Posts Tagged: scale

More Thoughts on Scale and Small Farm Profitability

Both of my daughters are involved in production agriculture.  My oldest, Lara, who is 16, will be showing a lamb at our county fair in two weeks - something she's done every year since she was 9.  She also has a small flock of commercial sheep that are part of our larger flock.  A junior in high school, she's an officer in her Future Farmers of America chapter.  She's also trained Mo, the best border collie we have!  Emma, an eleven-year-old sixth grader, will be showing her second lamb at the fair, along with a breeding ewe.  Like her sister, Emma has her own small commercial flock, and she sells eggs from her own flock of chickens.  In short, we're raising both our girls to have an appreciation for farming - and, perhaps, to become commercial farmers or ranchers themselves.

But given my own struggles to make a living from ranching (which I've documented in this blog), can I really recommend that my girls pursue a career trying to produce food for a local food system?  Is there a future for farming and ranching - as a commercial endeavor - in our part of the Sierra Foothills?  I think there is (all farmers are optimists - as Will Rogers said, "The farmer has to be an optimist or he wouldn't still be a farmer"), but I think we need to make some important decisions about farming as a business.

And fundamentally, farming must be a business.  Sustainable farming rests on three pillars - ecological sustainability, social sustainability and economic sustainability!  In my mind, if a farm can't stay in business (economic sustainability), it can't provide ecological or social benefits - in other words, economic sustainability is the foundation of sustainable farming.  This brings us to the evil "P" word - profit.  Without profit, I can't do simple things - like pay my mortgage, pay for health insurance - or buy the food I don't grow myself.  Profit isn't the reason that I farm, but it allows my farm to exist.

One of the best responses I've seen to "Don't Let Your Children Grow Up to Be Farmers" was written by Cody Reed, a beginning farmer from Plumas County (click here to read Cody's response).  He correctly raises a number of points that all of us - farmers and eaters - need to discuss regarding locally produced food.  Another sheep rancher, Rex Williams, responded to my Facebook link to Cody's blog with the following:

"I have always beat myself up for not being able to make my entire living off of our agricultural endeavors but after doing a little research into some local history a lot of farms of years past have had to have off farm support I have read of plenty of outfits who are successful in the second or third generation, that the patriarch had to work in the woods or milk or something for someone else to get his own farm off the ground.

"This news alone should give all of us hope that maybe, someday we can own a little of the dirt we take care of!"

Rex raises a valid point here - the history of small-scale farming in the United States is full of examples of families who work off-farm or in other trades so that they can continue farming.  In most of the commercial ranching families I know today, at least one family member works off-farm - mostly for the benefits.  While off-farm work can make life busy and stressful at times, I've found that I enjoy the combination - and the economic stability it provides!

Scale, as I've written many times before, enters the equation, too - if I can make a profit on each lamb I raise, I need to raise enough lambs to generate enough total profit to make a living.  The same goes for any other crop.  While I can adjust my standard of living to some extent (living frugally and working off-farm are the strategies I've employed), I think the fundamental issue is one of scale.  How can I grow my farm or ranch to the size necessary to make a living from it?  Conversely, are there some things I can do on the expense side of the equation that will allow me to achieve greater profitability at a smaller scale?

Over the 12 years in which we've tried to farm commercially, one of the most significant barriers to expansion has been affordable access and long-term tenure to agricultural land - especially irrigated pasture, in my case. Farmland in most of California is valued far beyond it's productive capacity - in other words, we've found that we can't purchase farmland based on the agricultural revenue it will produce.  Consequently, banks won't make loans for real estate purchased based on agricultural income.  As a result, we've always leased land (sometimes for cash payment, other times for an exchange of services - like fire protection).  While I think a written lease is important, not every landowner wants to put terms in writing.  Most of our landlords have preferred a year-to-year arrangement - which makes it difficult for us to justify making improvements to the land.  In several cases, we've been outbid by other producers for leases - in most instances, these other producers have given up the lease once they realized they paid too much.

Another barrier to scale is access to affordable capital - not just for land purchases.  As a sheep producer, most of my capital is tied up in breeding animals - currently, a commercial yearling ewe costs roughly $150.  To purchase a flock of 600 ewes (which I think is the minimum flock size needed to provide one person with a full-time wage), I'd need $90,000.  Other capital expenses include fencing, equipment (truck and trailer), livestock guardian dogs and border collies, and handling systems.  Being financially conservative by nature, most small-scale farmers (myself included) balk at taking on this much debt.

