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Farming in the Foothills

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.


From a practical standpoint, there are advantages to staying small.  On a small farm, the farmer can pay close attention to details that might be lost on a larger operation – details like soil protection and pest detection.  Wendell Berry writes that a farm is sized correctly if it can be cared for by the farm family and perhaps by a few seasonal employees.  Obviously, this definition means that a right-sized farm will vary depending on the crops produced.  For example, our family can properly care for 400 ewes with a minimum of outside help.  On the other hand, five or ten acres of vegetables might be the correct size for another operation.

Perhaps by necessity, smaller-scaled farms also have more direct contact with their customers.  With fewer units to sell, small farms are driven to maximize their profits per unit, which often means direct marketing.  This direct connection means less time between harvest and consumption, which allows small farms to market fresher, better tasting, and more nutritious fruits and vegetables.  As a small farmer, I focus more on feeding my neighbors and my community than on the oft-repeated focus on “feeding the world” espoused by the proponents of industrial-scale agriculture.

The romantic notion of making a living from 100 ewes or an acre of mixed vegetables, however, quickly runs up against the realities of scale.  Small producers typically have higher unit costs for purchasing supplies, obtaining processing services, transporting products, and other inputs.  In some cases, these higher unit costs on the expense side of the ledger partially or totally offset the higher per unit revenues that result from direct marketing.  In other words, I receive more per lamb marketed than my large-scale counter parts, but my expenses per lamb are greater as well.  Size is related directly to costs.  For example, the harvest cost for a lot of 19 lambs is $25 per animal.  For 20 lambs, I only pay $20 per animal.  A semi load of lambs (400 or so), would cost even less to process.  Similarly, a bale of alfalfa costs $14 at our local feed store.  If I buy a ton of alfalfa, I save 10 percent.  If I purchase a truck and trailer load, the hay costs just $8.50 per bale, and it’s delivered to our place.
In addition to advantageous economies of scale, large, industrial-sized farms make efficient use of capital, mostly in the form of equipment.  Large farms substitute cheap fossil fuel and machinery for labor.  Jobs that a small farmer might do by hand (like weeding the string beans) can be accomplished by a $40,000 tractor and cultivator.

Finally, scale matters to customers, too.  Buyers like restaurants and retail grocers would generally rather purchase food from a handful of sources rather than from a greater number of small farms.  The Farmers Diner, a small New England chain of restaurants committed to buying from local, small-scale producers, can’t afford to pay $7.50 per pound for bacon from a farmer just down the road (the price the farm received for bacon at the farmers’ market).  Says Bill McKibben in Eaarth, what Farmers Diner owner Tod Murphy “really requires is not huge commodity producers or small, incredibly wonderful gourmet farms.” Murphy tells McKibben, “What I need are 1950s-size farms” – the mid-sized farms that have disappeared in the last 30 years.

Economically, a farm is “profitable” if its revenue per unit sold is greater than the direct costs of producing each unit.  For me, I earn a profit if I can sell my lamb for more than the cost of feed, veterinary care, shearing and processing.  Once a farm can sell each unit at a profit, the farm family must determine its total income needs (for things like living expenses, overhead costs, health care, retirement, etc).  Is the farm a part-time occupation?  Does the family need to derive one or more full-time salaries from the operation?  In other words, the farm must operate at a scale that covers its production expenses and its overhead, and that produces a profit for the farm family.  While this scale varies by the type of operation and by the farm family’s needs and expectations, it is a question that must be answered correctly for the farm to stay in business.
In our case, farming represents about 80 percent of my working hours.  Logically, the farm should generate 80 percent of my income.  At our current size, it does not – the majority of my income comes from consulting contracts.  What, then, are my options for making my farm pay me a full-time wage?

Our primary activity is the production of grass-fed lamb.  We started our business with 27 ewes in 2005.  Today (2011) we have approximately 100 ewes. Experience suggests that I could manage 3-4 times as many sheep without a significant increase in labor or land expenses.  Economics analysis suggests that 400 ewes would produce enough lambs to generate both a salary for me and a profit for the business.  My conclusion is that we are not yet operating at the proper scale, given our goals and financial needs.

