Developing business plans & practices
Eric & Joanna Reuter
Chert Hollow Farm, LLC
General principles & goals
- Minimize debt, expenditures & off-farm inputs
- Base management & income on natural resources
- Use diversification to manage work & risk
- Experiment, record, and learn
- Plan & farm for the long-term
- Maintain an attractive & well-kept farm
- Make a living from the land and enjoy it
- Maximize self-sufficiency, especially in food
Working with what we have
PROS:
- Rich bottomland soil
- Isolation & protection
- Good timber
- Good potential pasture
- Reliable county water
CONS:
- Limited good, flat soil
- Degraded upland soil
- Little infrastructure
- Restrictive microclimate
- Difficult access
Chert Hollow Farm overview
- Certified Organic vegetable farm
- Primary focus: 200 varieties of produce
- Includes smaller amounts of fruits, grains, & herbs
- Secondary focus on farm & home production
- Dairy & meat goats, chickens, swine, and timber
- 2011-2012 transition from farmers market to CSA program
“Farm for profit, not production”
- Plan all activities around net/gross ratio
- Farm 1: $50,000 - $45,000 = $5,000: 10%
- Farm 2: $10,000 - $5,000 = $5,000: 50%
Who can expand/meet goals more easily?
- Net goal $30,000:
- Farm 1 needs $300,000 gross
- Farm 2 needs $60,000 gross
- Plan for long-term needs
Efficiency matters; the less you
spend, the less you have to earn
Choosing management
- What methods will you use, at what cost?
- Reducing off-farm inputs, and closing loops, is very
effective at saving money
- Records help identify hidden costs & labor
- For us, Certified Organic helps with these goals
-
Records become a planning tool
Methods limit off-farm inputs
Closed loops save money
Justifies higher prices
Management examples
- Plan crop/animal rotations to fit more into area
- Consider cyclical on-farm inputs
- Saving cover crop seed
- Start a manure herd
- Grow winter forage for livestock/poultry
- Analyze labor & material choices
Choosing methods & inputs
-
Think efficiency
Consider costs of any methods/inputs
Run tests of different methods/inputs
Consider whole-year results, not per-crop
We chose mostly manual methods
-
Cheaper & more reliable
Less weather-dependent
Allow intensive growing
Quality of life
- However
- Time & labor-intensive
- Limits some crops
Methods examples:
- Tomatoes: in a 4’ wide bed, we tested 1 row vs. 2
- In theory, two rows gives more yield & more income,
though with more cost
- In practice, single row plants seemed healthier, larger, and
more productive, with lower costs
- Edamame: in a 2.5’ wide bed, we tested 1 or 2 rows at
plant spacings from 2”-8”.
- 2 rows (12” apart) yielded more
and shaded weeds, though tight
spacings hurt. Ideal method for
us is 2 rows with 6” spacings.
Analyzing space, yield,
time, and income together
- Consider one 100’ bed for summer & fall (using Johnny’s yield
data per 100’)
- Zucchini 200lb x $2/lb = $400, July onward
- Leaving zucchini alone may mean no fall crop; removing in
mid-August allows for fall crop:
- Zucchini 100lb x $2/lb = $200 PLUS
- Fall greens (kale, collards, mustard) 75lb x $8/lb = $600
- Which is better, $400 or $800?
- You can still keep zucchini going through frost by planting
other beds later, after mid-summer crops like garlic come out.
- Efficient space use & willingness to move on can effectively
raise yields & income
Choosing products
- Consider more than customer popularity
-
Labor & input needs
Harvest & storability
Market presence & competition
Sales ceiling
On-farm viability
- Loss leaders are fine, if intended
- Sweet corn
Products examples
- Popular, but not lucrative - needs equipment. We don’t grow
it for sale because we can get more money elsewhere.
- 100’row yields ~100 ears x $.50/ear = $50
- Slicer tomatoes
- Easiest crop for gardeners and everyone grows them. Market
is always swamped at peak and customer appreciation is
relatively low. We don’t grow many for market.
- 100’ row yields 150lb x $3/lb = $450
- Herbs
- Lucrative in small amounts, but hard to scale up, and need to
be very fresh. We don’t overdo it with these.
- Garlic
- Low pest pressure & input needs, most work comes during
non-peak times, stores well. We grow lots. Still has a ceiling.
- 100’ row yields 300 heads x $2/head = $600
Using on-farm resources
- What do you have on-hand to close loops?
- Chert Hollow:
- limited open land, lots of timber
- on-farm logging creates value & saves money
Labor needs
- How to pay?
- IRS allows farm non-cash
payments, no witholding
- Liability
- Volunteers/interns/visitors
can be forced to sue you
- Internship rules
- Government requires internships to
demonstrate education links, & more
- Otherwise may run afoul of labor laws
Risk Management
Uncertainties/risks
Responses
- Climate/weather,
disease/pest threats
- Changing regulations
(food safety, etc.)
- Customer demands,
competition
- Contamination of crops
(pathogens, long-lived
herbicides, gov’t sprays)
- Lawsuits
- Injury/illness
- Diversified crops &
adaptable methods
- Pay attention, have alternative
plans, member of Farm to
Consumer Legal Defense Fund
- Research, test, innovate, market
- Organic methods and certification
- LLC, liability insurance (?),
document attention to safety
- Health insurance, safety conscious
- Market diversity
Diversity
- Draw in many types of customers
- Ecological diversity
- Consider disease, nutrient use, & ecosystem
- Income diversity
- Multiple income streams buffer the unknown
- Labor diversity
- Spread workload over more time & tasks
Agritourism
- Attract, educate, &
impress customers
- Charge a fee to attach
value to your time
- New income stream
- Gain feedback & ideas
- Promotes openness
Time management
- Always consider the value of your time
- Ask “What’s in it for me?”
- Assess relative uses of time
- Going to market takes two days; will I
make enough to justify that?
- 2 ten-hour days: 20hr x $8 = $160
- Plan around core principles
Business plans are dynamic
- Continually assess, revise, and adapt as needed
- Deeply tied to individual circumstances
- Conditions on the ground
- Skills and interests of the farmer
- Resources available
- Every farm should have a different focus,
resulting in an effective whole
Thank you
Questions?