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New Ideas to Diversify Your Farming Operation
Corn prices were low and profit scarce for young farmers Steve Archer and John Rigdon on December 1, 1986. Sound familiar? That was 30 years ago. “It was hard to make money in the 1980s,” remembers Rigdon. “There was no way for a young farmer to expand.”
Eager for new ideas and an adventure, Archer and Rigdon, both from Harford County, Maryland, hopped on a chartered bus and rode 1,000 miles to join 6,000 other farmers from around the U.S. at the ADAPT conference in Des Moines, Iowa. The conference, which stood for Ag Diversification Adds Profit Today, was sponsored by Successful Farming magazine. It was free and so were the bus rides.
Rich Krumme, the editor in chief of the magazine at the time, dreamed up the conference because, “I had farmers calling me and crying. There were letters of desperation and discussions of suicide. There was a feeling of futility.” The Farm Crisis of the 1980s was in full swing by 1986. Farms were going bankrupt at a pace not seen since the Great Depression. Banks were failing. Farmers needed new ideas and new ways of thinking.
“I wanted to get a lot of farmers here and give them hard facts they could walk out with,” says Krumme. “I wanted to motivate people and give them hope. Maybe they’d go home and do something positive.”
The conference offered 100 topics about ways to diversify your farm. The lectures were straightforward, and the speakers (most were farmers) covered the problems as well as the benefits.
Make a Switch
Rigdon, the 11th generation on his family farm near Jarrettsville, came home and added pick-your-own pumpkins and fall ornamentals to his corn and cattle farm. He tapped into the growing Halloween craze, now a huge holiday.
Archer, a livestock producer near Darlington, switched from selling commodity hogs and sheep to supplying high-health animals to medical research facilities on the East Coast.
These new enterprises are still going today, 30 years later, and are still profitable.
“I went to that conference and realized that as far as niche marketing, I had a huge advantage,” says Archer. “I had more people with disposable income nearby. I came back thinking, ‘I have an unlimited market here; I can sell anything to these people.’ ”
Archer’s wife, Raine, says she was glad when he read about the ADAPT conference in the magazine and decided to go. “Farmers just keep doing the same thing because they are too busy to network,” she says. “Hearing new ideas gets you energized and makes you successful down the road. It makes you happy in your life because you’ve been pushing the envelope a little bit.”
Rigdon Farms, founded in 1728, switched its cattle operation eight years ago to raise grass-fed beef for Whole Foods. No antibiotics or growth hormones are used. Every package of meat at Whole Foods is labeled and given an animal welfare rating, says Rigdon. “If I want to get the top score, I can’t castrate. Well, I can’t have 100 bulls running around, so I don’t get the top rating.”
The Rigdon family (son Harrison, 29, runs the day-to-day operations) farms 2,000 acres of corn, soybeans, wheat, and barley at seven locations. “The last eight years, we went more into corn and beans because it was a very good business,” says Rigdon. “There’s hardly anything we could have done that would be more profitable and easier than corn at $8 a bushel and beans at $14 a bushel.”
Those days are over, at least for now. “It sure doesn’t look like farming is going to be good for four or five years. I’m questioning if we are going to continue renting ground,” says Rigdon. “People don’t want to lower rents. Once they get used to making $250 to $300 an acre, they don’t want to back up.”
The family sells a lot of hay to the horse market, as well as fresh seasonal produce such as asparagus, rhubarb, blueberries, and pumpkins. That diversification goes a long way when commodity prices are low.
“Farmers like to stick with things they are doing,” says Rigdon. “I don’t know how many times I’ve heard farmers say, ‘that’s the way Daddy did it.’ Well, that was probably a really good idea at the time, but that was 50 years ago, and it may not be such a great idea now.”
Archer will continue raising livestock for research, a business he can’t discuss except to say, “It has value and meaning to people. You have a relative alive today because of this research.”
The advantage to farming on the East Coast is, he says, there are huge markets to tap. “I have a lot of different ways to go with marketing the product.”
