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Gold in them thar waters

Progressive Forage Editor Lynn Jaynes Published on 31 May 2019

I visited with a rancher in Mississippi last month. He said the best career advice he’d been given was, “All that glitters is not gold.” He went on to say that many young farmers today in Mississippi think raising poultry will end their financial woes – in essence, it would be their gold field.

You’re familiar with western U.S. gold rush history, but probably less familiar with the gold the Greeks found in Tarpon Springs, Florida. It wasn’t mineral gold. It was golden sea sponges – but it might as well have been gold.

Now don’t confuse sea sponges with the loofah in your shower. A loofah is a gourd-like plant. (I should know, I sat through the documentary in the Tarpon Springs museum while waiting for the sand between my toes to dry.) Sea sponges are used to scrub stuff. They’re multicellular organisms that have bodies full of pores and channels allowing water to circulate through them (and critters to take harbor in them). It’s classified as an animal, not a plant, although it has no brain or central nervous system.

So who discovered this gold? For half a century, sponge fishermen from Cuba, the Bahamas or Key West came to the Florida bay to collect sponges and then return home with them. In 1889, a wealthy Philadelphia banker recognized opportunity when he saw these sponge boats returning to Key West. He quickly built a warehouse at Tarpon Springs, where he set up shop buying for New York interests.

They brought in experienced divers from the Mediterranean area, where sponges were regularly harvested, and when the divers saw the unharvested “gold” in Tarpon Springs, word spread through Greece, and the divers’ ranks quickly swelled to 500 – just like a gold rush town. After the rush waned, many stayed (and today you can get a really great Greek lamb dinner on the wharf in Tarpon Springs). There is, however, a cap to what the sponge market will bear in quantity, and the people today still fish for sponges, but it’s not the main industry anymore. After all, they have to compete with the loofah.

People haven’t stopped looking for gold, however. Remember the rush to organic milk? There was gold to be had in that market, until there wasn’t. Within just a few years, the organic milk market was oversupplied, and the gold turned to nickel.

And now there’s a new gold rush. It’s the rush to grow industrial hemp, legalized in the 2018 Farm Bill.

Last year, I spoke to a forage specialist in Oregon – one of the first states to legalize marijuana. I asked how the hemp business was doing. He said, “Well, the hemp growers are finding out farming is a lot more involved than they thought. They have neighbors mad at them for lights and fans they use causing disturbances in their communities. And they’re finding they don’t have processors, so their market is limited. And there are more expenses involved than they planned on – and regulation. It’s not the gold mine they thought it would be.”

Hmmm, sounds vaguely familiar.

There have been other gold rushes – the technology rush, the real estate rush, the house-flipping rush. You’ve likely experienced some form of gold fever, and I’ll not condemn you for it (that would be slightly hypocritical of me), but if you’re going to play in one of those gold rush fields, an article in an investment magazine, The Street, recommends keeping a few things in mind:

  1. A few make a lot of money, but most lose. It’s the basic rule of bubbles.

  2. The one who controls the land makes the money, not the one who finds gold.

  3. If you use gold, and its cost goes up, you don’t make money if you cannot increase your price.

  4. Enjoy the boomtown and escape the ghost town. Don’t overinvest or extend money you don’t have. If the market goes down, you’ll find yourself holding a lot of debt that can’t be serviced.

  5. The reliable money is in “picks and shovels.” During the Western gold rush, the article says, “providing picks and shovels to dig the gold with was more lucrative than the actual gold digging.”

Everyone has to determine for themselves what that advice means to their situations. But I would echo the Mississippi rancher: All that glitters is not gold.  end mark

Lynn Jaynes
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