The HC Commodities Podcast

Episode Title: Will Ags Save Your Portfolio?
Host: Paul Chapman, HC Group
Guest: Jake Hanley, Managing Director at Tucrium
Date: November 19, 2025

Overview

This episode explores the case for investing in agricultural commodities—particularly via ETFs (Exchange Traded Funds)—in a time of escalating global volatility and transformational shifts driven by geopolitics, digitization, and rapid technological change. Paul Chapman is joined by Jake Hanley of Tucrium, delving into the macroeconomic backdrop, cycles in agricultural markets, the structure and logic of agricultural ETFs, and what the future may hold for investors seeking diversification and resilience.

Key Discussion Points & Insights

1. Setting the Global and Market Context (01:00 – 04:30)

• Pivot Point in the Global Economy:
  Jake Hanley describes 2026 as a period of “great acceleration,” where the world is undergoing profound, rapid changes not seen before, driven by technology, geopolitics, and changing economic cycles.

• Commodities Supercycle Thesis:
  Hanley recounts that Tucrium predicted a commodities rebound in their 2020 outlook, expecting a new bull market reminiscent of the early 2000s, though the catalyst (COVID-19) was unexpected.

• Historical Parallels:
  He frames current events through a historian’s lens, comparing the rise of recent populist movements and global competition for resources to past eras marked by contention, both domestically and internationally.

  “What I know from history in populist movements is that it creates a period of contention and stress not only internally, but also internationally… You’re automatically going to have instability and competition.” — Jake Hanley [05:18]

2. The Golden Grain Cycle Explained (07:25 – 11:31)

• Three Stages of Grain Markets:

  1. Stage 1: Prices trade near the cost of production (long periods of stability due to global subsidies and stable supply-demand balance).
  2. Stage 2: Supply constraint arises (often weather-driven), triggering prices to spike as reserves are drawn down.
  3. Stage 3: Production recovers, prices fall back toward production cost.

• Current Position:
  Hanley believes we’re currently in Stage 1, with prices at or below production cost and thus “potentially at a level where there’s very limited downside for agricultural commodities”—setting up the next big move should a supply shock occur.

  “We believe we are firmly in stage one with prices trading at or near the cost of production… which sets the stage for a potential Stage 2.” — Jake Hanley [10:56]

3. The “Great Acceleration” and Its Implications (12:18 – 18:16)

• Historic Rate of Change:
  Hanley asserts “never in the history of mankind has the rate of change been as fast as it is right now,” with AI, robotics, and energy demand shifting at unprecedented rates.

• Uncertainty and Volatility:
  The rapid pace makes planning and capital allocation incredibly challenging (“there’s so many varying forecasts… private markets… are expanding far faster than the regulator’s ability to keep up”).

• Volatility as a Constant:
  Despite recent periods of relative calm, Hanley stresses that volatility “is always bubbling right at the surface, ready to jump.”

  “Every time I hear [farmers say], ‘we just want some certainty, we just want some normalcy,’ I have to scream: it’s not coming back.” — Jake Hanley [13:10]

4. Agriculture’s Unique Place in Portfolios (18:16 – 23:25)

• Global Demand Driven by Diet:
  Hanley explains how increases in wealth—especially in developing economies—lead to higher animal protein consumption, driving consistent demand for grains.

• Diversification & Resilience:
  Agricultural ETFs offer low correlation to stocks and bonds, helping to “zig when others zag” and increase portfolio resilience in disruptive or inflationary environments.

  “That resiliency comes from having assets in your portfolio that zig when others zag.” — Jake Hanley [21:19]

5. Risk Premiums and Government Intervention (23:25 – 31:26)

• Event-Driven Upside and Policy Risks:
  Hanley and Chapman dissect events where prices did not react as expected (e.g., oil post-Iran, wheat after the Ukraine war), discussing how fundamentals and policy interventions (such as subsidies and trade tariffs) act as both stabilizers and depressors of price.

• Supply Chain Adaptability:
  The wheat market’s reaction to the Ukraine war illustrated how markets can initially react sharply but then revert if supply chains adjust.

