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3 Ways to Diversify and Grow Your Bottom Line
Everyone knows to check pockets for spare change before tossing the day’s work clothes in the laundry. It would be silly to throw that money away, especially in today’s farm economy.
Just like in your jeans, there may be hidden dollars in the metaphorical pockets of your farm that could be put to use. It’s time to do some digging.
There’s no need to make new investments. What you need to get started has been in your pocket all along. Pull it out and put it to work for you. Here are three strategies to use what you’ve got right under your nose.
1. Complementary Ag Business
The Freunds are no strangers to diversification. Their three-generation dairy farm in East Canaan, Connecticut, was already home to a greenhouse and farm market when the seeds of a third business were planted in a meeting.
Nearly 24 years ago, the Freunds formed a co-op with other dairy farmers in the area in order to be more proactive about how they managed the by-products of their farm, specifically, manure.
In addition to the members, the co-op invites service providers, ag agencies, and regulatory folks to the annual meeting to talk about crap – literally, Amanda Freund laughs.
“A woman from the Department of Ag, off the cuff at one of these meetings 15 years or so ago, asked, ‘Why don’t you just make a flower pot out of it?’ ” Freund remembers.
At the time, “it was such a pie-in-the-sky idea, I don’t think she really even thought that much about it. She just blurted it out,” Freund says.
But that quick comment was enough to get Freund’s dad, Matt, thinking – and experimenting. He developed products in his wife’s toaster oven and later a used oven in the farm shop. The family used its existing greenhouse business for testing while the group sought grant funding to help develop the new business.
“Our very first grant was from the Sustainable Agriculture Research and Education program, and it was just $700,” Freund says. That small grant gave the team the opportunity to show its potential.
“We had to demonstrate accountability, but each time you do that, you prove that you can really follow through with a slightly bigger package,” Freund continues. Later, they were awarded USDA Rural Development grants and Small Business Innovation and Research grants.
By tackling the issue as a cooperative, the farmers made themselves more attractive to grant providers.
“There is power when you work collectively,” Freund reminds fellow farmers.
The neighboring farm has been able to develop a commercial wholesale composting operation and moves composted manure by tractor trailer.
Today, the family’s CowPots are sold around the country at True Value stores and are available through a number of online retailers. The business has grown to support more members of the Freund family and take up more real estate on the farm. In 2006, CowPots attracted the attention of Mike Rowe and were featured on an episode of Dirty Jobs. They have also been featured on the Today Show.
Growing the company has required thousands of hours of hard work, but it all started because, with some collaboration, the farmers were able to look at something right under their noses with a fresh, profitable perspective.
Learn more at CowPots.com.
Questions to consider:
- What by-products or waste from your current farming operation could be used in a different way?
- Do you have enough equipment to custom-harvest, bale, or spray?
- Is there extra space in your machine shed or shop to rent out?
2. Niche Markets
Today, John Gustafson and his family focus on growing non-GMO or specialty crops on their Byron, Illinois, farm. It hasn’t always been this way.
When he first returned to the family business as the third generation, Gustafson recalls his father using intensive tillage. There was nothing unique about their conventional farm.
“The soils had no life left to them anymore, and we kept losing yield. We had to do more intensive tillage and put more commercial fertilizer on. It was just a vicious circle,” Gustafson recalls.
He knew if he was going to make his living on the farm, the practices needed to be changed.
“About 15 years ago, I got involved with a friend of mine and really started understanding no-till,” Gustafson explains.
After transitioning to no-till, “we really saw our soils come to life,” he adds. From there, the farm continued to gradually stray from conventional practices and commodity crops.
“That’s when we started growing more non-GMO corn again. We started doing it because it was something different to do in the soils, but then we were having great luck growing that non-GMO corn.”
The corn Gustafson was producing was nutrient dense and had great test weights. “But we were just giving it away on the commodity market. We weren’t getting any premium for the quality grains we were growing,” he recalls.
Gustafson networked and began to look for an alternate market. He knew people wanted his products, but it wasn’t always easy to get connected with the right people.
“One year, I grew a whole bunch of cereal rye by accident. I was trying to figure out what to do. I had my shop full of bags of cereal rye. It was coming out my ears!” Gustafson remembers. “We sold a bunch to other farmers for cover crops, but I started to talk to other people I know and they said to go talk to this distillery.”
After meeting, the distillery agreed to buy a batch of rye. Last summer, it released the first whiskey made from Gustafson’s crops. It was award winning.
Word of mouth spreads and the family keeps working to build relationships with niche users. Craft brewers, artisan distillers, and local chefs have taken an interest in Gustafson’s crops. Some are asking questions and making special requests for specific varieties.
