developing a small farm - university of delaware a small farm ... extension fruit and vegetable...
TRANSCRIPT
Developing a Small Farm
Your plan for success
Dr. Gordon Johnson, Extension Fruit and Vegetable Specialist
University of Delaware
Laurie Wolinski, Extension Educator, Risk Management
University of Delaware
Components of a Beginning Farm
Plan
• Mission - Vision
• Goals
• Resources
• Enterprises, Production
• Markets, Marketing
• Management
• Costs/Returns
• FinancialsLAURIE WILL GIVE MORE DETAIL
Mission - Values
• What do you value?
• How do you
incorporate your
values into your plan?
LAURIE WILL DETAIL HOW TO
DEVELOP YOUR MISSION
Vision Statement
• What do you want to
be
• How do you
communicate that to
others
LAURIE WILL DETAIL HOW
TO CRAFT A VISION
Current Situation and Taking Stock
of Your Resources
• Assets
• Liabilities
• Financial resources
• Human resources
• Physical resources
• Natural resources
Family and personal needs and
concerns
• Current satisfaction
• Risk taking
• Hopes and concerns
• Income goals
• Preferences
• Future
Goals
• What do you want to
achieve?
• How are you going to
reach your goals?
• Short term
• Intermediate term
• Long term
Income Goals
• Children’s Project– College Fund
• Hobby Business– Extra Cash
• Partial Income– Supplement
– Half (second income)
– Retirement income
• Full Income– Primary family income
– Sole family income
Deciding on Small Farm Enterprises
• Choices
• Secure market
• Market volume
• Price, price guarantees
• Production practices– How to produce
– Special production needs
– Adaptation to your area
• Cost of production
• Net Returns
List Products That You Want to Grow
and Market – Enterprise Selection
EXAMPLES
• Vegetables
• Herbs, Medicinals
• Cut flowers
• Small fruits
• Tree Fruits and Nuts
• Greenhouse crops
• Nursery crops
• Craft crops
• Other specialty crops
Pole Lima Bean Budget 100 feet Variable Costs
Variable Costs Unit $/Unit Unit/100 ft TotalFertilizer - KCl lb $0.24 4 $0.96Fertilizer - Urea lb $0.40 0.6 $0.24Fungicide - Agri Fos pt $15.49 0.1 $1.55Gas for Tiller gallon $2.70 0.1 $0.27Herbicide - Glyphosate quart $14.78 0.033 $0.49Insecticide - Bifenthrin 32 oz $10.00 0.2 $2.00Electric for Irrigation Pump kwh $0.11 2.8 $0.31Labor - Clean-up Trellis Maintenance hour $10.00 0.5 $5.00Labor - Cultivation hour $10.00 0.7 $7.00Labor - Pesticide Application hour $10.00 0.6 $6.00Labor - Picking hour $10.00 5.6 $56.00Labor - Transplant Production and Planting hour $10.00 1 $10.00Labor - Twining and Training hour $10.00 0.6 $6.00Media bag $30.00 0.03 $0.90Pots (styrofoam cups) 25 ct $1.02 1 $1.02Seed seed $0.25 25 $6.25Twine tube $15.99 0.1 $1.60
Total Variable $105.58
Pole Lima Bean 100 ft. Budget, Yield
Dependent and Fixed Costs
Yield Dependent Unit Cost
Bags for sale basket $0.09
Labor - Marketing basket $2.50
Total Yield Dependent $2.59
Fixed Costs Unit $/Unit Unit/100 ft TotalProrate Useful
Life (years)
5/8 Bu Basket basket $6.99 7 $9.79 5 10
Irrigation - Drippers each $0.33 20 $1.32 5 10
Irrigation - Tubing 100 ft $18.95 1 $3.79 5 10
Trellis - Landscape timbers post $3.99 2 $1.60 5 10
Trellis - Posts (4x4x10) post $12.47 6 $14.96 5 10
Trellis - Wire (9 ga.) 171 ft $15.99 1.75 $5.60 5 10
Total Fixed $37.05
Pole Lima Bean 100 ft. Budget, Returns
Price
High Average LowLabor Costs
YieldBaskets/100 ft $28 $24 $20
High 9 $86.08 $50.08 $14.08 $112.50
Average 6 $9.84 -$14.16 -$38.16 $85.90
Low 3 -$66.40 -$78.40 -$90.40 $79.92
Marketing
• Who will be your
customers?
• How will you connect
or reach those
customers?
• What will those
customers want?
• What can you
provide? (Grow)
• How big is the market
(can you reach your
income goals)?