While small farms may represent a way to invest labor (instead of or in addition to capital), capital costs take center stage when considering any expansion. The typical return-on-investment analysis is not a sufficient gauge of success on its own.  As a small farmer, I don’t have much capital to invest in my operation.  I do have my time, knowledge and skills, however.  Consequently, I’m far more concerned with how much a specific enterprise or activity will return per hour of my labor.  That being said, once I’ve learned the skills necessary for an enterprise, it may make sense to invest enough money to increase the scale of our operation.

Much of the solution lies in making our national food system more equitable to those who produce our food.  “We need to be willing to pay our neighbors enough to grow our food that they can make a decent living,” says Bill McKibben (Eaarth, p 178).  To be sustainable, agriculture must address three key elements: resource conservation and enhancement, social equity, and economic viability. To ignore any of these three issues is short sited; to ignore economic viability is lethal.  A farm that fails economically will ultimately fail to conserve resources and social equity.  Ultimately, economic viability requires farms to operate at a scale that provides for profitability.

Posted by Dan Macon, Flying Mule Farm
Posted on Monday, March 21, 2011 at 9:24 PM
Tags: direct marketing (5), economics (3), scale (4)

Keeping my ambition in check

One of the things I love most about being a farmer is that I get to work
alone. Because my farm is small, I am the only labor most of the time. For me this is the ideal situation. It is not that I don’t like people. I love people. That is why I go to the farmers market each week. I need the feedback from my consumers to recharge my batteries and keep me focused on what is important:  growing good food. That being said, I don’t want to be with people every day.

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

Posted on Friday, March 4, 2011 at 6:43 PM
Tags: planting (1), scale (4)

A few lessons...

A few weeks ago I was honored to be involved in putting on a food and farming conference in Grass Valley, with keynote speaker Joel Salatin. That name alone drew quite a few people, farmers and eater alike, and overall the day was a great success.

There were a couple things that have really struck me from  that day, and I thought I’d share them with you here. The first take away idea of the day for me was the concept of farming infrastructure that is multiple-use—that is not investing a lot of capital in equipment or systems that are only good for one enterprise and one application, but rather thinking about creating systems or finding tools that can be applied to multiple operations. The second point that really stuck out to me was in the same vein as the first, farm infrastructure should be scalable in both directions. We were pushed to think about infrastructure that can flex and change as the demands of your operation change, as you make decisions to expand, or the even more challenging decision sometimes to scale something back. Of course there will always be some necessary investments that break these rules, but these ideas have urged me to think about infrastructure investments in a different way than I had before.

The third point, similar to the first two, was not really a new idea, just something that stuck this time and has resonated ever since.  In his final talk of the event, Salatin referred to one of the greatest strengths of successful small farmers, like any other entrepreneur, is being able to identify our weakness and then gather people around us that are able to support us where we are lacking. Joel gave the example from his farm of other members of the family take over where his skills wane, particularly with the accounting, and credited that teamwork is freeing him to do what he excels at and ultimately makes their farm a success. I've found that asking for help can go against our nature sometimes and I've seen how relational dynamics on small farms are quite often strained, but I have also found that it is usually these relationships that make it worth while.

We need to remember this concept as a community as well—as we all work separately on our own operations—we need to remember that we will all be more successful if we are willing to both offer and accept a helping hand.

“A proper community, we should remember also, is a commonwealth: a place, a resource, an economy. It answers the needs, practical as well as social and spiritual, of its members - among them the need to need one another.”Wendell Berry

Posted on Wednesday, February 16, 2011 at 1:38 PM
  • Author: Vanessa Reed

Simplified Farm Records

You've chosen to be a farmer. You want to be outside, the sun on your back and the breeze in your face, working with your crops or your livestock. But your farm is a business, and to succeed, you need to keep and know your numbers. You need a farm record system that is more than just a shoe-box for receipts. There are computerized bookkeeping systems, or you could hire a bookkeeper, but both can be expensive. You need something that is cheap, reliable, easy to use, and fills your needs.

Step back for a second and think about what a farm records system should do. Certainly tax records, but also timely financial records for making business decisions. Good records will help you know your farm is making a profit, or what to change if it isn't. Work-time records will tell you which crops suck up time and return little profit. Are you keeping track of your cash, the check book, and the credit card charges? A good record system will do this as well.