Now the farm is 100% non-GMO or specialty crops. The family has formed a sister company called Bear Grains to brand and market its products to foodies and artisans.
“Every time we plant something, we’re actually planting something that is already sold,” Gustafson says.
Learn more at GustafsonFarms.com.
Questions to consider:
- How could you tweak your production practices to capture a price premium?
- What networking events in your area would help you meet users of your niche crops before you plant?
- Could you produce specialty crops with older equipment and eliminate a machinery payment?
Brittany Jones leads a field trip at Richlands Dairy Farm in Blackstone, Virginia.
“What if we did a pumpkin patch and a corn maze?” asked Brittany Jones, after joining her in-laws’ dairy farm in Blackstone, Virginia. Richlands Dairy had hosted a few field trips, but Jones wanted to get serious about agritourism. The milk check wasn’t getting any larger, and the next generation had returned to the family business to raise their own children.
To start, “it looked a lot like Facebook,” laughs Coley Jones Drinkwater, Jones’ sister-in-law, explaining that social media and word of mouth helped the family start to diversify.
In addition to school field trips, the family began hosting an October Fall Festival. Every weekend in October, the farm is open to the public.
“Admission includes the corn maze, we have a hayride, and a kids’ area with various activities,” lists Drinkwater. “We try to gear the activities toward something that’s agriculturally related, but it’s a fun learning activity for the kids.”
One year, children made edible soil profiles with ground up chocolate cookies, pudding, and gummy worms.
The specialized rations fed to each group of cattle are explained at a station where little ones can feel and smell the different ingredients.
Using a tarp, hay bales, and cotton seed already on hand, the team made a cotton seed pit play area.
A petting zoo with some informational resources from American Farm Bureau helps kids – and their parents – learn about common farm animals up close.
As the Fall Festival grew, the Joneses began offering concessions. In recent years, the family teamed up with a local group or organization. Richlands Dairy provides the space; the organization does the rest and gets to keep the proceeds.
Adding field trips on fall weekdays helped make all the agritourism efforts worth it. The extra money helps cover costs and gets kids excited to come back on the weekend with the rest of their families.
“In general, we do $8 per child and adult chaperones. Teachers, bus drivers, and anybody associated with the school are free,” Drinkwater says.
The farm has worked to make sure activities line up with curriculum standards. Each child gets to take home a pumpkin. Drinkwater says she has worked with some schools on pricing and suggests having teachers who face funding challenges look into grants or partnerships with Ag in the Classroom or other ag literacy programs.
Schools are encouraged to bring picnic lunches to eat on the lawn of the farmhouse in the center of the farm.
“Now, we’re booked for field trips every day in October,” Drinkwater says, noting that some days the dairy hosts a morning and an afternoon group.
Bringing so many outsiders to the farm has been a team effort. Everyone in the family works hard to get the most critical farm chores, including milking, done before guests arrive and after they leave.
“The farm has to come first,” Drinkwater explains.
A calendar in the milking parlor used by all employees clearly marks field trips, tours, and open houses. The family has a shared Google calendar with the same dates. Everyone operating equipment knows to be alert for visitors unfamiliar with the farmyard.
Make sure your guests know they are on a working farm. “You must stay in your group and stay behind your tour leader,” Drinkwater tells each class. “ ‘Does anyone want to get squished today?’ Having them answer or repeat back to you and making sure the parents are paying attention is key,” she says.
If you are considering agritourism, “start small. Get your feet wet and figure out what works well for you, and then grow and adjust,” Drinkwater advises.
It’s important to get buy-in from everyone on the farm. Establishing a routine that is adapted as you learn will make the hosting process easier and your field trip more attractive to local schools.
There’s another key team member to keep in the loop – your insurance provider. “I just reached out to our insurance guy and explained, ‘Here’s what we’re thinking about doing. I should probably make you aware of this,’ ” Drinkwater recalls. The agent did a quick walk through the farm, provided a few tips, and gave the family a sign to post by the parking area.
“I think it’s just a rider on our farm policy, and it’s not very expensive, but it’s definitely something you should have,” Drinkwater adds.
Now, the farm has added farm-to-table dinners with local chefs and other producers and is in the process of adding a creamery. A part-time tour guide has been hired. The farm has invested in pedal tractors and other interactive activities. Soon, guests will be able to enjoy an ice cream cone as they learn about the cows and corn.
Learn more at RichlandsDairyFarm.com.
Questions to consider:
- Do you have space that could be converted to an AirBnB?
- Would a corn maze have a higher ROI than traditional harvest timing in your smallest field?
- What materials do you have lying around the farm that could be modified for guests?