Tag Archives: Worthington Farmers Market

Farm’s Annual Report: 2012

Background:

It has been three years since I published the 2009 Annual Report for our farm.  I guess I have recovered enough to give it another go.  The intervening years have not been profitable, but that isn’t exactly true.  We seem to have accomplished an equilibrium (for three years running) whereby we essentially break even.  If we purchase more animals than we slaughter, we lose money and gain herd size (this was the story of 2010 and 2011).  This year—2012—is slightly profitable, but only because we have achieved peak herd (as many head, for now, as our land can accommodate) and slaughtered one more animal than we purchased.  So while we in past years have been extremely profitless, we are now not exactly profitable (like Eskimos with many words for snow, we farmers know numerous subtle variations of economic distress).

Introductory Rant:

This 2012 Annual Report of Up the Lane Grass Fed Beef Farm (located in Johnstown Ohio) comes towards you, dear reader, like a homemade drone launched from the roof of our barn; armed with Truth; guided by a Spirit of Transparency.  Or like some lone straggling goose; hungry and cold, yet unwavering; honking and flapping its weary way across a troubled sky.

Is farming a vice?  Is it stupid to farm?  If so, what is this Annual Report?  A cry for help?  A confession?  A warning to others?  These are rhetorical questions.  Please do not answer.

Oh farming!  If loving you is wrong—I don’t want to be right!

Part One: Income Plateau

This year’s income of about $30,000 is essentially the same as our income in 2011.  We have topped out—limited by the number of cattle we can support on our pasture.  If we overstock our farm we will rely too much on hay, undermining the benefits of expansion.  We need to respect the limits of our ground.  We need to keep the number of days we hay the herd down to 100 or less per year.  We must watch patiently as our soil improves (conservation through production…), stocking additional cattle to match its increased strength.  Happily, this is happening already, but slowly.  This is not right on time manufacturing or supply-chain logistics.  This is farming.

Certainly our income is not constrained by demand in Central Ohio for grass fed beef.  In fact, the public is so ravenous for such meat, it is more accurate to say that we are disappointing demand rather than meeting it.  Our income comes from retailing at the Worthington Farmers Market.  This is how we get paid.  The support of our customers is always invigorating and on any given Saturday can put a thousand dollars or more in our cash box.  We are absolutely rationing how much meat we bring to market—presently about half an animal’s worth each week.  We typically sell out about halfway through each market morning.  We could sell double the meat if we had it.  And that’s just Worthington.  If we had enough product to participate in other Central Ohio Farmers Markets (Granville, Clintonville, North Market…), we could sell five or six times as much meat as we sell now: incomes of $150,000-180,000 per year.

Doing multiple Saturday markets would be expensive.  We would need to hire folks to run additional booths.  And it would compromise one of the best things we offer the public—direct access to the farmer, a personal connection—, the kind of holistic assurance and intimacy we could not provide customers shopping a booth of ours staffed by a hired worker.  Diminishing returns for us, diminished experience for the public—this makes such ambitious scaling up unlikely in our future.  But to double production in order to meet demand in Worthington; perhaps triple production to also accommodate a weekday market such as Westerville—we have every incentive to strive to get this done.

Our primary strategy for increasing production is to rent ground from other farmers nearby.  We are getting the word out but so far we have not found the right situation.  It is proving to be another thing we will need to innovate—crafting lease agreements that suit both parties while addressing the awkwardness of placing livestock on another person’s property (including the animals’ need for water, the multiple-year return needed to repay initial pasture seed cost if needed, fencing maintenance, insuring liabilities from possible animal escape, and the list goes on).  We will keep working this possibility, as we have decided that purchasing additional ground ourselves is not a good option.  Since buying our home with 12 acres in 1998, we have bought four adjoining parcels, one at a time, for a total of 80 acres.  But that’s enough.  Purchasing an acre of ground for $7000 in order to potentially make $100 a year profit farming it is not a bright idea.  Better to rent such ground.  Better for us to invest that $7000 elsewhere, diversifying our assets beyond land values here in NE Licking County!

