# IIF - Trading Platform for Agricultural Assets



## DamienR (3 October 2022)

I am new to this forum but have been an active US commodity trader for over the past 12 years. I am seeking information on whether anyone has heard of and used this new Agricultural Exchange called IIF. It stands for "Invest Inya Farmer" . According to their website, iif.today, a farmer sells his products like cattle, oysters, bees, rice, and even apricots on the IIF platform, and mum and dad investors can buy any small amount that suits their risk profile, like a cow or 20 doz oysters or 2 beehives. The investment cycle is normally 6-12 months. A mate of mine has been using the app for some time now, and the annualised returns have been an impressive 20%. He said the most important strategy is to have diversity in your portfolio, which will minimize risk. It sounds interesting and I wonder if anyone is familiar with this platform.


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## divs4ever (3 October 2022)

welcome to ASF , 

 nope , i hadn't heard about it until your post 

 however currently i invest in ASX listed stocks ( that include some agricultural companies ) and have some fruit and vege plants in the backyard


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## InsvestoBoy (3 October 2022)

DamienR said:


> I am new to this forum but have been an active US commodity trader for over the past 12 years. I am seeking information on whether anyone has heard of and used this new Agricultural Exchange called IIF. It stands for "Invest Inya Farmer" . According to their website, iif.today, a farmer sells his products like cattle, oysters, bees, rice, and even apricots on the IIF platform, and mum and dad investors can buy any small amount that suits their risk profile, like a cow or 20 doz oysters or 2 beehives. The investment cycle is normally 6-12 months. A mate of mine has been using the app for some time now, and the annualised returns have been an impressive 20%. He said the most important strategy is to have diversity in your portfolio, which will minimize risk. It sounds interesting and I wonder if anyone is familiar with this platform.




Never heard of it, thanks for bringing it to our attention.

IIF seems to stand for Invest In Farming according to their site.

@Joe Blow do you think you'd mind updating  the title to include the acronym/name?

It seems like it's essentially forwards (see the difference vs futures here: https://www.investopedia.com/ask/answers/06/forwardsandfutures.asp) on the settlement price of the commodity (non-deliverable).

The farmer shorts their commodities to you and promises to return you the profits. You are long the settlement price which can fluctuate based on supply/demand/weather/macro conditions. You can expect to profit if the settlement price is higher than what you paid. You can expect to lose money if the settlement price is lower than what you paid.

From their FAQ


> IIF Coop will source, screen and offer share farming opportunities to its members via the IIF app. As a member, you can elect to participate in any program that you are interested in, in the volumes you desire.
> 
> Once a member selects an opportunity, the member provides the funds to the IIF Coop by way of a member contribution (debenture). IIF Coop will then purchase the items on the member’s behalf and the item will be show in the member’s Farm on the IIF app.
> 
> ...




For example, if a farmer shorts 10 boxes of avocados to you:

You might profit if there is strong demand for avocados due to economic boom
You might profit if farmers grow not enough avocados and cause undersupply
You might profit if a storm destroys other avocado crops but not your farmers
You might make a loss if economic bust reduces demand for avocados
You might make a loss if farmers grow too many avocados and cause oversupply
You might make a loss if a storm destroys your farmers avocado crop
From their FAQ


> There are risks in farming and there are no certainties in the outcomes. The harvest yield, price and timing will be determined by an array of factors, especially weather and market conditions. There is a chance your farm product will be negatively impacted and not reach potential. In this case you may suffer a financial loss on that farm item.




Some things I like about it:

Get exposure to Aussie Ag commodities which aren't really available on any easily accessible markets
It's essentially a unlevered forward, so no leverage risks
The farmer handles the product sale
There's no concern about making a mistake and ending up needing to take delivery of 400 bushels of wheat or something
Some things I don't like about it:

Physical markets are not transparently priced, how do you know the farmer is getting the best price for his avocados or trees or whatever. They've already sold the risk to you, what's the incentive for them to get the best price?
It's not a two way market, you are entirely reliant on IIF pricing each deal with an appropriate risk/reward ratio
This is really the biggest issue.
You hopefully get paid to warehouse the farmers forward risk. How do you know the price is right? You don't!

In each deal you are making concurrent bets on individual commodity prices, market conditions, macro conditions, etc
Even if you diversify you are still making an aggregate bet on commodity pricing and macro conditions

Ag commodities are notoriously volatile and this is a long only bet with a 6-12month lockup.

As for your friend making annualised 20% return...what's the timeframe? Futures traded Ags have done exceptionally well off the pandemic lows...are they outperforming the benchmark or just matching it?
(below Invesco Ag ETF (USD) ratio'd to Invesco AUD ETF (USD) to try and approximate AUD pricing)


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## Joe Blow (3 October 2022)

InsvestoBoy said:


> @Joe Blow do you think you'd mind updating  the title to include the acronym/name?




I see that it goes by both names in different places (even on their own website), so I have just added the acronym to the thread title to avoid any confusion.


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## DamienR (3 October 2022)

InsvestoBoy said:


> Never heard of it, thanks for bringing it to our attention.
> 
> IIF seems to stand for Invest In Farming according to their site.
> 
> ...



Hi Insvestoboy, thank you for your feedback and you make some valid points. I will talk to my mate again and discuss these points with him. That said I might put my toe in the water and see what it's all about.


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