Finally, as I've written on numerous occasions, direct marketing in a community the size of Auburn may be inherently inefficient.  To sell enough lambs (700-800) each year to make my living from sheep production, I'd need to attend 4-5 markets each week the size of the Saturday Auburn farmers' market on a year-round basis.  This means hiring someone to attend the market (since I have always sold more than my employees and interns at markets, this would likely drop my sales volume) or hiring someone to do my farm chores on market days.  And I've decided that it's more important to me to go to my kids' soccer games and horseshows on Saturdays! Scale, in other words, is as important in marketing as it is in production.

And so I continue to search for answers (as most of us do).  For Bren Smith, the answers include transitioning USDA programs away from commodity crop supports and towards supports and grants for small-scale farmers.  Personally, I don't think this addresses the underlying issues I've outlined above.  Here are the ideas I'd like to see our community discuss:

• Access to Land: local government and non-governmental organizations in Placer County are focused on land conservation, including farm- and ranchland conservation.  In some cases, these entities have purchased or accepted conservation easements on agricultural land, which at least ensures these lands won't be subdivided.  In other cases, lands have been purchased outright.  I think we need to go a step further - we need a program through which the community purchases large-scale farms and ranches from willing sellers.  These lands could be made available to commercial farmers at an affordable lease rate.  We could even create a local, modern version of the Homestead Act - a long term (20+ year) lease or life estate on the farm- and ranchlands owned by agencies or NGOs could be provided to families who agree to make agricultural improvements on these lands.  In any case, we need to end the fallacy that splitting a working farm or ranch into 5 acre ranchettes keeps the land in agriculture!
• Access to Capital: commercial lending institutions (and to a large extent, USDA credit programs) are geared towards large-scale loans rather than towards meeting the needs of small-scale farming.  For example, I talked to an agricultural loan officer in my bank who told me they didn't generally make agricultural loans of less than $250,000.  The business lending officer wasn't comfortable with the risks inherent in farming - so a smaller loan would have cost me substantially more in interest.  I think crowd-funding and community lending pools might be the answer.  Finding a way to make capital affordable - and a way to give the community some direct financial involvement in its own food system, might help small growers invest in their businesses.
• Collaborative Marketing: personally, I like the term "cooperative," but the failure of several California marketing cooperatives (Tri-Valley Growers, for example) in the last 20 years makes it a dirty word in some farming circles.  That said, I think we need more collaboration.  Consumers consistently tell us that convenience is a real barrier to eating locally grown food - some folks simply can't get to the farmers' market.  On the flip side, I don't know of any small-scale farmer who wants to go to more farmers' markets each week - especially without some guarantee of sufficient sales volume.  Perhaps we need to look at other collaborative marketing models - art galleries or antique malls come to mind. 

On My Farm

In the Summer you could, if you wanted to, lie in the hammock and reach up to pluck a ripe plum to eat, savoring the sweet, slightly tart juice, not caring if it drips down your chin.  Or, in the Fall after first frost, you could enjoy watching a woodpecker work its beak into a bobbing persimmon.

Truth be told, I’ve never lain in the hammock.  Not once.  It’s a nice idea, and I’m certainly deserving of a good rest and a chance to consider the beauty of this farm I call home from the shade of the fruit trees.  I deserve a chance to read a book, too, or take a nap in the middle of the afternoon when it’s really too hot to work.  I could even see myself on a hot night, when the daytime heat penetrates the shadows and it cools off at night only a little, taking my pillow out to the hammock and enjoying that indescribable sensation of a subtle breeze like cool moonlight across the hair of my forearms, wicking away the heat.

But, like I said, I’ve never done it, not once.  Now, don’t misunderstand me.  Farming has its pleasures, and there are plenty of them.  The well-tended fields of a farm, weeded, cropped in a patchwork of diverse vegetables, brimming over with the sounds of contented humans happily working away, is really a beautiful thing.  It conjures up all that is good, productive and peaceful, the best we humans seem to be able to do for this world and for ourselves.

