can start bidding.

And it is a bidding process.

The landowner sets the timeframe.

So they could set a 30-day window for bids, a 40-day window, 45 day.

And then at the end, it's a soft close auction.

So if there's the guy that's sitting there with one second left and puts in his bid, then we add time to the clock to give everybody- - That guy.

- That guy.

- The eBay guy.

- The eBay guy.

So it's a soft close.

And what that does is allows everybody to get in their best and highest bid.

And once that closes, it's over.

And then the landowner has a copy and a record of all these bids.

Who's bid, their farmer profile.

Every farmer on the site fills out a resume or a farmer profile as we call it.

And then they can start to sift through all these bidders, and then they select whichever one they want.

- Can I use a fake photo on my farmer profile?

- I would suggest you do.

You told me to step up my game on the comedy side of things.

- Still waiting.

(Chris and Rob laugh) All right.

So here's the thing.

There are farmers that will bid high and then treat your ground like crud.

- Absolutely.

- Yeah.

Do you have the ability, do you have to take the highest bid?

- You do not have to take the highest bid.

And I would say probably 80% of the time, high bid does not win.

- [Rob] Really?

- Mm-hmm.

- Okay.

- And we leave it up to the landowner.

You know, some landowners are more involved than others.

And we will help as little or as much as that landowner requests.

We have landowners that say, "Hey, I've narrowed it down to these three guys.

Can you help me gather up some letters of, you know, solvency from financial institutions?

Can you help me get some references or letters of recommendation?"

- Well, as a farmer, how am I supposed to write a rubber check, then?

- You can't.

The days of that are waning.

- I know.

Remember you used to have a, you'd write a check and then you knew you had a day to get it into the bank?

Can't do that anymore.

- I still write checks for everything.

- I know, but you don't have that day, right?

It's like, if they go cash a check, it's like, auto.

- Immediate.

- Yeah, it's not so fun anymore.

- So yeah.

I mean, we've had some people say, "Hey, I want this guy to get it.

I know he's 20 bucks cheaper, but he's in his mid-30s, and I want to give a young farmer a shot.

And if he does good, he can be on the ground for the next 30 years."

- It's his ground or her ground.

They can do what they want of it.

I like that part of it.

- We empower the landowner to choose whoever they want.

- But if you do have that couple that has, I say, like, they inherited ground, right, and they've been out of farming, they've been living in town, they really don't know the game, then this would be right up their alley.

- Absolutely.

I had a guy from Mexico call me.

- Like the country?

- It was the country.

- Ah.

- He was sitting at his place.

He lived in Mexico.

He inherited ground, and it was in South Dakota and Minnesota.

And he actually doubled his rent through the site.

- Nice.

- Because he said, "I don't know what I'm doing.

I inherited it.

I'm getting this."

And I said, "Well, you should be getting twice as much."

- And a lot of times these older, you know, when you have the folks that are older and have had that tenant forever, it's time to pony up.

- Well, it's just having a discussion about what's fair for everybody.

I mean, we're a dual-sided marketplace.

The farmer has to be profitable, but the landowner, you know, has rising costs as well of carrying this ground, and we wanna see them get a fair shake.

And, you know, we see a lot of instances where landowners come to our platform, get the estimate of what their ground should be valued, and they say, "Well, I really like my farmer."

I'm like, "Great, he's awesome.

I'm sure you do."

But put it out on the platform, let him know what you're doing, and give him the opportunity to bid.

We see it all the time.

A lot of times that farmer continues to farm that ground.

It just took the pain point and the conversation out of it to say- - Yeah, awkward.

- Here's where the market is.

The farmer might be $20 less, $40 less.

We had one that was $100 less.

And he stayed on the ground 'cause they liked him.

But it just kind of says, "Hey, we're just feeling this out and seeing what the market's gonna do.

We want you to continue, so as long as you're close, throw your hat in the ring."

- It's like you're taking a game of chess and making it into checkers.

- Segue.

I like it.

- What is this?

- Well, this is a set of chess pieces.

Well, not a set, two of them.

So you've got a knight and a king.

Those are the cheap plastic ones.

You can pick those up and touch them.

- Well, what's the story behind them?

- So, you know, I wanted to bring something, speaks a little bit about me as a person.

