Business Plan
For
Blue sage farm
Laura and Paul Sluder
796 West 520 North
Shoshone, ID 83353
Blue sage farm
Our Farm General Description
Blue Sage Farm is located north of Shoshone, Idaho and offers naturally grown, grass fed
lamb products to discerning consumers. The current market for these products are middle to
high income urban families interested in “connecting to the land”. These people demand high
quality foods raised in an environmentally friendly manner. Lean, mild flavored, tender lamb
cuts are sold at the Capital City Public Market in Boise, Idaho, local high end restaurants and a
natural foods store.
Currently, Blue Sage Farm is in its 7th year of commercial lamb production, 4rd year of direct
marketing custom lambs and 3nd year of marketing through farmers markets and restaurants. We
have a small, but growing customer base. Sales are driven by customer referral, word of mouth
and by direct contact with consumers. Our strongest growth potential for meat sales lies in
offering a wider range of products to our current customers, and expanding to large city markets.
We are also planning to expand our operation to include sheep’s milk cheese.
Mission Statement
Blue Sage Farm brings to the consumer, the knowledge that they are contributing to the
health of the environment and sustainability of small farms, while they are receiving a high
quality, local product.
Background Information and Current Trends
Sheep have been domesticated for thousands of years. Sheep are seasonal breeders and
lactate for five to six months after lambing. They exhibit a natural ability to efficiently process
forage into meat, milk and wool. Production of sheep’s milk cheese is a well developed industry
in parts of Europe. But sheep milk cheese production was unheard of in the US until recently.
Studies done at the Spooner Agricultural Research Station at the University of WisconsonMadison show that American sheep breeds crossed with East Friesian rams produce heavier and
faster growing lambs and were more prolific. Milk production of the crossbred ewes was almost
twice that of commercial meat-type American breeds. Purebred East Friesian ewes can be
expected to produce 600 to 1000 pounds of milk per lactation. Crossbreds have been shown to
produce 400 to 500 pounds of milk per lactation. Sheep milk is higher in fat and protein than
cow’s milk. Sheep milk components include 7.2% butterfat, 4.6% protein and 5.7% other solids
versus 3.5% butterfat, 3.1% protein and 5.5% other solids from the average Holstein cow. The
milk to cheese ratio (lbs. of milk required to produce 1 lb of cheese) is 6:1 for aged cheese and
2:1 for fresh cheese. With approximately 66 million pounds of sheep’s milk cheese being
imported by the U.S.3, there appears ample economic opportunity for this new industry.
There is a growing quantity of consumers that desire local products that are produced using
minimal or no chemicals, in a sustainable environment. The division between large and small
farms continues to widen. We want to stay connected to our farm and rural way of life.
At the end of 2007, Blue Sage Farm generated $2,800 in net income and retained an
inventory of $9,600 in frozen lamb meat to be sold to restaurants and the farmer’s market,
throughout the first six months of 2008. By mid-year new crop lamb is mature enough for
processing. Acquisition of a building for meat storage (walk-in freezer) and a dairy parlor will
enable us to further expand our product line to include cheese.
The current flock of 120 East Friesian/Polypay cross ewes, and 20 Polypay ewes lamb in
January and February. The lambs will be left with the ewes until they reach 30 days of age. At
that point lambs born of the dairy type sheep will be left with the ewes for only 8 hours per day
so that the ewes can be milked once per day. After 30 days of milking once daily, the lambs will
be weaned completely and the ewes will be milked twice daily until dry off in July. These lambs
will be pastured until they reach slaughter size at which time they will be marketed through our
current market outlets. The Polypay lambs will remain with the ewes until they are weaned at 5
months of age and taken to slaughter and processed for marketing. At this point, all the ewes
will be flushed for rebreeding August 15th.
Sheep’s milk will be shipped to Ballard Family Dairy & Cheese for processing into cheese.
Antibiotic testing equipment will be purchased at this time. The cheese varieties will be aged for
a minimum of 6 months. Sale of the cheese will begin in August of 2009. Cheese will be
marketed through current customers and with Ballard’s cheese at several cheese shops in
southern California and Portland, Oregon.
One part time employee will be added to relief milk one day per week and to haul the lambs
to the USDA slaughter plant in Nampa in July-August as they become ready. Purebred East
Friesian rams will be purchased to increase the milk production of the replacement ewes.