Incidentally, we have decided we are not interested in direct marketing beef produced by other farms.  We are good direct marketers, and there are a number of quality grass farmers who have no interest in coming to town and retailing their beef; however, this would put us in the business of talking about farming rather than actually farming.  At some point we could end up struggling to remain more genuine than pastoral drawings on milk cartons containing milk from confinement dairies!  (Hello, California!)  It might be more lucrative, yes, that’s likely true; but it’s farming we love—not money.

So that’s where we are at:  scaled up enough to cover basic operating costs, but not enough to start securing substantial profit.  We can amend our income by getting into sidelines.  Last year we grew and sold about a thousand dollars of garlic.  In years past we have done well selling John’s Portuguese Sweet Bread and Marie’s Jams.  If we can develop the right situation, we will take the opportunity to at least double beef production.  And we will continue (though it does not serve our farm’s finances directly) to encourage and bring along any other farmers interested in producing and retailing grass fed beef in Central Ohio.  We worry that current clamoring demand, so profoundly frustrated, could start to fall apart.

Cost of Animals: Going Up

We are at the point where 75% of our income selling beef goes into what I call our Cost of Animals.  This year for example, a year of $30,000 income, we spent about $10,000 buying calves (32%).  We spent about $9,000 buying hay (28%).  And we spent about $5,000 on processing (15%).  There is little wiggle room in any of these categories of expenses.  Taken together, they are unlikely to ever come down below say 65%.  Even that figure would require some harmonic convergence of favorable circumstances.  And we cannot afford to have them go at all above 75%.

We are raising our prices in 2013, on average 15%.  This is quite a big increase.  But I just heard from the processor that his prices have to go up this year, about 8%.  Meanwhile calf prices are at all-time record highs, up over 30% in the past two years, and now I’m learning that hay will cost about 12% more this summer.  We’ll see if the price of calves subsides.  It is possible we will need to raise our prices even more, as early as November 2013, just to keep our Cost of Animals at 75%.

Expenses: The Art of Doing Nothing

Expenses were 17% of income.  There were no major purchases.  Other than Supplies (5.4%), the list is mainly stuff like Insurance (1.6%), Licenses (1.0%), Market Booth (1.0%), Fuel (1.1%), and Fencing (1.7%).  I would like to keep expenses down to 15% but that’s not easy when it comes to needing another freezer ($700) or a generator ($1,000).  This January, to start off the new year with a bang, we spent $1,900 repairing our Polaris Ranger.  That’s going to be over 5% of our annual farm income.  Ouch.

Anyone consulting the viability of a farm such as ours needs to understand two hard truths.  First, farm income might cover operating expenses and provide a bit of salary, but it can never pay for infrastructure.  If you are lucky enough to grow up on a farm, your family can set you in play as a farmer with free land, a tractor or two, an old truck, a livestock wagon, fenced pasture, some old barns.  If you are like us, you need to buy the land and the truck and tractor and livestock wagon.  You need to build the barns and put in the fence.  And then you can start farming—but without the possibility of recovering any of that initial investment.

If land prices go up over time, then getting reduced agricultural use taxes on the land is a way that farmers can profit long-term—by being able to hold the land and then having a big capital gain when selling much later.  Of course these days land values have been stagnant, for nearly a decade, which is seriously disappointing.

The second hard truth about farming is that you may cover operating expenses and provide yourself a little salary, but you will certainly not be buying a new pickup truck with farm income.  You will not be buying a new tractor with that money either.  Additional acreage?  Another barn?  That’s all going to have to come from somewhere else.  Don’t even think about it.  (I didn’t even mention health insurance!)  Another successful season at Farmers Market is over!  What are you going to do?  I don’t know, but you’re sure as hell not going to Disney Land!

