- Author: Molly Nakahara
We like to get farmers and ranchers together and ask them this question: What could go wrong? Preferably after they've had a good night's sleep and a filling breakfast and at a time of year when their farms and ranches are relatively quiet. It is not the happiest of conversations, to say the least. But we feel that talking about farm and ranch risks, and hopefully, taking steps to create resilience in the face of these challenges, is critical to the success of agricultural businesses. Having a plan of action in the face of unforeseen crisis can be the difference between making it and losing it all.
Here are a few topics that came out of recent Risk Management discussions held during our Farm Business Planning short course and Farmer-to-Farmer Networking Breakfasts (for info on both of these events, visit our Foothill Farming website.)
Human Risk – What happens if you get hurt or sick?
This is not a fun topic. Knock on wood, you will be fit as a fiddle into a ripe old age. But what if? You need to buy health insurance. Period. You don't have the money or time to deal with being uninsured when you need health care. Take it from a gal who's racked up hundreds of thousands of dollars in medical bills, health insurance is well worth the investment.
You also need to have an Operations Manual. Do it right now! Write down each enterprise that your business relies on and the basics of keeping it functioning from day to day. It can be rough but should be enough information that a person could read the thing and keep everybody/thing alive. Print it out and keep it in an obvious place, like a binder that says “Operations Manual.” Tah Dah! Your business just became more resilient.
Now you need a designated person/persons who can read the Operations Manual and run your farm in your absence. Employees are a good place to start as they probably have a good idea already. How about a neighbor or good friend? Have them over for a cup of tea and show them where the operations manual is kept. Maybe walk through a typical feeding of the animals or watering the greenhouse. How about a farm buddy system? I'll be your emergency farmer if you'll be mine.
Marketing Risk – What if there is a sudden change to your sales outlets?
Marketing risk is a much tougher nut to crack and prepare for. We build our businesses around projected sales to retail outlets, restaurants, and farmers' markets. What if one of those outlets suddenly became unavailable? You've produced the product and may not have another buyer lined up, so what options do you have?
Jim Muck of Jim's Produce has a good strategy. He tries to always have three potential outlets for a farm product, e.g. Restaurant A, Restaurant B, and Grocery Store X. While he may have made a commitment to Restaurant A for the season, he knows that if Restaurant A were to go out of business both Restaurant B and Grocery Store X would likely be interested in the product he was supposed to sell to Restaurant A.
So what are your options? Would your wholesaler buy more? Do you have a relationship with a Farmers' Market Association that will allow you to attend a market at the last minute? How about a place that will always take a bulk order to make jam or salsa? As Paul Muller of Full Belly Farm says, a successful farmer must spend her time “100% farming and 100% marketing.” Take a moment to identify your most risky marketing outlet and create a back-up plan for that product.
Legal Risks – Are you above board with your employees?
If you aren't filing payroll tax and covering workers with workers compensation insurance, you're walking on thin ice (and technically, breaking the law.) While talk of the costs may have dissuaded you from hiring employees the right way, it's time to make the switch. And if you think you can't afford minor costs like payroll tax and insurance, you may have bigger problems in your production plans than you realize. These costs are insignificant enough that you should be able to pay for them if you can afford hired labor. The risk of getting busted for violating labor laws is significant and fines could very well put your farm or ranch out of business. Time to read up on how to follow the law (getting legal?.
Financial Risks – How well do you understand your Cash flow?
It is likely that your farm and ranch business goes through ups and downs in your cash flow cycle. Our work is largely dependent on the seasons and cycles of animals and therefore there are times when we have a lot of cash coming into the business and there are times when there is not a lot coming in. For many of us, when we have the least amount of cash coming is also when we have a lot of cash going out! Create a cash flow budget for your farm that shows the months across the top and different categories of income and expense along the side. You can then go through and project income and expense by month. This will help you plan for when cash is short, and budget more stringently when income is strong. Another strategy to weather a lopsided cash flow is to move major bills and payments to times of the year when you have income. For example, pay for liability insurance in August instead of February.