But it's a little unknown fact that I am an avid chess player.

I love to play chess.

- I'm actually a grandmaster.

- Really?

I didn't think so.

So I brought these because I grew up playing chess.

My dad taught me how to play chess.

And this was his set, the little plastic one from when he was about six years old.

So 1954.

- Yeah, kind of the standard.

- Yes.

Cheap.

- Cheaper set.

- Yeah, so he actually worked for Caterpillar up the road for 42 years, and he wound up traveling all around the world.

And he spent a lot of time in South America.

And one day he was going into a mine in Peru, and he found this guy that did stone carving.

So the next time he was down in Peru, he took his childhood set and handed it to the guy and said, "Can you carve this?"

- You know what?

I thought this was the original one, and I thought you were gonna tell a story of being like a 3D printer.

- No.

Those are hand carved based off of that.

- That's unreal.

- So he took that set down that he got as a six-year-old in the early '50s, and he said, "Can you carve this set?"

And he said, "I can do it.

You're gonna have to give me some time."

He said, "Well, I want one for myself and one for each of my three boys."

And he said, "Well, give me about a month and a half to do it."

- [Rob] For all of them?

- For all of them.

And so he had the white stone, but he had to jump on a bus and travel two hours to get the black stone for the other stuff.

- Oh, crazy.

- So at the end of a month and a half, my dad was back in Peru with that carver, and he picked up four of these hand-carved sets for $125 a piece.

- Extremely detailed.

- That's why I brought them.

- They look a lot better than the original ones.

(laughs) - Right.

- Well, that's really cool.

- 125 bucks.

So my father and myself and two brothers- - I feel like they're gonna fall down now.

Now that I know what they mean, let's move them back a little bit.

- So yeah, pretty cool.

- Yeah, it's a knight too.

- Could you imagine hand carving every, and the board, hand carving for 125 bucks?

- Dude, I couldn't even hand carve a ham.

I couldn't imagine doing this.

Good night.

- So yeah, that's why I brought those.

And I actually teach my son to play chess on these plastic ones so these don't get broke.

- I do not blame you.

- Yeah.

- Let's go back to CommonGround.

You have the dating, the Tinder site you were talking about.

- Yes.

- You guys also have another product.

Tell me about the insurance.

- So we, through this journey, we had a common pain point, a common theme.

And, you know, Brad and I always go about this with dual-sided marketplace in mind.

We need to drive value for both the farmer and the landowner.

Yeah, We're increasing landowner ROI.

Yes, we're giving farmers opportunities to rent ground they otherwise never would've heard of.

But we kept seeing the same reoccurring theme with these higher rental rates and longer-term leases.

And, you know, it's like catching a falling knife at that point.

If you're paying, you know, extremely high rent and commodity prices go down, you can get upside down pretty quick.

- Which is where we're at right now.

- Current market conditions.

Yeah.

So luckily, 14, well, about 16 months ago, we met with Hudson Crop.

They're based out of Kansas City, Missouri area, and they're one of the AIPs for federal crop insurance.

- [Rob] AIPs.

- Approved insurance provider- - Oh, okay.

- for federal crop insurance.

- [Rob] They're accredited.

- Yeah, accredited.

Yeah, approved/accredited.

Yes.

So met with them, had dinner.

- I love interviewing people that don't really like me that much.

(laughs) - He's up next.

(Rob and Chris laugh) So when you're selling federal crop insurance, it's the same product for everybody.

It's the same price, the same product.

Everybody's got the same trick in the bag.

Well, AIPs are allowed to have private products that they create on their own.

So through this theme and pain point that we saw happening, we worked with Hudson Crop to create the CLIP, which is Cash Lease Insurance Protection.

And basically, it is an insurance policy you can buy on your rented ground.

So it's lease specific.

You can elect the coverage.

And that way if commodity prices drop, you have locked in insurance at a higher price.

- Because that's always a fear, right?

I mean, I want to be aggressive, so I go out and I bid high.

But then it's like, do I sell now?

Because if the prices go down, I'm gonna be dinked on that.

But now I have this ability to actually ensure that.

- Correct.

So if you went out and got aggressive, and you say, "Hey, I'm paying $500 for this ground," which is aggressive.

And it's aggressive.

- It's too high.

Anyway.

