SO YOU WANT TO BE A FARMER:

A look back at year one of Edible Earth Farm

an in-depth look at starting a commercially viable produce farm

John (Johnny) Parker

Follow Us on Twitter: @backtothefarm @edibleearthfarm

BEFORE WE BEGIN

A look back at year one of Edible Earth Farm

•  Please place mobile devices on vibrate or mute. •  Feel free to Tweet or blog this session. Twitter

hashtag: #pasa20. •  Please hold your questions till the end of the

presentation. I have a lot to cover. I allotted time for a Q&A discussion.

•  Session website: http://edibleearthfarm.com/starting-a-farm.html

Session Overview

  This session attempts to look at starting a produce farm from a business perspective   The first half of the session is a pictorial journey of year on at

Edible Earth Farm   The second half we’ll talk about the specifics   Beware: Lots of eye candy

  This session will not broach issues like plant varieties, soil fertility or plant health. That’s not to say these items are not important. Horticulture and farming experience is an important component in starting a farm. Note the discrepancy in session description: we will not be talking about crop selection.

  Admittedly, this presentation takes advantage of the promotional opportunity I have here today, speaking to you. I’ll indicate where it is not obvious.

  Important skill as an aspiring farmer: never miss an opportunity to promote your farm, your product or yourself.

  Not a SPIN farming session

Session Details

  Who am I   What is Edible Earth Farm   Year One

  How we started   What we did   Our lessons

  So You Wanna Farm?   Scale   Skills   Infrastructure & Equipment   Revenue Streams   Pricing   CSA Resources   Marketing your Farm   Financing a Farm   Diversification   Farming Resources

Who Am I

  What qualifies me to speak here today? Very little!   I hold an off-farm job at Carnegie Mellon University and I work

as a sales rep for Woodward Crossings   Worked on an organic farm and at a French restaurant as a

teenager   Moved to Pittsburgh to go to culinary school   Dropped out of culinary school to open a vintage clothing

boutique in Pittsburgh’s Southside   Eventually, I returned to school and studied computer science

and software engineering   I’m determined to build a financially viable produce farm   Started Edible Earth Farm with my wife   I try to apply software engineering principles to farming (e.g.

risk management, systems optimization, formal processes)

Edible Earth Farm

  A produce growing business started by John and April Parker

  Established initially as a micro-farm to:   Limit risk   Minimize initial investment   Jumpstart a larger, commercially viable operation   Use the opportunity to gather and analyze data   Begin to build efficiencies   Understand the market   Do we still enjoy it after the first year?

  In 2010 it was managed full-time by April. I worked on weekends and during paid time off from my day job. We had lots of help from friends and family.

Distance Makes the Heart Grow Fonder

2.25 hours 110 miles

Starting Equipment

Year One Objectives

  Grow on 1+ acre using intensive cropping techniques

  Build important infrastructure   Start an 18 week CSA w/ ~20 members   Participate in weekly farmers’ market   Develop processes   Provide a high quality product   Market the farm   Learn   Start small. Don’t fail!

The Immediate Tasks

  Drill water well and run irrigation lines   Build produce cooler   Build mobile hoophouse   Purchase a delivery truck   Purchase supplies   Find someone to start seeds   Build sorting/washing/packing station   Find a market to sell at   Cultivate   The list goes on ……………..

H2O Well

Never Leave A Ditch Open!

Produce Cooler

Stats: 12’x12’ Low ceiling 20K BTU A/C R-20+

Sorting/Cleaning/Packing Station

Early-Season

Mid-Season

Oakland Farmers’ Market Click to Play Video

2010 CSA Click to Play Video

Lesson: Weeds

  Employ a strategy that’s proven   Stay on top of them   Be able to identify weeds   Understand how to manage them

Wheel Hoe by Valley Oak Tool Company

Diamond Scuffle Hoe

Backpack Flamer

Hay and Straw Buckwheat

Mulch

Hand Weeding

Crop Rotation

Stale Seedbed Technique

Cultivation Composting

S-tine Sweep

Lesson: CSA the First Year?