Production Risk – Do you have a plan for wildfire?
We farm in a part of California with a particularly high threat of wildfire. Now is a great time to get your wildfire plan written down and understood by all involved. Do all of your properties have at least two exits? What will happen to your livestock if you happen to be out of the area when a fire threatens your farm? Did you know that Cal Fire does not want you to leave sprinklers on when you evacuate and would rather you place buckets of water around structures? Do you maintain 100 feet of defensible space around all outbuildings? There are a lot of great resources available online to help you get started creating a plan. Start off by reading this Foothill Farming blog post on wildfire planning: http://ucanr.edu/sites/placernevadasmallfarms/blog/?blogpost=19003&blogasset=24945
One of the most important parts of managing risk on your farm is preparing yourself for the emotional toll that accompanies all of these scenarios. By taking a moment to think through a list of potential risks and what actions you'll take in the face of these risks, you are making yourself more resilient. Understandably, an initial reaction to these scary situations is to avoid thinking about them altogether. By looking at these risks as hypothetical situations, we are training ourselves and our businesses to react effectively if and when we need to.
For more information on the types of risk your farm or ranch needs to prepare for, visit the Risk Management section of our Foothill Farming website: http://ucanr.edu/sites/placernevadasmallfarms/Farm_Business_Planning-_new_2/FBP_Risk_Management/Risk_Management/
- Author: Molly Nakahara
In the current, extreme drought we are experiencing in Placer and Nevada counties, making decisions about row crop production can be challenging. Many of us already employ water efficient irrigation techniques like drip and mulch. But drought planning on the farm needs to be a combination of dealing with current situations while also preparing for the high probability of future, and potentially more severe drought conditions. One production decision addresses both: growing a summer cover crop. By growing a drought tolerant, summer cover crop you can productively fallow land during the dry months to conserve water. A summer cover crop will provide a large addition of soil organic matter which will increase the water retention in your soil during future growing seasons. Cover crops also add nutrition to the soil and decrease weed pressure.
There are a number of great summer cover crops to try. Sudangrass (Sorghum bicolor) is a great choice for the foothills during the heat of summer. It requires an initial watering at planting but can be dry farmed once established. Take caution before grazing ruminants on sudangrass as it contains highly toxic prussic acid (hydrocyanic acid.) Sudangrass has lower concentrations of prussic acid than its relative Sorghum or Sorghum-Sudangrass hybrids but it is still present in the leaves and roots of the plant. Hogs and chickens are less susceptible to prussic acid poisoning.
Another great choice for a summer cover crop is buckwheat (Fagopyrum esculentum.) Buckwheat will also grow in very dry conditions once established. It creates wonderful forage for bees and beneficial insects, is very fast growing, and helps make phosphorous more available in your soils (http://www.sarep.ucdavis.edu/covercrop/res/1994-1996/other/mini-review). Buckwheat's broad leaves and fast growth make it an ideal “smother crop” that will effectively shade out problematic weeds.
Cowpeas (Vigna unguiculata) is a good legume choice for the dry summer. They will add a lot of nitrogen to your soils and will also help suppress summer weeds. Both buckwheat and cowpeas can be used as forage crops as well.
Grow a bed of summer cover crop or grow an entire field. Try a mix of species or just one type of plant. Whichever choice you make, summer cover crops will help you farm productively under the constraints of drought.
For more information on summer cover crops, check out these resources:
- Author: Andrew Meyers
On Friday and Saturday, the 15th and 16th of February, the UC Cooperative extension here in Auburn will be hosting a Marketing Academy which will cover topics ranging from increasing sales at farmers’ markets, to learning about wholesale marketing.
The first workshop (Friday, February 15th, 1-4 PM) will focus on using health and nutritional information as marketing tools to help boost product sales. In the past several months, we at UCCE have been producing nutritional cards for various crops, and distributing them when we do tastings at farmers’ markets. We have seen a tremendous response to this type of marketing and education, and want to ensure that farmers learn about this process and how to incorporate it into their sales operations.