  “The initial reaction was, ‘Oh my gosh, 30% of the world’s wheat exports are coming offline.’ That didn’t happen. And so… wheat prices came down.” — Jake Hanley [26:08]

6. Mechanics & Nuances of Agricultural Commodity ETFs (31:26 – 36:11)

• ETF Structure and Roll Yield:
  Hanley explains the mechanics of Tucrium’s ETFs—spreading exposure across futures contracts to mitigate negative roll yield (the cost of maintaining long positions in contango markets).
• No Yield, Just Exposure:
  Unlike stocks, commodity ETFs don’t pay dividends or yield; returns are entirely based on the movement of the underlying commodity prices (and the financial structure of the ETF itself).
• Backwardation Can Help:
  In backwardated markets, ETF structures can capture positive roll yield.

7. Long-Term Deflationary Pressures vs. Shock Events (36:11 – 39:38)

• Productivity and Yields:
  Chapman notes that technological advances have kept agricultural prices low by boosting yields—potentially a long-term deflationary driver.

• Shock Potential Remains:
  Hanley acknowledges yields may keep climbing, but argues that cycles of surplus and sudden shortages will continue to create significant price volatility and investment opportunity.

  “I don’t see an end to what we’ve… come to see from time to time again… some type of supply and production shock where you’re dipping into those, those excess reserves.” — Jake Hanley [38:08]

8. Population Trends, Demographics, and the "Fourth Turning" (39:38 – 48:42)

• Demographics and Long-Term Demand:
  Discussion of forecasts that depopulation or declining populations—especially in China—could pose risks or changes to global demand, but likely not within the typical investment horizon.

• Portfolio Construction:
  Hanley emphasizes the similarities between different grain ETFs in terms of risk/return but notes narrative-driven flows (e.g., war spikes wheat, trade war shifts soybean flows).

• Fourth Turning Thesis:
  The episode closes with a discussion of Neil Howe’s generational cycles—arguing that the “Fourth Turning” (a period of maximum crisis and rebuilding) aligns with today’s volatility and may not be over until around 2033.

  “The fourth turning just means you’ve gone through this ultimate period of maximum crisis where everything has broken to pieces and all that is left to do now is to start putting it back together.” — Jake Hanley [47:00]

Memorable Quotes

• “You need to have resiliency as you’re thinking about your investment portfolio. Just as, you know, I hope policymakers are thinking about resiliency as they’re reshaping the world in trade negotiations.”
  — Jake Hanley [21:09]

• “I truly believe that the prices are a scoreboard and reflection of reality and what’s going on in the world.”
  — Jake Hanley [24:24]

• “Every time I hear it, I have to scream: it’s not coming back. I’m sorry, but you’re not going to get it—simply because the accelerated rate of change is historic and it’s not anything that we’re used to.”
  — Jake Hanley [13:10]

Notable Timestamps

• 01:00 – Setting the macro context and worldview for commodity markets
• 07:25 – Explaining the golden grain cycle and its stages
• 12:18 – Introduction to the "Great Acceleration" thesis and volatility
• 18:16 – Why invest in agricultural ETFs? Diversification and demand
• 23:25 – Risk premiums, event-driven moves, and the role of government intervention
• 31:26 – ETF mechanics, roll yield, and structural differences from equities
• 36:11 – Technological progress, deflation, and the likelihood of continued shocks
• 39:38 – Demographics, China's demand, and the long-run view
• 45:32 – The Fourth Turning explained

Book Recommendations

• The Fourth Turning Is Here by Neil Howe
• The True Believer by Eric Hoffer (on mass movements and mass psychology)

Tone & Style

The discussion is highly knowledgeable and conversational, blending historical context, market mechanics, and larger societal narratives with practical insights for investors and asset allocators. Jake Hanley brings a grounded, historian’s perspective mixed with pragmatic financial acumen.

Summary

This episode argues that agricultural commodities—despite periods of stasis and deflation from productivity gains—still offer a strategic hedge and resilience in portfolios given the unpredictability of supply shocks and the unique role of food in global stability. As the world faces what both speakers portray as an accelerated, chaotic era, ag ETFs are positioned not as steady yielders but as anti-fragile assets that may “save your portfolio” in times of acute crisis.