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Sorry the instructions weren't clear enough. You need to put down a nest down next to its bug's corresponding resource: termite <> bamboo, grasshopper <> wheat, stink bug <> fruit. You can change which bug nest you're placing by using [Left Bumper]/[Right Bumper] on controller or [Q]/[E] on keyboard.

I probably just glossed over the instructions! For future development, some reminders of what to do and feedback coaching me to use the correct skill might help reinforce the concept.