Replacement stock will be kept in order to build the flock to 250 ewes by 2010.
By September 2009, we will begin paying on the operating loan with the income from the
meat and cheese. By August 2010, the operating loan will be paid. Current living expenses and
mortgage will continue to be paid by Paul’s income from his salary drawn as part owner of
Glendale Construction.
Business Structure
Blue Sage Farm currently operates as a sole proprietorship. The farm has considered
incorporating or other business forms in the future when legal and tax issues make it prudent.
Management
Our management philosophy is based on utilizing the talent of the people involved in the
business, rewarding them for their contributions, while serving the customer. Laura brings the
knowledge of animal husbandry, veterinary experience, and customer relations as the main
operator of the business. She is also a graduate of the Lost River Grazing Academy. Her
husband, Paul, provides for the family’s living expenses and contributes to the physical labor and
mechanical work required on the farm. The children, Jake (12 yrs.) and Isabella (8 yrs.) help
with the daily activities on the farm and enjoy helping at the farmer’s market. Jake has an active
interest in the sheep flock with his own ewes and ram that he uses for 4-H and Isabella owns and
cares for a flock of 70 laying chickens.
Crop Production
Our Farm
*Irrigated pasture (owned) – 75 acres
*Pasture produces approximately 6 tons of forage per acre utilizing Management Intensive
Grazing (MiG)
Rented Ground
*Irrigated pasture (rented) – 75 acres
Approximately 15 acres of fallow ground needs to be planted – put into annual forages for fall
and winter feeding to meet the needs of lactating ewes.
Approximately 60 acres of remaining pasture utilized for custom grazing cattle until the sheep
flock expansion would require the remaining pasture.
Richfield Farm provides 100 tons of hay. Paul’s 11% ownership of Glendale Construction and
being the Vice President provides Blue Sage Farm with the hay.
We are firm believers in utilizing MiG because it provides an avenue for farm environmental
and economic sustainability. MiG uses high stock density, short duration grazing to manage
forage production efficiency. Animal nutrient demand through the grazing season is balanced
with forage supply and available forage is allocated based on animal requirements. More pasture
production, plus greater utilization equals higher carrying capacity. Higher carrying capacity
means more production units over which to spread overhead costs.
Though the utilization of MiG the pastures stay in their most efficient and palatable state.
The forages are left with enough residual and allowed adequate time for regrowth to prevent
overgrazing. MiG allows for a longer grazing season, usually starting several weeks before
conventional grazing and extending well into the winter with stockpiled annual forages.
The nutrients are naturally recycled by using manure from the sheep as a fertilizer. Manure
is spread more uniformly across the pasture with daily moving of the sheep. When sheep are fed
very palatable forage, the manure is not hard and rapidly breaks down. Nutrients are used
immediately by growing forage.
MiG provides a profitable and environmentally sound basis for us to be good environmental
stewards with our natural resources. MiG facilitates more plant diversity with various grasses
and legumes in the pasture. Herbicides are not required to control weeds because the sheep
graze them when they are small. Herbicides often kill off the beneficial legumes in the pasture
mix that we need to naturally fix nitrogen from the atmosphere. We reduce the soil erosion
potential by having good stands of pasture. As we increase the stockpiled winter forage, it will
provide more winter habitat for small wildlife. We have pheasants in our pastures this year that
were not there previously.
MiG offers great advantages for sustainable farm profitability. This management style
reduces the costs for controlling weeds, fertilizing pastures and livestock feed, while increasing
forage production and diversity.
Short Term Farm Goals (with-in 12 months or Crop Year 2008)
*Build the flock size to 160 ewes
*Graze 100,000 lb live weight per acre
*Finish subdividing pastures with permanent fence
*Obtain a new computer and financial software
*Update our farm internet site
*Complete the farm logo design
Short Term Farm Goals (with-in 24-36 months)
*Develop a cheese market
*Build the flock size to 200 ewes
*Create cold storage capacity for meat and cheese
*Sheep dairy barn built and operational
*Reduce dependence on hay for winter feed
*Increase income from selling hay
Long Term Farm Goals
*Build the flock size to 250 ewes
*Produce high quality grass fed lamb
*Produce a series of high quality sheep cheeses
*Continue expansion of meat and cheese markets
*Keep debt at a level of not more than 50% of total assets and reduce all debt to zero in 15 years
*Build a capital reserve of $50,000 for reinvestment in the business and for contingencies
*Contribute $7500 year to a retirement account for Laura and Paul
*Invest money each year for Jake and Isabella as educational or business startup dollars
*Maintain an environmental and economically sustainable operation that supports our family
way of life and makes positive contributions to our community
*Help other sustainable small farm entrepreneurs with financial support
*Educate people about the benefits of MiG through on-farm tours
Outside Services/Advisors
Blue Sage Farm relies heavily on the expertise of an experienced and highly qualified CPA
to maintain necessary tax records.