I imagine, too, that when you read the first sentence of this writing, you were fulfilled in your expectations of what life on a small farm is like.  Hard work, but contentment and peacefulness filling in all the moments of the day.  People singing while they work, the cow in its field and the pigs in their wallow enjoying the fond words of the farmer as he or she moves from task to task.  Sitting down to the noon meal surrounded by dirty faces, calloused hands, plenty of laughter and good appetites—Amen!

In a certain way, you’re not mistaken.  The pleasure of farming is real.  Through heat, cold, wet, dry, crop failure, exhaustion and other pestilence, it’s still possible to regularly touch the reasons why one farms.  I’ve never been shy about saying that the real pleasure in farming is all about a kind of love or, better yet, a fidelity to place that I’ve felt through all the years of working here.  I feel a sense of responsibility to the place that is this farm that I’d be quick to say is not unlike that which, as a parent, I feel towards my children.  And, just as the relationship to a child is an uncommon combination of burden and blessing, so too is my relationship to this place.  In this sense, love is not a very descriptive word for privilege and responsibility, but it’ll have to do.

Still, while the pleasures of farming endure through all the unpredictability of a season like the counterpoint bass notes of a beautiful lyric song, the recognition of that pleasure is likely to be as fleeting as the flight of a bird.

I think of it this way:  I jump off the tractor mid-field because it’s time to turn off irrigation water in another corner of the farm.  On my way, I notice that a drip line is leaking, probably cut by a gopher, and there’s a large pool of water that threatens to drown a bed and will, in any event, encourage another burst of weeds.  Searching my pockets, I don’t have a coupler to replace the leak, so I change direction and head to the farmstand for a coupler.  Searching through the bins, I realize we are out of couplers, so I walk to the pile of discarded drip tape, where I quickly find a coupler that wasn’t removed when the drip tape was pulled up.  With coupler in hand, I head back to the leaky drip line but I then get called over to the washing station to check the quality of some salad turnips we are harvesting for the co-op.  The roots look fine, but the foliage is showing early signs of flea beetle damage.  Deciding that it’s still marketable, the washing and bunching resumes, but there’s another question from an employee that’s cultivating onions in Field 2.  We spend some time talking about what’s reasonable to accomplish efficiently in the face of too little labor and too many weeds, and then my cell phone rings.  The co-op forgot to include parsley on their order, so I take down their order and walk back to the farmstand, where I write in the new order on today’s pick list.  I then review with the person who is going to pick the parsley how many stems are in each bunch and how to pack them for the co-op.  Since I’m near my office, I decide I’d better check email to make sure that there aren’t any important communications from customers placing special orders for bulk items.  There’s an urgent email message from my ex-wife about our daughter, so I call her back to talk with her.  We end up talking for about 15 minutes, at which point I remember the leaking drip tape, so I quickly get off the phone and head back over to the field where the leak is.  It takes but a few seconds to fix the line, and I resume my trip to turn off the irrigation in another corner of the farm.  While I’m walking over, I hear a familiar sound and, looking up, I’m treated to the sight of a huge flight of migrating sandhill cranes.

I trust it’s clear that I’m not saying there’s no pleasure in farming.  There most certainly is, and in abundance when you look closely enough, but what I’ve described above is about as good as it gets in a day on the farm, repeated more or less to the day for eight months straight.  The particular pleasure is always different, but it can be as short-lived in a day as the moment the light first hits the tops of the trees at sunrise.  And, it’s important to say, you have to look for the pleasure, seize it greedily, and remember it always, or you’ll be buried in no time in fretting and disappointment.

When I set out to farm, I expected I would have time.  Time to farm artfully, time to be creative, time to tend the fields, time to say grace.  I expected I would be fulfilled, contented, and peaceful.  I expected that all the crops would be beautiful and everyone would want to buy them.  I expected that when I needed something, I’d be able to buy it, or make it, or have it through one means or another.  I expected that I could build this farm from scratch, never compromising my aesthetic sense and always progressing from one task to another or one project to another with a kind of logic.  And, I never thought I’d make mistakes with any consequences.

