A farm is very much like an investment portfolio. A good portfolio does not have one stock or all bonds. It does have diversity. A mix of investments that offer a net gain in returns even if one or several of the investments do not. A farm that is only invested in 2-3 things is very vulnerable just as a investment portfolio invested in a couple of investments is vulnerable. Some argue the greater the risk....the greater the reward. There is truth to that but the greater the risk the greater and harder the crash :) Unless of course you are deemed to be too big to fail......... If farms look at their operation as an investment portfolio, which the farm really is. A good farm will spread the risk over several ventures. That is difficult for the new farmer as each new area of investment on the farm has signifigant cost that is covered from a limited piggy bank. Starting out IMO and practice start with one thing and develop it. I break our investments roughly into the rule of 20. 20% Pork, 20% Beef, 20% Poultry & Eggs, 20% Fruits and Vegetables and 20% Value added products. The risk is spread out over 5 distinct areas of farm production. Some offer fast returns on the investment and others are very long term before they yield a return. Cattle are the long term 3 year T bonds of the T5R, pigs are the mid term investments that yield a return in 10-12 months, Poultry is a wild card of sorts as it takes 5-6 months from a hen coming out of an egg until she lays her first egg, Meat birds ont he other hand finish up at 12-14 weeks, Fruits take on average 4-5 years before they produce fruit but vegetables are ready as soon as 21 days. Value added products like jellies and jams, cakes, pies Cinnamon Rollz etc are somewhat novelty items but also popular items. It seems most folks focus on weekly sales, it is it would seem be human nature to focus on the short term and the right now. Again in my opinion it is good to note weekly sales but not become absorbed in the short term. I pay more attention to Monthly sales and a great deal of attention to quarterly sales and Annual sales are the main attraction in my mind. The annual number give the whole picture fom January 1st to January 1st. That is not to say the Daily, weekly, monthly and quarterly numbers are not valuable, they are however just snap shots of small time segments. If you look and see a really good week and base you future actions/investments on that one week you are misleading yourself. Just as if you look at one very bad month and change your actions based on that very narrow snapshot you have again mislead yourself. As the farm ages you can start comparing years and seeing the trends form. These trends differ from farm to farm and are actually quite unique to each individual farm. It is invaluable to be able to sit down at my desk and pull out 14 years worth of documents, graphs and data and look at the progression of the T5R but more importantly to look at the long term trends that have formed and established over the years. That data is pretty harsh and cold and does not lie. It tells you when and where things did well or not, it tells you where you fell short or rose up, it tells you where you need to increase production on one thing and reduce in another. That data also tells you what demographic groups you appeal to and which you ones you dont. Demographics are important in this business and to local and regional food as a whole. 84% Women 12% Women and Men that shop together, and 4% Men. Our average customer is 35-50 years old and middle class. Our customers are overall well educated and ask good questions as well as provide important constructive criticism, the majority are middle of the road politically with some hardcore liberals and conservatives. 3% of our customers are minorities and that is something we are working to change. It makes zero sense that a minority owned farm only has 3% of its customers who are minorities. 15% of our customers are low income again something we are working to increase and improve on. Minorities and Low income folks are the most neglegted demographic in local and regional food in this region. Farmers Markets are viewed as elitist organizations that cater to upper income white folks. I mean no offence to anyone in saying that but that is the reallity. Markets really screw the pooch by alienating large segments of the population. 95% of Americans eat meat at least once per day, most farmers markets continually promote their produce vendors 99% of the time and cater predominatly to the Liberal side of the political spectrum, to the above average income demographic, and to the vegan/vegetarian crowd. Again no offence intended just the way I see it in the bigger picture. LOL When I brought these issues up a couple of times at various markets, I heard things like If you dont like the way we run our Market start your own. LOL so I did :) Politics has no place in local and regional food! Farmers Markets should be inclusive organizations not exclusive good ole boy clubs. Local and regional food should be affordable for everyone and help folks stretch their food dollar. Not create BS one liners to justify high prices. A farmer should work harder to earn more not participate in a rigged system to work less and charge more. The top 10%-20% of income ranges is a very small pool of potential customers and at some point (That point was reached long ago in SI) that demographic market gets saturated. Then the protectionism begins with the old guard and so called elite vendors protecting what they believe to be their sacred market share. Then they get all pissy when you explain what you do and why you do it. I love it when someone accuses me of trying to gain market share........ Well no shit! Any business farm or otherwise wants to increase their market share, myself included :) When we look at expanding the market share in this region we need to look at expanding in terms of increasing the number of people priced out of participation, open more inclusive farmers markets that openly welcome all farmers and consumer demographics. Create welcoming inclusive environments rather than more elite cliques. The last thing a farmer should ever hear from a farmers market is We dont want your kind in our market. Sooner or later you will say that to the one Farmer that does not dry up on the vine and go away :) All of these things play into the Farm Portfolio and things to consider as the investments are made and adjusted. All of these things are things that have to be considered. Knowing who your customers are, knowing what products sell at different times, knowing what market areas are friendly and which are hostile and protectionist, and when to divert effort and resources from one area to another to stay viable and in the black, and still serve your customers to the best of your ability to meet their wants and needs. Whether you like the Thunder 5 Ranch or not we are a very successfull farm and business and we are going to be around for a very long long time. We have a solid set of core principles, we are inclusive rather than exclusive, I dont create BS to sell products and do not rely on gimmicks to improve our sales. And I will put the quality of our products head to head against anyone elses. We constantly work to improve the products and do not settle for Good Enough The customer no matter who they are or how well off they are or are not always comes first. These are things all of the farms that make it have in common. These are the things that make it possible to stand the test of time. 14 years is not that long but it is 10-11 years longer than the average small farm start up last :) So I must be doing something right ;) Have a great day folks!
Posted on: Fri, 26 Dec 2014 17:27:40 +0000
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