We have been taking advantage of the quiet time this winter to pull out the assorted notebooks/ receipts/spreadsheets and synthesize, reflect on, and digest the farm finances from our previous year. Last year we put off doing taxes until the beginning of April which added a lot of stress to an already busy time. We learned from this, and with the advice from our smart farmer friends at Bear Butte Gardens, we’re tackling this earlier and have blocked out two weeks to review farm finances and get taxes filed before the busy farm season begins. Now that we have a couple seasons of data, we can start comparing and seeing trends over time, and put more robust thoughts together regarding our farm business plan. Having our management and methods be as transparent as possible is important to us. Here are some of our numbers and thoughts from 2013, a review of our markets and production, and goals for this next season.
A reflection on farm finances for 2013 - In 2013, our second year growing full-time, we increased our gross sales by 54% over 2012 and it looks possible that we might see similar numbers next year. A big part of this increase was due to an increased number of CSA shares offered and an increase in the price per share. We also increased our distribution to include one local restaurant and one local grocery market. Our total income from the weekly Spearfish Farmers Market decreased significantly this year even though our average weekly sales increased, due to a shorter season (14 weeks instead of 24).
In the process of our review, we have assessed the numbers on our laying hen operation and found it to be a considerable money sink. It turns out we are spending nearly twice as much on the certified organic feed as we are making on sales of eggs. Despite this, we’re keeping the layers and their good diet for their assorted incalculable, intangible benefits. We’ve made the decision to increase the cost of our eggs, this increase will still not cover the full cost of keeping the birds, but it will help. And in addition to the hens, this year we’ll be pasturing meat birds which should prove to be more financially reasonable for us. (As a side note, we’re taking pre-orders on birds, give us a call to reserve).
An important question in our financial review is how close we are to our goal of having the farm support us. This year the farm paid for its own immediate operation (seeds, tools, supplies, etc.), but did not pay for our labor, contribute to farm or personal savings, or cover the cost of the land, or walk-in cooler. We are certainly much closer than last year towards covering all farm expenses, however generating the income to pay labor is a longer term goal.
Many farms (including ours) subsidize operations by not taking into account the farmers’ labor. However, we are aware of this, don’t agree with it, and our long term (5 year) budget planning includes paying a living wage to both of us. A rough estimate of the income needed to pay for our labor looks like this:
60 hrs/week (for Trish (working off farm part time) and Jeremy (full time on farm) combined, year average, more in summer, less in winter, includes field work, time at market, advertising, planning, website maintenance, etc).
$15/hour (living wage and health insurance and overhead costs)
$46,800 annual wages for both T&J
+ farm expenses, which are (estimated) between $10-15,000/year (variable value based on having to replace irrigation or other spendy infrastructure, and so on) = $61,800 required gross farm sales. Which is huge.
Considering our current production rates this number is absurd, but it is feasible from our acreage with smart planning and intensive farming.
If we run the numbers with a lower wage, which reduces our long term savings, but is maybe more attainable short term: 60 hrs/ week at $10/ hr for 52 weeks = $31,200 (T&J combined wages w/o farm expenses)
…which compared to our income this year is still huge. We feel a bit more confident that this might be attainable in 5 years.
These numbers are discouraging, but they don’t factor in our quality of life and absolutely incredible pantry.
Projecting our financing into this coming year we expect to increase total sales which will allow us to pay off the walk-in, continue to pay off a portion of the greenhouse (on a 5-10 year plan), pay our health insurance fees, and possibly pay Jeremy something for his labor. In addition, our expenses should decrease as we’ve saved seed, installed most major infrastructure, and accumulated most small tools to allow us to operate efficiently.
A review of our marketing outlets - In 2013, we offered 16 CSA shares for an 18 week season. The cost of our shares was $500 and we are pleased that despite the weather challenges, we filled the shares and exceeded the cost of the shares with vegetables. Being involved with our customers via the CSA plan has been a tremendous asset to us as beginning farmers. The predetermined market helps us plan plantings and harvest. We really value hearing about how things were eaten, shared, enjoyed and receiving immediate, direct feedback. The CSA allows us to grow a diversity of vegetables, knowing that we have an outlet, rather than focusing on a few good sellers for market. That diversity is also risk management with tenuous weather, pests, crop failure, etc. Through the CSA, we’ve gotten a chance to know a truly incredible cross section of Spearfish, engaged, thoughtful, inspiring group of people who are almost as excited about eating vegetables and building the local food system as we are. Another perk to the CSA is having potato leek soup delivered to us by a share member after an especially long CSA harvest and pick-up day. The only disadvantages to the CSA we‘re finding at this point is that it takes a considerable amount of planning, and that it can be high stress, especially in the beginning of the season during low production, worrying about filling shares amply.