- Especially right now.

- Continue.

- Let's say you did that last year when corn was at $6.

- Which there's been times where it might've been considered okay.

- And so you're locked in for $500.

So now you're looking at it, saying, "Okay, where is my breakeven with the given prices?"

Maybe that's $300 rent.

So you can watch the markets, and when prices start to tick up, you can buy a insurance policy for maybe $100 or $200 of that rental payment.

So at harvest time, if prices are down, that can trigger that insurance policy to cover that rent to make sure you're in good standing with your landlord, able to make that payment.

- 300 is still too much.

- Hey.

- I am a farmer, right?

- Anything is too much.

- That's around 100 bucks.

- Sounds perfect.

- (laughs) This is why you have your app, right?

- That is correct.

This is for this conversation.

Exactly.

- It almost sounds complex, but when you explain, it's pretty simple.

- It's very simple.

It's very simple.

We have people on staff.

We actually have CommonGround Insurance Group.

So we started an insurance company.

We've got several agents that are great.

They explain it.

It's very simple.

It's all about timing and watching the markets and buying the insurance at the right time.

- Okay.

Do you like being an entrepreneur?

- I absolutely love it and hate it both at the same time.

I would much rather be a farmer.

- I mean, oh, good lord.

So this CommonGround, is this your full-time gig now?

- Yeah, pretty much.

Yep.

- [Rob] Yeah, so you're going all in.

- Yes, I have gone all in with this, and it's been a journey.

But it's very rewarding when you talk with landowners that you change their lives.

When they're on a fixed income and they went from $200 rent to 375, and you've added that to their, you know, annual income, it's just, it's awesome.

And when you see farmers pick up ground and they're ecstatic.

I mean, we've had one younger farmer pick up 500 acres, and he's able to- - Wow.

- Yeah.

So it's stories like that that, you know, you're adding value, you're being a good steward.

You're really helping find that price equilibrium and give opportunities to everybody out there.

- That's why I like it as a farmer.

'Cause at least I can have a chance at it.

If I get outbid, or if they're gonna do something, shovel her driveway or something like that, fine.

But at least I had a shot at it.

- And when I met with the farmers before this, you know, even got kicked off, I said, "What do you think of this idea?"

And they're like, "Actually, I kind of like it."

Because nothing aggravates them more than finding out somebody got a piece of ground rented without them getting a shot at it.

And we know the cost of ground, the cost of capital.

And as a farmer wanting to grow your operation, leasing ground is a great way to do it.

So you'd wanna know about every opportunity that's out there.

- Let's say I own some ground and I want to check this out.

Where do I go?

- commonground.io.

- [Rob] commonground.io.

- Yes.

- I imagine commonground.com is locked up.

- It was cashy.

- Was it?

- Yeah.

I don't remember the number.

- A million bucks.

- No, it wasn't that.

It's like a couple hundred thousand or something.

- Whew.

Get those names early, huh?

- Yes.

So we opted for the commonground.io.

- Okay.

Any social media?

- You can join the CommonGround community.

Just type in CommonGround on Facebook.

And I'm sure there's Instagram out there, but I'm not on it.

- Is CommonGround on there?

On Instagram?

- Oh, I'm sure.

Yeah.

Yeah.

I'm not.

- [Rob] You might wanna find that out.

- It is.

It is.

- Okay.

All right.

'Cause you're CommonGround Chris.

- [Chris] I am CommonGround Chris.

- Yeah.

I like your videos.

I like your ideas.

As a farmer, of course, I'm wary about staying competitive and having my cash rents.

But yeah.

- And to that point, if you're a farmer, all our auction results are backfed into that cash rentstament.

So when you go on, you can go check what ground, and when you get the cash rentstament, that's pretty much what it's going for in the area.

So you know what it takes to be competitive.

So maybe you head that off at the pass.

- Okay.

I like it.

I'm gonna try it out.

I'm gonna get on it for sure.

Chris Baumann from Morton, Illinois, CommonGround.

Thank you for coming.

Really appreciate it.

- Thank you for having me.

- Yeah, it's very interesting to see your journey into agriculture.

- It's been fun.

- I wish you nothing but success.

- Thank you.

- Chris, thank you.

Everybody else, we'll catch you next week.

(dramatic music)