  CSA in first year is not recommended   Time consuming to organize and market   Cost prohibitive at less than 40 shares   For us, we were selling at prices less than we could

command at a market   Constant product supply including variety is required   Worked for us because we may have quit had we not

cashed their checks   We received lots of encouragement from our CSA

customers

  A CSA is certainly something that should be considered for subsequent years   In the initial year, use farmers’ markets to build

interest in a CSA

Lesson: Pests and Disease

  Seek knowledge from experienced farmers   Learn to identify early signs   Scout often   Employ a proven crop rotation strategy   Understand the lifecycle of the pest or

disease

Lesson: Farm Finances

  Don’t overspend   Prepare for a substantial initial investment   Purchase equipment only when necessary or when you

can determine that it would greatly reduce costs or resources

  Prepare to operate at a loss for at least two years   Know your input costs   Be frugal but not cheap

  Weigh the cost of a product or service with the potential value of a long-term relationship with a vendor

  Borrowing money is an unfortunate reality   Constantly evaluate financial risks   Learn to manage financial stress in a healthy and

constructive way

So You Wanna Farm?  How big?

  Start small but not too small   Don’t under commit   Initial capital and risk comfort will most often dictate initial

size   Be sure you have the necessary startup capital. It’s very easy to

underestimate.   Don’t start without necessary equipment and infrastructure   Let your budget drive your size and don’t overspend   There are economies of scale. However, they require

experience to harness.   Be sure to develop a 5 year plan for growth that takes data

from revenue projections. Revise yearly.   Don’t jump in too early   Prepare to operate for several years with minimal or no

profit

Important Skills

  Time management   Including the ability to quickly reschedule around changing

weather conditions   Knowing when good enough is better than perfect   Developing efficiencies through process optimization   Learn to leverage economies of scale but also beware of

the point where there are diminishing returns   Mechanical knowhow   People management   Risk management   Stress management   Computer and web skills   Industry knowledge   Customer relations

Large Equipment Needs

  Tractor   If farming more than 3 acres, a tractor is a must

  Buy large, buy newer. 40HP-50HP w/front end loader and pallet forks.   A skid loader and a tractor are an ideal setup. Tractors are not designed

to do a lot of FEL activities. Hard on tractor transmission and clutch.

  Tiller   Can often buy two used for less than the price of one new. While

BCS tillers are nice, Troy-Bilt Horse tillers will do the job.   Shop for good used equipment. If you can’t tell the difference, buy

new instead. Consider the cost of a new piece of equipment and average its cost over the life of the product. Oftentimes, new equipment wins out when you factor in repair costs and downtime.

  Mist Blower/Sprayer   Use to spray crops. Mix spraying agent with a sticker.

  Delivery truck, Pickup truck, Trailer   Shop for fuel efficiency

Large Equipment Needs Contd..

  PTO Driven Tiller   If farming more than 3 acres, a PTO driven tiller is

advised   Can find many on the used market but you don’t know

how they were cared for

  Mulch Layer   Worth its weight in gold!

  Purchase one that will produce raised beds   Heat up the roots of the plant better and helps keep roots dry

  Buy a good quality layer

  Propane Flamer   Used in controlling weeds

  Pre-emergence flaming helps give plants a head start. Heat will burst the cells in the small weeds killing them.

Large Equipment Needs Contd..

  Jang Seeders   Jang JP series

  Seed singulation   Reduces seed cost   Reduces need to thin

  Dense planting   Great for intensive cropping operations   Does very well with small seed

  Can singulate lettuce and carrot seed

  Combine with pre-emergence flaming for great results. Particularly with slow to germinate seed.

  NOTE: Does not seed large non-spherical shaped seed

Specs:   JP-3 12” outside row 3 seed heads   JP-6 22” outside row 3,4,5,6 seed heads   JP-6W 36” outside row 3,4,5,6 seed heads   Not cheap. Very well engineered.