We participated in the weekly Spearfish Farmers Market in the Park. Attending the Market means we have a weekly early morning bicycle ride to the park and 4 hours committed to being away from the farm and chores there (which has its perks, though is often frustrating). The Market provides a venue to sell vegetables that we either have surplus of or not enough to fill CSA shares with. It fills an advertising role, a bit. And the Market gives us a chance to visit with a lively group of area growers each week that we wouldn’t otherwise get to see until October. On the other hand, we are finding the Market does not pay for our time (production, harvest, and time spent selling). We cannot compete with low prices set by home growers trying to off-load their surplus. And we are often left with unsold produce at the end of a long morning which is a challenge to deal with. We feel strongly that Spearfish deserves, needs, and can support a Farmers Market and we would love to continue to be a part of it – despite it being a drawback for our immediate economics. Ultimately, by supporting the Market, it means we are being a part of something precious in Spearfish and we’re sticking with it.
Last year we expanded our distribution to include wholesale to a restaurant and a grocery market. By getting local produce into markets and restaurants, we’re making locally grown food available to more people than we reach through our direct outlets – which feels especially good. We found wholesale to be a relatively simple, efficient way to move a fair amount of produce. We took grapes to the Red Barn Market – at a point when the weekly market had already ended, but we were still sitting on bushel baskets of them. The owner/main chef at Killian’s who we work with is creative, enthusiastic, and incredibly flexible, working magic into the menu with whatever we brought him each week. As a couple of beginning farmers, we are truly grateful for the support of our wholesale markets.
A small percentage of our sales are direct from the farm. A big benefit to this market is that it brings people to the farm and gives them an opportunity to see how things are growing and for us to share and answer questions. It’s also usually convenient for us in that we are here already and don’t have to pack up and lug stuff anywhere, however it will be more convenient when/if we get a farm stand set up and establish set shop hours. Although direct from the farm is our lowest volume of sales, sales are mostly to people who are not CSA members and we don’t necessarily see at the Farmers Market.
Some of our especially meaningful successes from 2013 – We increased production despite more challenging weather. With much help from Jeremy’s father, we built a walk-in cooler, which has increased our efficiency and reduced our stress. And as a result, during peak season, we are now running one air conditioner part-time vs. 3 refrigerators full-time. We were able to increase our off-farm time, getting more engaged in events in the community (volunteering at the Bike Coop, planning Bike Week, time with family and friends). And we became a bit more efficient with our sociable time on-farm as well. During our first year of farming we had many, frequent, spontaneous visitors come by to tour the farm, ask questions, chit chat and be all-round excited/curious about what we were doing. It is amazing how fast 2 hours can go when you’re visiting about vegetables. And now consider giving on average 3 farm tours a week. This is something we both love, sharing ideas and engaging with people via the farm is important to us, but as regards managing our farm and time efficiently, this is something we are struggling to find a balance with. During our first season, the frequent visits were partly a treat and great fun, but also distracting and an unexpected time commitment. This past year we did a better job of being courteous and taking time to visit, while maintaining efficiency with farm visitors.
Our biggest challenges, shortcomings during 2013 – In part because the season was so truncated by weather, we had fewer on-farm events this past year than we had originally planned. We have already sat down with a 2014 calendar and set aside dates and tentative dates for several on-farm and farm related activities. We’ll keep you posted on the seed swap, food preservation workshop, potato planting, weeding and harvest parties, farmer Jeremy’s big 30 birthday bash, and more. We did not get as much work done on the greenhouse as we had planned. Access to a good source of clay continues to limit progress on the cobbing and plaster of the straw bale walls. A significant challenge we are having is making our produce accessible to a wider, low-income market. Making good food accessible to everyone is something we are passionate about. We are working out a way to both meet farm expenses and provide affordable produce – and we are very open to suggestions.
Our most successful crops for 2013 - Summer squash, snow and snap peas, chard and lettuces did well. We had a great potato yield and absolutely stunning cabbages.
Least successful crops for 2013 - We are still struggling to get good crops of beets and cilantro. Over half of our garlic rotted in the field this spring. We lost our entire crop of popcorn to the early snow in October. The short season also meant most of our winter squash did not ripen to maturity.
Goals for 2014 - This next year, we’re going to put special efforts towards more efficient production, increasing yield from our bed space through planting schedules and successions, especially in the greenhouse. We hope to increase involvement with our community through on-farm and off-farm events, educational workshops, work parties and farm tours. We are looking forward to being more proactive in facilitating or opening dialogues on building local economy, small-scale, place-based agriculture, sustainable/adaptive technology, and adaptation as regards climate change. Already this year, we have started implementing better organizational structures for managing calendars and recordkeeping. In the past our recordkeeping system has been an accumulation of scraps of paper, old receipts, several notebooks, spreadsheets and calendars. Enough of that. And finally, we’d really like to get the outdoor kitchen/vegetable wash and prep area all set up and functioning this year.
We are looking forward to 2014: building on the good, figuring out the puzzles, and learning throughout. We will be planting in the greenhouse next week and soon we’ll be filling CSA shares. The field crop rotations are more diverse this year and we have our plans laid out for more efficiently utilizing space throughout the season, two or sometimes three crops out of a single bed. And maybe just because we feel like the farm is starting to blossom, we’re putting in an additional seventy feet of flower beds.