We will kick off Saturday, February 16th (8-Noon), with a workshop about increasing sales at farmers markets. So much of this has to do with relationship building, creating a visually appealing stall, and, of course, brining your best product to market. Most farm operations can always do better in one or more of these aspects, and many farms can improve in all three. This workshop will give practical tips and tricks to help boost those sales.
To conclude the Marketing Academy, on Saturday the 16th (1-5PM), we will have a workshop entitled “How to Break into Wholesale.” This workshop will provide information for growers new to wholesale, as well as for those with some experience with wholesale sales. Farmers markets, as we all know, each have a limit in the volume of sales. Wholesale venues give access to larger markets and the potential for a greater volume of sales. For some operations, wholesale marketing is the key to becoming financially viable. At this workshop, farmers will learn the “ins and outs” of selling to several wholesale buyers, who range from a small local grocery store, to a wholesale distributor.
The importance of marketing in a farming operation should not be understated. Any farm depends as much upon production as it does upon marketing. From choosing an appropriate display for a farmers’ market, to deciding whether or not to engage in wholesale marketing, these decisions have profound effects on the viability of a farming operation.
Come and learn more about marketing and ways to improve your strategies for the impending farming year. For more information and to register for these workshops, click here: http://ucanr.org/sites/placernevadasmallfarms/?calitem=180483&g=22527
- Author: Andrew Meyers
The Mountain Mandarin Festival wrapped up on Sunday, amidst sun and happy shoppers. Though it rained like heck on Saturday, the Festival nevertheless saw a tremendous turnout. Overall, the Festival was a huge success.
At the UCCE booth, we held tastings of PlacerGrown fruit, and conducted a simple Local Food Dot Survey. The shoppers leapt at the chance to taste Fuyu persimmons, Fuji apples, Yali and Okusankicki Pears.
There were over 300 responses for The Dot Survey, which yielded insightful results. Full results can be seen on the table below, but here are some of the more thought-provoking highlights:
- 52.9% of respondents answered that they purchased locally grown fruits and veggies weekly.
- 49.2% of respondents answered that they purchased these fruits and veggies at a farmers’ market.
- 47.7% cited convenience as the main factor keeping them from purchasing more locally grown fruits and veggies
- 47.7% defined “local” as “From my county and adjacent counties.”
One main point to keep in mind is that the shoppers at the Mountain Mandarin Festival likely do not represent shoppers in general. Consider that this festival is billed around locally grown mandarins, add in the non-stop rain on Saturday, and we can surmise that these shoppers are more likely than most to purchase locally grown products. This is evidenced by the fact that 52.9% said they purchased locally grown fruits and veggies weekly, and 49.2% responded that they purchased these fruits and veggies at a farmers’ market.
That said, 47.7% still responded that convenience (or lack thereof) was the major factor keeping them from purchasing more locally grown fruits and vegetables. Based on these results, ease-of-access is paramount to growing the local food movement. Armed with this data, we will need to consider how to make local food, and the markets that offer it, more readily accessible and convenient.
One of the more interesting insights cannot be extrapolated from the data on the table. While speaking with people over the weekend, we noticed that some shoppers believe that any food purchased at a local grocery store (such as Briar Patch Co-op) is “local”. For instance, one respondent told me that she only purchased locally produced fruits and veggies. I then asked her if she ate bananas. She replied that she did. I then pointed out that bananas are not grown locally, but she countered that they are from Briar Patch. This was one example of confusion between “locally grown fruits and veggies”, and a “local grocery store.” I do not know how prevalent this confusion is in our society, but it is something to consider. The other side of the coin would be that it does not matter, and that as long as people are shopping at a store like Briar Patch, they are inevitably going to run into local produce, so we should not discourage those types of shopping habits.
All in all, the Local Food Dot Survey gave insight into what we can do to make sure that, in the future, more people are making weekly purchases of locally grown fruits and vegetables.