WoodwardCrossings.com Or contact me: johnny@woodwardcrossings.com

Infrastructure and Equipment

Revenue Sources

  CSA   Farmers’ Markets   Local Farm Alliance   On-site Market   Wholesale   Restaurants The more sources you choose, the less risk exposure you have to significant loss. However, taking on additional revenue sources comes at a price in time and resources and can oftentimes impact the quality of the product. Start small and try to limit risk. Expand as you become comfortable.

Revenue Source — CSA

Potential: Not uncommon for 1000+ CSA member operations on 30 acres Cost prohibitive at < 40 members Pros:   Potential revenue stream early in the year. Although, increasingly,

members expect payment plans which increases the costs to manage and diminishes an early revenue stream.

  Predictability. Unlike growing for market, it’s much easier to plan how much to grow.

  Flexibility with product and varieties Cons:   Extensive amount of effort to plan, organize and manage

(especially if it’s your first year)   Marketing costs   Less of a connection to customers compared to other direct-to-

consumer sources   Increasingly competitive due to its popularity among produce

farmers

Revenue Sources – Farmers’ Markets

Potential: $5000-$10,000 max first season. Varies by market. Being certified organic often will open doors to markets that would otherwise not accept additional produce farmers. Harder to find good markets because of the increasing number of smaller local markets. Pros:   A great way to move product that hasn’t been used in CSAs,

sold to restaurants or wholesaled   Great way to meet and interact face to face with your

customers   Immediate and honest feedback Cons:   Good markets are often difficult to get into   Revenue variability -- You’ll have bad weeks   Can be very political   Location at the market matters

  Tenured vendors almost always have better spots at market

Revenue Sources – Local Farm Alliance

Potential: Varies depending on your status in the alliance Structure of co-ops/alliances vary greatly. Oftentimes, there will be buy-in fees and yearly dues. Pros:   Allows growers to focus on growing   Harness the experience of alliance employees to pack and

distribute CSA shares, recruit new members and market the service

  Price is better than wholesale   Less emphasis on product uniformity compared to wholesaling Cons:   Impacts a farms ability to build a brand insofar as the marketing

is done under the name of the alliance   Selling for less than you could command in other retail channels   With a large alliance, demand for product from any given grower is

reduced. It becomes imperative for a grower to partner with an alliance that has few growers and a commitment to growth

Revenue Sources – On-site Market

Potential: Very difficult to project Revenue is largely dependent on location, local demographics, nearby competition, having quality traffic, complementary products, product availability and product selection Pros:   Minimal start-up costs   Minimal risk   Little or no transportation costs   Minimal labor costs to staff, if you can limit the time the market is

open to a day or two Cons:   If the farm is located in a low-traffic area, getting customers can be

difficult and will require advertising costs   Margins may be slim in areas where people expect better priced

products   Much like a farmers’ market, you will likely experience revenue

variability   Takes away from farming time – be sure to limit hours

Revenue Sources – Wholesale

Potential: Difficult to project Being successful at wholesale requires vast amounts of experience and resources Pros:   Relatively dependable source of revenue   Minimal marketing costs   Can focus on specializing in products that do well in your area and

soil Cons:   Lots of waste. Distributors demand product uniformity.   Packaging costs.   Distributors demand product packed to specifications.   Margins are slim. Difficult to compete with large California farms that

can harness years of experience and economies of scale.   Inability to get feedback from customers   At the mercy of the distributor

Revenue Sources – Restaurant

Potential: Difficult to predict first year revenue. Can reliably use first year as baseline for subsequent years. Be realistic about pricing. Distributors add about 20% to the wholesale purchase price. Monitor commodity prices and adjust pricing accordingly. Pros:   Can often command prices close to retail for high quality items   Outlet for large quantities of product   Learn about hot varieties that may also sell well at market   Chefs love local products   Immediate and honest feedback Cons:   Requires significant marketing effort   Difficult to predict demand   Requires significant time to engage chefs, accept orders and

deliver product   Some chefs want multiple deliveries per week

Pricing

  Develop pricing strategies for each revenue source

  Know your cost to produce a product   Know the competition   Don’t underprice your product. Yet, know the

price customers are willing to pay and use it to your advantage.

