Escape Velocity: five superpowers unlocked

Prime Future 292: Strategy, capital, and innovation in animal protein

In I like big ag and I cannot lie, we looked at three formidable examples of producers who scaled their production agriculture enterprise far beyond their industry peers, hitting the ag version of what the tech world calls “Escape Velocity.”

This week, let’s look at five specific ways Escape Velocity changes the rules of the game entirely and increases the potential for longevity.

The what-textbook-did-you-pull-that-definition-from obvious benefit of scale is that it enables lower fixed costs per unit, resulting in a higher per-unit margin: economies of scale.

In a commodity business, economies of scale drive the bus. You can love that fact about capitalism and commodity markets, or you can hate it — but either way, it’s true. And regardless of how you feel about at-scale enterprises, those who find ways to scale tend to expand margin, which is the name of the game in a low-margin business like production agriculture. (No news flash here.)

But let’s look at five underrated flywheeling superpowers that are unlocked by those doggone economies of scale. And yes, #1 is central to how I view all things strategy, capital and innovation in animal protein…