Profit:

So this year we show a profit of about 8%, about $2,500.  This would be our first profit ever.  And I am using that term loosely.  For one thing, this does not account for our labor.  Counting my labor at 1,000 hours plus Marie’s at 300 (mainly at market), that’s about $2.00 an hour.  Considering ourselves volunteers, which of course we really are, then this year’s margin reflects more than anything else the fact that we butchered one more animal than we purchased this year.  In years past, when we were growing the herd, we might lose $6,000 but end the year with 8 more animals in the herd.  This year, if we had butchered one less animal, we would have broken even and had one more calf in the herd this spring.

Conclusion:

Barring major purchases, we are breaking even as farmers, not counting our labor.  This doesn’t sound very good, I know, and it’s not what prospective farmers or loyal customers want to hear.

But I do not count this a discouragement.  From here we move forward to establishing whether a livelihood can be made producing and selling grass fed beef.  (And we do so confident that in order to explore this possibility one need not risk or lose a fortune.)

There are several things we must do:

First, expand production considerably—to about double—through leasing more ground.  This will drive fixed expenses down considerably.

Second, shorten the hay season.  Haying is costing us about $75 each day, so even trimming the need to hay by only ten days saves us $750.  This is probably where our biggest possibility to improve our margin lies.

Third, raise prices.  I regret this.  I am a discounter by inclination after thirty-plus years working at Half Price Books.  I want folks who are making a purchase to have the double pleasure of getting what they want and having a terrific bargain at the same time.  But as I near retirement, when my fancy salary will not be there to back up the farming, and when—as Marie and I get older—we will need some hired help with the physical farm work, we are going to have to bring in more money, plain and simple.

Incrementally, as gently as we can, we need to bring the public along toward paying what it really costs to produce grass fed beef.  Who knows what those prices will need to be?  $8.00 for ground?  $30 for Filet?  I don’t know.  Perhaps instead of selling out in a flash each week to incredibly enthusiastic and grateful customers, we will lose some of that excitement but sell out just the same, more slowly.  Ultimately the public will decide whether it is willing to pay prices high enough to establish a solid incentive for farmers to bring meat such as we are producing to town.  It may be that they will decline and find that grass fed beef—proving unsustainable financially—puttered out and disappeared.

I guess I am coming to appreciate that, because I have somewhat deep pockets and love farming, I have not been entirely honest with our Farmers Market customers.  I have been conspiring, along with some other farmers at market, to shield them from the hard truth—that the cost of production of much of what they love to buy at market is often well above retail prices at a store like Kroger’s.  I am not sure customers will like this truth, or will be ready to accept it.  I am always touched when a customer seems shocked I have a fulltime job in town; bless their hearts, they want to think of me as earning a solid middle class living, replete with health insurance and vacations and going out to restaurants and shopping at the mall, on nothing more than farm income.  (The same thing happens to me when a fellow farmer, for example Ed Snavely, a superb hog man and a farmer I look up to, mentions in passing something about his factory job.  Curly Tail Organic Farm, BTW—best pork chops ever.)  This cannot go on forever.  We farmers need to force the issue of whether our participation in Farmers Markets is genuinely sustainable economically.  If it turns out the public has been effectively “bought off” by the cheap prices of an industrial food system supported by government subsidies, we cannot compete against that system by subsidizing our offerings by working for next to nothing, even if we love what we are doing.  We need to trust the public enough to offer them the chance to step up and do the right thing.  That’s the partnership I believe they are capable of.  And anyway, it’s not like there is any real comparison between our beef and what you can buy in the grocery—not even in Whole Foods.

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Worthington Summer Market Starts!

What a pleasure it is to be starting another season at Worthington’s Summer Farmers Market.  This May opens our fifth summer.  Our first year we were so nervous and insecure.  We didn’t know anybody and had never done a market.  We had no idea what to expect.  Since then, the market has become our home—the public’s enthusiastic support a bracing input for our farm.  Now we are happy to see longtime customers (and their children (and their dogs)) again, as well as the shining faces of new customers just discovering the energy and diversity of the market. 

