Growing and Selling Vegetables to a Hungry Market
Overview– Keewaydin Farms History
– In The Beginning– You Want to do What?– Dealing With Disaster
– The New Plan– Crop Selection and Season Extension– The Budget and The Business Plan– Marketing Options Pros and Cons
– Do as I say not as I have done (maybe)
Keewaydin Farm and Field Map
Keewaydin Farms History
• Established as a sheep ranch in the 1850’s by the Drake family
• Bought by Lynford Looker in 1948 and operated as a sheep ranch then dairy farm
Keewaydin Farms History
Farmed with horses until 1958
Keewaydin Farms History
Bought by Richard and Mary Haucke in 1976
Operated as a 60 cow Registered Holstein Dairy Farm until 1996
Keewaydin Farms History
• Became a second generation family farm operated by the Haucke’s in 2005.
Keewaydin Farms History• Operated as a multi enterprise farm
including Dairy, Vegetables, Row Crops, and pastured meats from 2007 thru 2010.
Keewaydin Farms History
• In 2010 Rufus Haucke took full ownership of family farm and changed operation to Annual Vegetable and Crop operation.
In the Beginning
Began reading publications about organic gardening and how to write a business plans
Spent a year or so dreaming about what it may be like to be a farmer
In the Beginning
Lets talk financing options– Yourself– Family and Friends– FSA– Bank– Other• Non profits• Venture capital• Slow Money
Your budget Year 1
Income ???????
Expense ???????
Other Income ???????
Other Expense ????????
Gross Loss or Gain ????????
Debt Service ???????
Funny Money aka Profits
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In the Beginning
• Got a job working for A 40 acre vegetable operation in Viroqua, WI area
• Spent the year working/learning.• Began working with the FSA to figure out how
to buy part of the family farm
In the Beginning• Bought 60 acres
and formed Keewaydin Family Farms and General Partnership between the Haucke siblings (Jessica, Rufus, Jacob)
• In 2005 began vegetable farming on ½ acre.
In the Beginning
Equipment Year one– Home made 12x20 Greenhouse
– Earthway seeder– Wheel hoe
– 2 stainless steal wash tanks– Rented Rototiller
– Computer and Printer– QuickBooks
In the Beginning
• Marketed through farmers market in Viroqua and wholesale to a few coop groceries in Minneapolis and Madison.
• Main Crops where Swiss Chard, and Brussels Sprouts and a few culinary herbs
In the Beginning
January
Febru
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August
September
October
November
December
$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
Income Expense
• All three siblings worked off farm to support living expenses
In the Beginning
• Second season secured an operating loan from bank used to purchase Equipment and supplement cash flow
• Planted 3 acres of garden and made hay off of remaining crop ground
In the Beginning
• Marketed through farmers market in Madison and wholesale to a few coop groceries in Minneapolis and Madison.
• Main Crops where Swiss Chard, celery, Green Top Carrots, Brussels Sprouts, Garlic, Dill, and Cilantro
End of year financials Year Two
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August
September
October
November
December
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
IncomeExpense
• All sibling maintained off farm work. Rufus and Jessica move to part time off farm work
You Want to Do What?
• Working with the FSA the Haucke Siblings bought 80 more acres with the farm buildings, more equipment, a 40 cow dairy herd and received more operating capital.
• Built Swing 8 milk parlor, began renting neighboring land. Planted 4 acres of garden, milked 30 cows, raised several hundred acres of hay, 30 acres of corn and a couple acres of small grains
Adding Animals to Your Farm
Pro
• Adds diversity• Provides Manure for
compost• Can help to bring less
productive land into rotation
• Increases revenue stream
• Allows access to more markets
Con
• Requires constant attention
• Expenses Increase• Less Control of
market/pricing• Requires more land• Requires more
equipment/facilities
Equipment Year 3
• Massey 1100 Tractor• Massey 1135 Tractor• Massey 65 Tractor• Skid Steer• 9’ Grain Drill• 6’ Rotovator• 9’ Haybine• 30’ X 60’ Greenhouse
• 2 Self Unloading Wagons• Manure Spreader• 6’ Brush Hog• 8’ Disk• 4 Bottom Plow• Chopper• Round baler
You Want to Do What?• Marketed Vegetables through CSA in Madison
and wholesale to a few coop groceries in Minneapolis and Madison. Marketed Milk to Organic Valley
Year End Financials Year 3
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hApril M
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August
September
October
November
December
$0.00
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
$14,000.00
$16,000.00
IncomeExpense
Rufus and Jacob work off farm part time. Jessica leaves operation and begins attending College
You Want to Do What?