7 Steps to Diversifying
“Work, and plenty of it, is required for success,” wrote Kansas farmer Ralph Spiegel, now deceased, who took a bus from Salina to Des Moines for the ADAPT conference in 1986. He wrote a report for his local newspaper when he returned home. Spiegel listed seven steps he saw as the route to follow when starting a new farm venture:
- Recognize a need or market.
- Learn about the product, its uses, and production.
- Talk to other producers about problems, solutions, costs.
- Secure adequate capital.
- Be prepared to work.
- Be prepared for errors.
- Hope for a bit of luck.
“I have been asked what I learned at this conference,” wrote Spiegel. “The first and most emphatic lesson was that the family farm has a far greater potential than just cattle and hogs, or wheat and milo. There is not a bright future in producing surplus farm products.”
The markets for alternative enterprises must be researched and pursued, Spiegel continued. “The producer must become the seller, and must promote his products. Quality should be high and constant, and supply should be adequate and reliable.”
New Ways to Make Money
Steve Yates, an adult agricultural instructor and farmer in Monroe City, Missouri, was in the crowd of 6,000 in 1986. “After coming home, I did a presentation for people in my community,” he says. “It taught me to think outside of the box. Shortly after attending, my family started growing garden mums.”
The lessons continue 30 years later for Yates. “More recently, as a teacher in my school district, with the help of others, I have promoted raised bed gardening as an alternative to both conventional gardening and purchasing all their produce. About 90 people in my area have started raised bed gardening since the original class.”
Joyce Liggett flew to the conference from California. “One idea presented was to plant turnips in the corners of pivot irrigation. We owned three farms in Nebraska and I could not convince the tenants to try it, but I am still glad I learned about ways to diversify. I have remembered the ADAPT conference all these years as a very informative and interesting experience.”
Trying Lots of Ideas
Duncan Smith, a dairy farmer in south-central Missouri, didn’t go to the conference, but he got the message. He added a pumpkin patch to his dairy farm in 1998, started leasing hunting rights to his property in 2009, added cheese and yogurt production in 2012, and began raising hair sheep in 2013.
“I’ve probably failed more than I’ve succeeded,” admits Smith. “But I have had some success. The pumpkin patch is doing well. The hunting has developed into a revenue stream.” He quit making cheese and yogurt because of the work and stress involved.
The need for new ideas is apparent again today, as commodity prices sink to unprofitable levels. A Kansas farmer called Successful Farming magazine this fall looking for ideas. Two sons want to join the farm, which is close enough to Kansas City to consider direct sales. They are interested in growing non-GMO soybeans and other grains. They want contacts.
Beware the Alpacas
The first step in adding an enterprise is to make sure there is a growing and sustained market for the commodity. Consider the alpaca market bubble burst, says Joe Parcell, chair and MFA professor of agribusiness, University of Missouri. When the price is high and alpaca farming profitable, everyone wants to raise alpacas. “The problem is, demand is rather small, so a little extra supply of alpacas drives down the price quickly,” he explains.
The same for the sorghum market, says Parcell. In early 2015, sorghum traded at a considerable premium to corn. Then a lot of farmers planted sorghum chasing that price. By fall, the sorghum price tumbled. “The lesson here is to have a marketing contract or to align where you have a comparative advantage.”
An example of moderate success is canola in Oklahoma. Many producers in that state carved out a niche for several years. “Sometimes the alternative crop saves on costs in other parts of the operation, as canola helps with weed control,” explains Parcell. “It does not always have to be about the value.”
For value-added enterprises that require direct marketing, you need to be a sales manager who just happens to own production assets. “Those successful in marketing local products typically will have strong sales skills,” he says. As a producer-marketer, you must understand the lowest-cost method of providing the maximum value to the consumer.
There are four keys to building a successful brand, says Parcell.
- Have consistent product quality.
- Have product available whenever the buyer wants it.
- Give great customer service.
- Be able to sell, not just tell, the story of farm to fork.