 Hello again, U.S. Bank building, keeping us in its shade till (as if by magic) almost exactly noon, when it is time to pack up and go.  Hello, green plastic parking cones (old friends, durable martyrs).  And springtime itself, with its playful early morning light and friendly breezes—the portent of good things in the air.  “Morning!” I call out to passers-by as I set up our tent.  “Morning!” they respond without breaking stride, nodding as they go by.  All seems right with the world and we all share the satisfaction of knowing it.

 The indoor winter market is gaining momentum (its third season just concluded).  We are glad to be a part of it.  However, there are many people (customers and vendors alike) who remain happily fixed in the seasonality of the outdoor market, making in May a renewal of market life, which they will subscribe to weekly without fail till its conclusion in the blustery overcast chill of late October.  This makes the month of May at market a time of reunion.

 Farmers and market customers are mutually reconstructing an  innocence, a sense of place, a spirit of season and cycle, which was supposed to have been superseded long ago.  This is a mutual exercise, as tender and trusting as a band of actors working together on a play.  And it is happening in real life.  Children are growing up going to market on Saturday mornings.  Suburbs are striving to establish viable markets in the same way they work to have good parks and schools, as part of making their community special. 

 This is not a reenactment of some historic thing since made romantic—civil war battles and jousting tournaments (“Good day me Lady”) or other such creatively animated anachronisms.

 This is food.  Now, in May, it is rhubarb sticking way out of customers’ bags, delicate starter herb plants carried carefully home to the garden, crisp lettuce.  One Saturday the strawberries will be here.  Sugar snaps and baby zucchinis, nearly luminescent.  Then cucumbers, sweet and crisp.  Eggplant and luscious tomatoes.  Peaches!   Plums!   And late in the summer the sweet corn—mountains of it.  And the melons.  A succession of happy discoveries (Look!  Green Beans!).

 The best bread you have ever tasted.  The best milk.  Eggs and chicken and pork and beef absolutely unlike anything available in conventional stores and that means Whole Foods too. 

 One of the reasons farmers markets are so popular (you could look it up—there is an explosive renewal of farmers’ markets coast-to-coast), is that rather than being simply quaint, they in fact sync up neatly with the current pulse of things.  If you think of the market as a web page…then each individual vendor is a choice you can engage if you like.  You can review the vendor briefly and go on by.  Or you can click and explore, and suddenly you are being offered a world of information: the oven they built to bake bread with; how they inoculate logs to grow shitake mushrooms; how grass fed cattle are rotationally grazed; why chickens lay more eggs in the summer; how fruit trees are grafted and apples cold-stored; when garlic is planted.  You can drill down further, getting to know the vendor personally.  You can link then to their web page or even go visit the farm.

 Information-rich, story-enhanced, personality-infused—local food is not just better food.  Purchased at a market like Worthington’s, it is better shopping too.

 See you at market!

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Farm’s Annual Report: 2009

Introduction:

This Annual Report on our farm’s status–financial and otherwise–goes out with much respect to all our fellow small farmers and those contemplating getting into farming.  This is an honest communiqué from the front lines of our struggle to establish a self-sustaining farm.   

This has been a good year for Up the Lane Farm.  An important year.  Not profitable–not nearly.  Actual real dollars-in-hand profit can seem like  the unicorn of farm finances.  Easier to spot in farming ledgers is the common asterisk:  the year we replaced the tractor; the year we put a roof on the barn; the year we built fence or trenched water lines to the shed or put tires (or brakes!) on the truck

(Did you hear the one about the farmer who won the lottery?  He won three million dollars!  The TV reporter asked him what he was going to do with all that money.  The farmer answered, “I’m just gonna keep farming till it’s all gone…”) 

We believe this year marks our arrival at the threshold of profitability.  But getting here has been a decade of massive investment including purchasing a 70 acre farm, a tractor, a pick up truck and livestock trailer, a cattle chute, and many thousands of dollars of other basic essentials.  In 2010, and in subsequent years, if we are fortunate, we will be able to show some profits farming.   However, making money, while useful, can hardly be considered the real point of what we are doing.  