• 2008 Rufus Haucke started another business called Keewaydin Organics and moved the vegetable enterprise to another farm
Dealing With Disaster
Dealing With Disaster
The Three D’s– Death• Wills, Life Insurance, Clearly defined rolls
– Disaster (Natural and Man Made)• Diversity, Insurance, Determination
– Divorce• Mediation, Operating Agreement, Kindness
You Want to Do What?
• 2008 through 2009 Jacob Haucke continued to operate Keewaydin Farms
• In 2010 Rufus Haucke took over management of operation then ownership of Keewaydin Farms
The New Plan
• Dairy Cows Sold in July of 2010• Focus placed on vegetable operation and
home farm.
The New PlanEquipment List
• Massey 1100 Tractor – 90 horse power
• Massey 65 Tractor – 60 horse power
• Cub B – Cultivating / Planting Tractor
• Assorted Cultivation Equipment– Lewiston, basket,
shovels, hilling discs, rotary hoes
• Flail Chopper• Manure spreader• Chisel• Disk • 4 Bottom Plow• 2 Self Unloading Wagons• Wash Line• Skid Steer• Rotovator• Brush Hog
The New Plan
• Increase soil fertility• Expand annual production to 20 acres• Expand greenhouse production• Develop crop plan that keeps production going as
long as possible• Begin planting perennial crops– Asparagus– Hazelnuts– Chestnuts– Hardy Fruit Trees
Crop Selection and Season Extension
Crop Selection and Season Extension
Crop Selection• Continuous production• A diversity of plant
families• What do you like to
grow• Cover Crops• Perennials and annuals
Season Extension• Heated Greenhouses• Unheated Hoophouses• Storage Crops• Dried Crops• Mini Hoops• Hydroponics
The Budget and The Business Plan
Income ExpenseFarmers Market RentCSA FuelWholesale Vegetables
Labor
Government Payment
Fertilizers
Others….. Freight -meat Repairs and
Maintenance -milk Seeds -Eggs Insurance -Kitchen Others…..
• Use IRS SCHEDULE F• Plan out all 12 months• Continue to monitor
and adjust• Try to be realisticContacts
-Your Accountant-Neighboring Farmers-Your Bank
http://www.irs.gov/pub/irs-pdf/f1040sf.pdf
The Budget and The Business Plan
Cash Flow
January
Febru
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Marc
hApril
May
June
July
August
September
October
November
December
($10,000.00)
($5,000.00)
$0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
Income ExpenseCash Flow
BalanceSheet
Balance Sheet As Of – Current Date
Short term assets
Checking, Savings, Accts Receivable
Mid and Long Term Assets
Machinery, Animals, Land, Stocks, Bonds, Life Insurance
Total…………………$$$$$$$$
Short Term Liabilities
Accts Payable, Operating Loans
Mid and Long Term Liabilities
Loans on Land, Machinery and Animals
Total…………………$$$$$$$$
Equity
Owner Draws, Owner Equity (Assets – Liability), EarningsEquity and liability Total…………$$$$$$$$$
This is the net worth of the business Asset total and Equity/liability total need to match
The Budget and The Business Plan
• The Business Plan– Cover Page with owners names, Contact info and
Business Logo– Table of Contents– 2 to 4 page Narrative– Sections to include
• Company description, Products, Markets, Competition, Description of owners/managers skills and rolls, Use of Proceeds, 3 year growth projections
– Add Budget, Cash Flow and Balance Sheet– Total Page number 7 to 9 pages
CSA
Pro• Money early in the growing
season• Direct contact with
customers• Strong advocates• Allows for diversity on farm
Con• Complicated• Requires people skills• Requires strong planning
skills• High diversity• Lots of communication
Farmer’s Market
Pro• Direct connection with
customer• Social event• Encourages Diversity• Network with other farmers
Con• Unpredictable traffic flow• Prices unstable• Time away from farm• Competition• Equipment Requirement
Restaurants
Pro• Strong advocates• Popular• Utilize unusual items• Promote freshness• Can change menu with
season
Con
• Price sensitive• High employee turnover• Longer payout • Small orders• Require more time to
maintain relationship
Grocers
Pro• Can move good volume• Provides contact with
consumer through promotions and demos
• Good advocates• Anchors of neighborhoods
Con
• Have established relationships
Wholesale
Pro• Hungry market• Can move large volume• Provides infrastructure• Can contract crops
Con
• End customer is anonymous• Might not be loyal• Prices can fluctuate with
market
Institutions
Pro• Purchasing power• Ability to plan volumes• Reliable payment policy
Con
• Demand uniformity• Require product insurance• Require Food Safety Plan
and inspections• Very price driven
Do as I say not as I have done (maybe)
• Use operating capital very carefully• Establish a strong working bond with
all members of operation. Clearly define rolls and stick to the script
• Focus on your soil. Make that #1 in any land purchase decision
• Plan on Making Money from the beginning
• Choose equipment carefully not carefree
• Make time for your self and family