  Consider value-added items to justify higher prices (e.g. certified organic, online ordering, cleaner product)

  Revisit pricing strategy several times a season   Resist the urge to have loss leaders

CSA Numbers

  CSA shares per acre 1acre – 20-30 shares 4 acre – 100-125 shares

  CSA pricing: $15-$30 per week/share with the average price being $25

  Expect $3000-$5000 net return per acre   Expect 20% yearly member attrition   2009 average price and length $540 for 20

weeks

CSA Resources All files included in download with permission from the author

Zone 5A

http://www.roxburyfarm.com

Greenhouse Schedule

http://www.roxburyfarm.com/content/7211

Marketing Your Farm

  Create markets! They won’t come to you.   Farm website   Social media   Local print and local CSA directories   Online communities (e.g. LocalHarvest)   If selling at a farmers’ market, use the

opportunity to promote other products or locations

  Use friends and family to spread the word   Signage   Newsletters   Blog

Social Media

  It’s a slippery slope! Once you start and to be effective, you should be committed to building it.   Takes vast amounts of time to manage   Exposure to customer feedback that may be difficult to

manage given other farm responsibilities   Return on time investment is difficult to quantify.

Building the network is slow and has minimal benefit early in the process.

  The power it affords a business should not be discounted   Young customers want that level of interaction   If you have a good product and service, customers will

spread the word   Spread the word about specials and new products   Gather feedback on what people want

Financing a Farm

  Debt is an unfortunate reality   Build strong relationships with local lenders   Manage debt responsibly   Save now!   Be conscious of opportunities to shift debt to

an institution with better terms. This has the potential to save substantial amounts of money over the life of your debt.

  Do the math. Only borrow when you can show that the positively impact the bottom line.

  Set aggressive repayment goals

Diversification

  Farming is a high risk and low profit business

  Find areas to expand where you can leverage existing skills or equipment

  Quickly cull operations or efforts that are unprofitable

  Diversify: flowers, prepared food, fruits, meats, bees, the possibilities are endless……………

Edible Earth Farm & Eatery

Farming Resources – Books

ISBN: 093003175X

ISBN: 9780930031756

Market Farming Success – Lynn Byczynski -  Complete overview of a market farm operation

including: -  A look at market potential – $25,000 gross per acre -  Identifying ideal farm characteristics -  What to grow -  Production lifecycle -  Planting -  Recordkeeping -  Flower

The New Organic Grower – Elliot Coleman -  Very detailed look at the full lifecycle of a market farm

including: -  Land characteristics -  Soil Fertility -  Deep-organic production methods -  Farm labor -  Green manures -  Pest management

Farming Resources – Books contd.

ISBN: 1605296775

ISBN: 1603580816

The Winter Harvest Handbook – Elliot Coleman -  One of my favorite books. Explores:

-  Winter production in unheated greenhouses -  Crop rotation -  Vertical growing -  Overwintering -  Soil fertility -  Movable greenhouses -  Intensive crop production -  Hardy plant varieties

The Organic Gardener's Handbook of Natural Pest and Disease Control – Rodale Press -  A resource for pest and disease identification. Explores:

-  Details preventative measures and organic controls -  Describes ideal growing environment for 200+

vegetables, fruits, herbs and flowers

Farming Resources – Books contd.

ISBN: 093581745X

Sustainable Vegetable Production From Start-Up to Market -  Highly recommended book for aspiring farmers.

Required reading in several Masters of Sustainability programs

-  Describes recordkeeping strategies, budgets, marketing and equipment to name only a few.

-  A must for any aspiring farmer

Web Resources •  New England Small Farm Institute •  Roxbury Farm – Detailed production information available for

download •  Penn State Cooperative Extension •  Northwest Beginning Farmers Project

Publications •  Growing for Market •  Small Farm Journal •  Vegetable Grower – Warning!

Contact Info & Services

John (Johnny) Parker 814/303-9663 johnny@edibleearthfarm.com website: EdibleEarthFarm.com blog: BackToTheFarm.net twitter: @backtothefarm My Services: Farm Equipment Sales Speaking Engagements Technical Consulting Business Software Evaluation Project Management