The farm also works closely with an Agricultural Economist with the University of Idaho.
This individual is lending assistance with decisions pertaining to a new business start up. We
also work with the Lincoln County Extension Educator for help with daily farm management and
marketing, and a private consultant for market feasibility analysis and grant writing.
Risk Management
Blue Sage Farm keeps current in all insurances necessary to protect the farm and its assets.
These include general liability, vehicle coverage and product liability.
Competitive Analysis
Blue Sage Farm is one of a few farms in southern Idaho to direct market to restaurants and at
farmer’s markets. However, we are the only lamb producers who market a smaller 115 pound
lean grass fed live weight lamb vs. 150-160 pound live weight commercial lamb - that has often
been in a feedlot before going to market. The local grass-fed market is wide open as people are
concerned about their health and restaurant chefs don’t like paying a high price for fat that has to
be removed.
We also use a management tool called MiG. We are able to graze four times the average
number of animal units with this high stock density, short duration grazing system and expect
this stocking rate to increase with better fencing. MiG improves the farm’s bottom line from
both the increase in income and the decrease of expenses like fuel, fertilizer, herbicides and
heavy machinery. We are able to do this on irrigated pastures and don’t have to rely on public
range for grazing.
Since Idaho is experiencing growth and expansion in the large cities like Boise, and an influx
of people from cities to rural areas, the market for these quality products are more in demand.
We will also be unique in that we will offer sheep’s milk cheese in addition to our meat products.
We will be Idaho’s 1st Grade A sheep dairy.
Market Analysis
Blue Sage Farm produces mild flavored, lean, pasture-raised lamb. Sheep are raised
enjoying freedom to graze in our southern Idaho blue sagebrush country environment. We use
our Belgian draft horses to feed the sheep during the winter. We sell our farm fresh, local lamb
direct to customers, natural foods stores and restaurants. Our most common customers are
middle to high income urbanites. These people come to the Capital City Public Market
expecting high quality, local products and enjoy meeting the farmers and producers to be
educated on how the food they are eating is raised. They enjoy the social aspect of buying,
preparing and eating food. Current sales average $330/week or $11,220 per year (est. 34 weeks).
Sales to these customers are seasonal and decrease in the months of January through April.
Our second type of customer is high end restaurant chefs. These chefs have tried a variety of
products and are highly knowledgeable about the foods they serve and the customers they are
trying to attract. They demand a very high quality product. Our current sales average
$420/week or $21,840 per year (est. 52 weeks).
Other sales include whole and half “freezer lamb” to local residents. These sales currently
generate $4,500/year.
Our marketing materials and informational brochures will be printed with recycled paper.
We would like all aspects of our business to be as environmentally friendly as possible. Our
farm logo is a simple, but expressive black and white original drawing that we are in the process
of finalizing. The logo will be included on all meat and cheese produced from Blue Sage Farm.
Expanding our internet presence for Blue Sage Farm high quality products is important. We
plan to update our farm website. We plan to be included on the Eatwild web site under the Idaho
directory of grass-fed products and on the list of farms that ship. On the Localharvest website
our lamb products will be included under Idaho farms and under shopping for meats (lamb).
Marketing our cheese though igourmet.com is another internet connection to focus on.
Promotion of our farm and high quality meat and cheese may include word of mouth,
internet, advertising, events, direct mail, and sales literature. We are in the process of sending
letters to our current and potential customers about our new sheep’s milk cheese products.
Distribution of products may include retail, wholesale, mail order, internet, stores and
restaurants that we deliver directly or mail.
Lamb meat will be stored frozen. The cheese will be kept cold and aged. A running
inventory of meat and cheese will be maintained by Laura.