Markets
• Wholesale with middleman
– Grower/shipper channels
– Local wholesale
– Auctions
• Wholesale direct (B to B,
backdoor)
– Restaurants
– Institutional
• Direct On-farm
– Farm stand/farm store
– U-pick
– CSA/Subscription pickup
• Direct Off-farm
– Farmers markets
– Direct delivery
– Off farm store
– CSA/Subscription drop
– Internet/Mail order
Selling to Institutions• School, college
– Farm to school
• Hospital
• Corporate campus
• Government entities
Selling to Local Retailers• Local Markets
• Farm Markets
• Country Stores
• Produce Vendors
• Small Chain
Supermarkets
Selling to local wholesale buyers
• Limited operation area
• Pick up at your farm
• Deal directly with buyer
Selling to Brokers, Packers, Repackers
• Local, regional, national
• May contract for your
crop
• They pack
• May provide harvest
services
• No farm identity normally
if they pack
Selling to Terminal Market Buyers and
Distribution Companies
• Deliver to their
warehouse
• Specific standards,
strict standards
– Competing against
large producers
• Maintain your brand
Selling to Regional Supermarket Chains
or Food Service Providers
• May deal with produce
buyer for the chain
• May deal direct with
produce manager in
each store
• Delivery
– direct to store
– distribution centers
• Farm pick up programs
• Specialty product
companies
Selling to Large Chain Supermarkets
– Warehouse
• All produce must be received at this warehouse facility for distribution to Safeway stores – No direct
farm to store sales.
• A grower must enter a Vender agreement with Safeway, and a vendor number and account must be
established. A cooperative may act as a vender for several farmers.
• A Safeway produce Vendor must have the following:
– 1. A Continuing Commodity Agreement with Safeway, which is a responsibility and liability waiver
– 2. $2,000,000 product liability insurance
– 3. A PACA license for in state and out of a state produce sales, or a business license for in state sales only
– 4. Federal I.D. number
• All produce must meet US Grade 1 standards or higher as defined by the Safeway Acceptable Minimum
Quality Standards, provided to vendor/farmer.
• Specific varieties may be required as well as grading and packaging standards defined by Safeway.
• LIL, Less than a Truckload Volume” will be accepted at the warehouse, as well as mixed produce loads.
Direct Markeing
• Is direct marketing for
you?
• Opportunities
• Resources
• Personalities - People
• Management
Background and Philosophy
• A community of
individuals or families
pledges to support a
farm (or group of
farms).
• Idea thought to
originate in Japan in
the 1960’s
Organization of CSA’s
• Who runs the CSA?
– Individual farm owner, for
profit
– Cooperative of several
farmers, for profit
– Community owned farm
employing a grower, produces
only for the members
– Non-profit owned farm (such
as a foundation), usually
dependent on volunteers to
do the work with some paid
staff
– Communally owned and
operated farm, the community
members do the work
How is the Farm Supported
• Most commonly pre-paid
shares
– CSA member agrees to pay
at the beginning of the
season
– Farm provides a certain
amount of what is in season
or that is available (box or
basket of produce, one
dozen eggs, one brick of
cheese, for example) at
regular intervals (weekly) to
each member according to
their shares.
Other Potential Member Support• CSA organization
– Specific responsibilities
– Administration
• Assist with production
labor on farm
– CSA work day
– Specific job assignments
• Assist with packing and
distribution
– CSA packing day
– CSA distribution day
• Record keeping
• Communications,
newsletter, promotion,
recruitment
• Goal setting
• Apprenticeships,
internships on the farm
• Youth projects, family
projects
Direct marketing small scale
livestock products
• Eggs
• Holiday Turkeys
• Pastured, grass fed,
organic
– Poultry
– Goats and sheep
– Beef
• Freezer pork
• Rabbits
On-farm, restaurants, farmers markets,
butcher shops
Marketing Plan
• Market analysis
– Customers
• Targets, demographics
– Sales potential
• Market needs, trends,
growth potential
• Competition
– Product Position
• Local, natural, organic,
fresh from grower,
unique, etc.
• Marketing Strategies
– Pricing
– Distribution
– Advertising
– Customer Service
• Sales forecast
– Yearly
– Seasonal
– Monthly
Assessing Overall Costs, Returns, and Profits
Per market
day or
delivery x 20
times
Estimated
Estimated
Value-added products
• Changing what you produce in ways to make it worth more
• On-farm processing
• Production systems –organic
• What else can you do to add value to what you produce?– Creations
– Presentation
– Variety
– Identity
– Information