To quote the inaugural essay on our farm’s web page, upthelanefarm.com: “…our farm’s business plan is based on the model of an independent Caribbean nation.  We may struggle, even possibly forever (or so it seems), but we are free.  And we are rather proud!”

The importance of 2009 is that it has proven to be a year of consolidation and growth for our farm.  Our methods and philosophy have been improved; our marketing and sell-through has been strengthened; the scale of our operation has nearly doubled.  Even as momentum is building for us, we are coming into focus.  Things are coming together.  We are learning and growing in our exploration of what we love to do.  Put that in the ledger!

 Part One: Farmer’s Market Success!

Our farm’s primary source of income–retailing beef at the Worthington Farmers Market–was up a solid 34% over 2008.  This extends a trend we have experienced since we started at Worthington in 2006.  We are now doing twelve times the business we did that first season.  The Worthington Farmers Market is our home.  Our customers there are like family.  Their trust and cheerful goodwill is a bracing input for our farm.

One goal for 2010 is to grow Worthington Market sales another 20%.  This would bring us to about the limit of how much beef we can produce  using current stocking rates.    It would mean taking fourteen or fifteen animals to slaughter.  Any additional growth will need to come from increased stocking rates, which would mean that, happily, our ground is truly benefiting from mob grazing.  Mob grazing gurus say we should be able to double stocking rates in just a few years doing what we are doing.  (Why, that’s like getting another farm for free! they are fond of saying.)  If this is true, all the more better.  But even then we feel like we will be selling all we can produce to the public at the Worthington market–doing our best to keep the availability of various cuts steady and solid so as to match the quality and good value we are providing with an improved reliability of supply.

We seriously consolidated our position in the Worthington Market this year.  In the winter–when the economy first shocked people into a kind of wariness–we introduced one pound packages of cubed stew meat as a cheaper alternative to roasts (typically three pounds each).  We made the decision to not raise our prices in 2009.  Both of these decisions were received enthusiastically.  When we started the outdoor season in May 2009, we unveiled the new logo we had developed with Baltimore Ohio graphic artist Nathaniel Stitzlein, as part of announcing ourselves officially for the first time as 100% Grass-Fed.  This new look is so strong and sharp.  We expect it will serve us well for many years to come.

Now we are 100% Grass Fed, at prices considerably lower than competing grass-fed beef vendors.  We agree with Joel Salatin, who says that, since grass feeding is the least expensive way of raising beef, it should be possible to price it so that it is competitive in the broader marketplace (with commercial beef that is both more expensive to produce and inferior in quality and healthfulness).  He makes this issue into a form of proselytizing, for a better kind of meat and a better rural landscape.  We are selling close enough to the cost of production that we feel we are well-positioned regarding potential changes in the marketplace around us.  You never know when Wal-Mart will show up in the grass-fed beef arena!  Or when someone like Kroger will try to set up booths at Farmer’s Markets–demanding entry!

In support of our retailing, we have launched a new farm web page, upthelanefarm.com.  We get so busy at market sometimes, we have limited ability to fully explain ourselves to customers, especially newer ones with Big Questions about farming methods or grass-fed beef in general.  It is handy to be able to offer them a business card and refer them to the web page, where we are posting all the kinds of information we can think of that customers seem in search of.  We do not just want to sell meat, we want to strengthen in every way we can the farmer-consumer bond. 

