From the towers of Wall Street to the dairy farms of New Jersey, a guided tour of the financialization of food.
By Elizabeth Rush
Just off of Country Road 518 in Hopewell, New Jersey, sits Double Brook Farm. It’s run by a self-exiled New Yorker but it’s not one of those now-standard upstart farms, with roving bands of earnest college kids tending rocket and a hearty couple of ex-Brooklynites overseeing the whole grass-fed operation. Double Brook’s turn-of-the-century barn, its grazing cattle, and its hundreds of Rhode Island Reds clucking and strutting about all belong to Jon McConaughy, a 46-year-old with an all-American face, a football player’s build, and a beautiful wife. Last year, McConaughy exchanged a two-decade-long career as a commodities trader on Wall Street for these two hundred acres.
Double Brook, a small farm specializing in grass-fed meat, free-range poultry and sun-dried vegetables, symbolizes one of the most unexpected turns the American economy has taken in recent years. For decades, banks have shied away from granting loans to farmers because, like restaurants, they are considered risky investments. But the tides might be turning as the price of nearly every commodity on the face of the earth is on the rise.
“Farming is the new ‘good investment,’” says McConaughy, who grew up in the dairy country of rural New Jersey, only five miles from Double Brook. “I always knew I was going to return to the farm. But I am not the only banker-turned-farmer—it’s a trend.”
Last month I met Dean Carlson, another member of the growing sect of Wall Streeters gone AWOL, at a TEDx talk in Phoenixville, Penn. Carlson’s seventeen-minute presentation was one of the most powerful I have ever witnessed. In it, he explained the Rule of Seventy, a method commonly used in finance to estimate the time it will take for an investment to double. Divide seventy by the projected annual growth rate and you get the number of years it will take for the growing thing to be twice as big. An economy with a ten percent growth rate, for instance, will double in seven years’ time. As with any exponential function, the base variable (the economy in this case,) must grow bigger and bigger at an ever-increasing rate. Two hundred years down the line, if that same economy keeps growing at ten percent per year, it will be five hundred times as big as it is today, and two hundred and seven years down the line it will be a thousand times its original size. When Carlson applied the Rule of Seventy to food production he became scared, if not paralyzed, with fear.
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