I want to introduce the system I use on my farm. I have come to this system after trying computerized systems (both commercial programs and spreadsheets I built myself), as well as a full double-entry hand system. For the past several years I have used a simplified handwritten system. I keep all my financial and time records in a single 3 ring binder. I write everything down on columnar paper using 27 columns for accounting records and 14 columns for time records.

My sheets are simple: in the financial sheet, starting from the left of the sheet, there is a column for date, and a wide column for written notes. The next 4 columns are for expenditures, broken down by method of payment -- farm checking account, credit card, cash, and the rare occasions I use the family checking account. I write down every time I use any of these payment methods to pay for farm expenses. The next 18 columns are for my expense accounts (“accounts” are simply categories of expenses). These include vehicle expenses, equipment, chainsaws, feed, etc. The last 3 columns are for categories of income (firewood, livestock, etc). In this way I have been able to consolidate all my expenses and income in a single-spreadsheet. I have a similar sheet for time records, with columns for date and comments, and then several for categories of work.

This system can be put together for less than $10. My hand system works for me because I am more likely to write stuff down if I can just pick up my binder and do it – something I try to do daily. But whatever records system you choose, make sure it is comfortable for you – that way you will be much more likely to actually use it!

Allen Edwards, Edwards Family Farm, Colfax, California

 

For more details on this system use the link at the bottom of the page.

Allen Edwards Farm Records essay
Allen Edwards Farm Records essay

Posted on Monday, February 7, 2011 at 2:09 PM

Skills

While my wife and I have raised sheep for nearly 20 years, we've been doing it a commercial scale since 2006.  As part of a team that puts on a beginning farming class, I recently looked back at how we got started in the sheep business.  This formal look back helped me to realize how much I didn't know when we started Flying Mule Farm.
So much of small-scale farming is skill-based.  Farming takes an immense amount of knowledge, yes; but it also takes a wide variety of physical, observational and mental skills.  For example, take stockmanship - the ability read, understand, and handle livestock.  A good stockman understands livestock behavior and is able to quickly observe subtle changes in this behavior.  A ewe with droopy ears, for example, may be sick.  A restless, pregnant ewe may be getting ready to give birth.  Animals that are laying down and chewing their cuds contentedly probably have had enough to eat.

We purchased a small group of feeder lambs when we first moved to Auburn in 2001.  They were extremely wild - so wild, in fact, that we took to feeding them in a small pen so that we could be sure to catch them when we were ready to have them processed.  The combination of their wildness and our inexperience was probably stressful on the sheep; it was certainly stressful on us!  Fast forward to last November.  Our border collies and I loaded 60 sheep and goats into our trailer in a cul de sac - no fences, no pens - just good dogs and a more experienced stockman.

I've benefited from the experience and knowledge of a number of mentors. Our local farm advisor, Roger Ingram, has taught me a great deal about stock handling and animal behavior.  Our friend Ellen Skillings has helped me understand how to use dogs effectively and how to evaluate the health status of a group of sheep.  Much of what I've learned has come from simply trying and failing (and sometimes succeeding).  Based on what I've learned in the 20 years that we've had sheep, I'm sure I have a great deal more to learn, as well!

The practical aspects of sheep-raising, I think, must be learned by doing. College courses, workshops, and other formal situations are useful introductions, but real skill development comes through repetition and through trial and error.  I suspect other types of farming are similar.  While these skills were once passed from one generation to the next when kids worked alongside parents and grandparents, most young people who are interested in farming today don't have this opportunity.  To me, on-farm internships and apprenticeships are critical in filling this need. Unfortunately, the informal system of farm internships is threatened by legal issues surrounding compensation and workers compensation insurance.  Hopefully, educational institutions (like community colleges and nonprofit organizations) will partner with farms like ours to provide this experiential learning opportunity to more aspiring farmers!

Note: Special thanks to fellow farmer Mary Yates for these great photos!

Dan Macon, Flying Mule Farm, Auburn, CA

Posted on Tuesday, January 18, 2011 at 2:52 PM
Tags: internships (1), sheep (6), stockmanship (2)

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