During the summer of 2009 we started experimenting with having farm tours.  We did this on a small and personal scale, single families at a time.  This was gratifying for all concerned.  We will pursue this again when weather permits in 2010.  Our aim will be to set aside certain tour dates and sign folks up for limited attendance.  We do not want to disturb the cattle with too large a group, but neither can we make ourselves available for spur of the moment individual visits from any of a hundred families…

Part Two: Heavy Spending…

Behind our announcement that we are 100% grass-fed, is an enormous change in our farming methods and philosophy that has been underway for nearly two years.  We stopped graining well ahead of May 2009, so that we knew all meat sold as of May would be grass-fed only.  But in February 2009, at the PASA Conference in State College PA, I took a three-day course in mob grazing that gave our farm the template it needed to begin to make the most of grass feeding–both for the cattle and for the ground.  We do not have very good role models in our part of Ohio when it comes to grass-fed beef, so traveling afar and returning with so much exciting information (and a reading list I have yet to finish getting through), was just what was needed at this point in our farm’s history.

Between May 2009 and November 2009 we fenced forty-acres of open grass fields into approximately five-acre paddocks.  This was done all by hand, using our own invented electric fencing–a total of 10,000′ of fence line and 17 gates for only $5000.  The way we fenced will be a separate post one day soon.  We are rather proud about it and eager to share.  Suffice it to say we are reliant upon the magical synergy of electricity and the contentment of our cattle. 

To be able to roam this landscape alongside our cattle, moving them daily into fresh paddocks and hauling water to them, we purchased a Polaris Ranger which I admit, as a longtime dog lover, could be the best friend I have ever had. 

We spent nearly $15,000 purchasing new animals this year, an increase of nearly 50% over the year prior.  This represents a considerable expansion of our herd rather than merely replacing animals as they go to slaughter.  We entered 2009 with eighteen animals, we now enter 2010 with thirty-one.  We have made the aquaintance of new farmers who will sell us animals for years to come, including a source of the calmest Angus calves we have ever seen.  They are actually as easy to handle and live with as Herefords.  

We purchased and installed a household generator this year at considerable expense.  This means we have power backup for the freezers, for the well pump, and for the electric fence.  This cost us money, but the sense of well-being heading into January weather is priceless.  As just one example, our cattle drink about 300 gallons of water each day.  Without a well pump we would be hauling that water every day from somewhere in Columbus?!

Licking County has changed the rules about how we transport and handle meat at the Farmer’s Market.  They want the meat in mechanical refrigeration units at all times, even at the point of sale.  So we (and some other farmers we know) have had to decide whether to invest in making this possible or drop out of retailing meat.  We purchased a step van and fixed its brakes and decorated it with our terrific new graphics and got freezers installed in it–another big investment.

We did not make any hay in 2009.  (We were too busy fencing!)  This is a big part of how we cut fuel costs to a third of what they were in 2008, saving nearly $1500.  It would be nice to say we lowered our dependence on fossil fuels, but this year anyway that is not true because we purchased every bit as much hay as we used to make ourselves, meaning someone else used up the same fuel we did the year before.  As we evolve with mob grazing, we should be trimming down the cost of purchasing hay radically.  Then we will begin to be able to point to a serious decline in our dependence on fossil fuel.

Part Three: Forecast for 2010: Profit?!

Could this be the year we realize a profit?    There is a chance the answer is yes.  No fencing, no vehicle or equipment purchases, no growing the herd as we did in 2009.  We will be able to cut back by as much as 50% on hay purchases.  Also, we will be able to sell off some equipment we no longer need–hay-making gear, manure spreader, bale elevator.  If the momentum we are experiencing at market persists, we could be celebrating our farm’s first year of profits.  We feel pretty good about how smart and proactive our spending has been in 2009, however we cannot afford to continue being so smart forever, with spending being nearly twice as much as income.  This is the year for us to hunker down and reap the benefits of all the improved methods and reinvestment put into play during 2009.

 

 

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