We all know that farming requires physical stamina and some strength, and it certainly requires endurance.  But again, truth be told, it turns out that it requires more mental stamina and endurance than physical strength, and lots more mental resilience and flexibility than is ever commonly appreciated.  I can’t imagine an occupation that requires a person to be more of a Jack or Jill of all trades than farming, including making all the right choices at all the right times.  That’s not a formula for the idyllic vision of farming that we all hold dear.

It’s true that farming is enjoying a renaissance of sorts, with a great deal of enthusiasm being brought to bear on what might fairly be called the finer things in life.  It’s impressive to see how many are called to take up farming on a small scale, and what hopes and aspirations all of us farmers bring to bear on our chosen path.

In fact, many are called, but few are chosen.  It turns out that beginning farming requires a lot of financial resources, along with a lot of courage and fortitude.  Young people can have lots of courage and fortitude, but financial resources are scarce.  Putting it all together in such a way as to make a farm pay for itself without exhausting the farmer with work and worry is something that is not widely recognized for what it is, even as more young people flock to farm.

After farming for more than ten years on this small piece of heaven on earth, I’m still wondering if I’ll be one of the chosen.  Each year is a new opportunity, and each year presents its own particular challenges.  The line between success and failure is, more often than not, extremely thin, and I often find myself unsure whether a particular year was a success or a failure.  By what criteria, on balance?

In the end, even as I know that this is not enough, I value integrity and the beauty of my fields over financial success.  I value my relationship with my customers more than I value wider recognition of our accomplishments over the past ten years.  I value the interaction I have over the Farmers’ Market table with someone who wants to know how to prepare something we have to sell than the total number of pounds sold during a season.  And, what’s more, I value the moment I see some inscrutable thing that happens before me as I wander these fields, leaving me to wonder at the depth of pleasure that love can bring.

Stuck in the Middle

Local food and small-scale farming seem to fit hand-in-glove - folks interested in locally grown food want to buy from small, family-owned farms that are part of the community.  Small-scale farmers want (and need) to sell directly to consumers - selling to the end user eliminates the need for a "middleman" who takes a cut of the value of a farm product.  While I've considered these issues in this space previously, I'm increasingly convinced that the middle - that space between micro-scale and large-scale farming - is a difficult place to be.

How Small is Big Enough?

Small is beautiful, E.F. Schuacher tells us, and Schumacher’s vision of economics at a more human scale certainly resonates with me as a small-scale farmer.  From a local food perspective, small farms are held up as a more compassionate, sustainable and responsible alternative to corporate-managed industrialized agriculture.  Small, family-owned farms, the theory goes, are more ecologically sensitive than their “industrial” counterparts.  As a practitioner of “small” farming, I am philosophically and economically inclined towards this perspective.  As someone striving to make my living from small farming, however, I often struggle with the question of scale.  Balancing the idealistic goal of staying small with the realistic need to be big enough to earn a living wage is, I think, one of the most critical questions for small farmers.

Keeping my ambition in check

I love the solitude of farming and I love the luxury of focusing on a task from start to finish. I find that when I have employees, I don’t get to focus on tasks; instead I get to manage. I don’t really like managing and I have not made myself get good at it. The best part is that is okay. I don’t have to manage people if I don’t want to.

What I do have to do is pay close attention to how big my farm is. If I am not careful I could plant more acreage than I can take care of. How do I know this? Done it. There is nothing worse than getting too ambitious and planting so much land that none of the ground gets managed effectively. The result is that all of the crops underperform, and the farm either doesn’t make money or makes a fraction of what it could have made if less were planted and more attention were paid to a smaller space.

Success in farming is in the details, not the big picture. Sure you can plant 10 beds of carrots, but can you weed 10 beds of carrots? I can’t; I can only manage one bed at a time, but one well grown bed of carrots will make you more money than 10 weed infested beds any day. I know this, yet I often have to control my urge to over plant. I usually fail on at least one crop each year, but that is also part of the joy of farming. I never said I was perfect.

Spring is the hardest time for me as a farmer because I have so much pent up farming energy. The quiet of winter lets me recharge my batteries and once the weather warms up I am ready to go. Sometime in March I can feel the call of the land to come and farm (not too much different than the Sirens calling the sailors to the rocks).  Like the sailors, I must keep my wits about me. Otherwise, I am headed for a shipwreck: a shipwreck of over ambition.

Jim Muck
Jim's Produce, Wheatland

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