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Keeping costs on track

Careful cost control has helped this start-up farm survive tough years

If Aaron Sturges didn't obsessively track the costs and returns of every type of flower, fruit, and vegetable he grows, Sturges Orchards and Farm Market north of Pittsburgh might not exist today.

If his wife, Tracie, didn't have a conservative Pennsylvania Dutch heritage that values thrift, they might never have had the $17,800 down payment for the first 20 acres of land they bought in 1989.

Today, their two 30x100-foot greenhouses produce fall mums and spring flower baskets and bedding plants that gross more than $60,000 a year. They own their first 20 acres, and they're buying 40 more. Their roadside stand sells tomatoes, sweet corn, peppers, pumpkins, raspberries, peaches, and apples -- all grown on their farm -- as well as milk from a friend's dairy.

The couple has borrowed to buy land but has used very little operating capital. "We've had a production loan here and there, but they've been as little as possible," says Tracie.

Bedding plants are one of the most profitable enterprises for Aaron and Tracie Sturges. Mostly on their own, the Pennsylvania couple have built a strong fresh produce farm and store north of Pittsburgh.

Vegetables add to income but can't compete with bedding plants. "People don't mind spending $100 on plants, but they'll complain if you charge $4 a dozen for sweet corn," Aaron Sturges says.

Aaron didn't grow up on a farm but enjoyed his grandfather's former dairy as a child. By high school he was leaning toward a career in wildlife biology. At Pennsylvania State University, pomologist Ernest Bergman shifted Aaron's career track. "One of his courses drew me in," Aaron recalls.

He finished college with a degree in horticulture, a minor in business, and lots of confidence. "At the end of my senior year it dawned on me that I could run a farm," he recalls.

His first job was assistant farm manager for Amos Funk, a produce seller in Lancaster County. There, Aaron learned real farming skills like how to drive a tractor. "When you're in college, you think you know everything. Every year after that, you realize you don't know anything."

At Funk's he met Tracie, a cashier at the farm's store. A year later, the two were married and Aaron was managing 1,000-acre Treesdale Orchard, with 250 acres of apples, north of Pittsburgh. Aaron was led to that job by a Penn State professor the orchard used as an adviser. He needed a farm manager and hired his old student.

Aaron recalls with a chuckle, "I was so dumb. How could a kid who was 23 market 100,000 bushels of apples?" He was also responsible for 15 seasonal workers in the apple-packing house, 50 migrant pickers, and a full-time staff of seven.

The couple thrived in their new location. Tracie became a paralegal assistant and worked for the Allegheny County Bar Association while finishing a degree in business administration. They started saving for a down payment on their own farm.

"For about two years we would ride around on weekends to look at different farms," Aaron recalls. "Tracie found this one. I thought it was too small, but it was a good location."

After five years at Treesdale, they bought that 20-acre farm in 1989 with a 20% down payment. They planted vegetables and rented apple and peach trees from Treesdale Orchard.

Tracie Sturges waits on one of many loyal customers, Rosemary Prah (right).

Freshness and variety draw buyers.

Photographs: Doug Hetherington

"We sold out of the garage the first two years to make sure this was going to fly," Aaron recalls. "That was two years that we ate macaroni and cheese. Times were really tough."

In 1990, with a 2% loan from the state agriculture department, they planted 5 acres of apples and 2 acres of peaches. They bought some of the rootstock for 50¢ apiece. Much was given to them by another former Penn State professor.

They cut their own scion wood (branches for grafting) from area orchards. For 2,500 trellised apple trees that would normally cost $10 each, this was a savings of nearly $25,000. The planting was easy, but grafting scion wood onto the rootstock meant two months of stooping or lying on the ground for Aaron and Tracie.

Nor did they take the easy way of building a sales stand. They tore down a three-story chicken house at Treesdale, hired a crew to put up a pole frame and rafters, and Aaron finished it. "Bottom line is we have no debt in the building," he says.

They also started out with a very modest investment in used small tractors and machinery -- less than $7,000. Their greenhouses are also used. In 1997, they were able to buy 45 acres across the road from their farm with a $200,000 loan from the Farm Service Agency. This time they could afford to avoid hand-grafting.

Without their conservative management, the Sturges orchards might not have survived the past two years, which have been rough ones. The record number of hurricanes to hit Florida this year have dumped about 4 inches of rain a week in western Pennsylvania, following a wet 2003. "We've lost raspberry plants. We've lost peach trees, even on well-drained soil," Aaron says.

This follows an even greater catastrophe, a USDA quarantine of a greenhouse last year that was suspected of having Ralstonia on geranium cuttings imported from Africa. The bacteria can be fatal to children with cystic fibrosis, adding to the anxiety of the Sturges family. They have two children: Nathan, 10, and Mariah, 7, who has the disease.

Fortunately, the plants weren't infected with that strain. However, the long delays in lifting the quarantine meant the flowers became rootbound in small pots. "We figure it was about a $40,000 loss," Aaron says.

Aaron has always kept close tabs on his costs. When he applied for the FSA loan, he made his own spreadsheet with Microsoft Works to develop his Farm and Home Plan cash flow projection. He also uses it to track the costs and income from each crop on a monthly basis. And he's working toward weekly updates, using a Palm Pilot to input data to his computer.

"Since I know my costs and I keep fairly good records, when tragedies occur, FSA will work with me on a repayment plan," Aaron says.

He doesn't sell at the lowest price, offering quality and freshness instead. His most profitable vegetable in many years has been pumpkins. This year, greenhouse hot peppers worked well. "We saw our yields and our quality increase substantially," he says.

With his training and experience, Aaron could no doubt manage much larger commercial orchards, but he prizes the time that he's able to spend with his children and his family.

Son Nathan already helps with chores and looks on the bright side even when times get tough. When rains seemed never ending, he told his dad, "At least we don't have to move irrigation pipe."

Family is the real fringe benefit to the Sturgeses. "I spend time with my kids. Our bills are paid. The farm provides everything that I need," Aaron says. "I'm not rich by any means, but the time with my family is more important to me."

This is one in a series of stories, Up By Their Bootstraps, that will appear in Successful Farming magazine for the next year. Each story features a young or beginning farm family that is following a business plan to achieve a dream -- raising their family on a full-time farm.

Careful cost control has helped this start-up farm survive tough years

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