Managing risk in an inherently risky business, part 2

Growing For Market

By Brett Grohsgal

In the October issue, the author critiqued conventional approaches to risk management in farming. He then explained his own integrated approach, which include flexible marketing, diverse cropping and respectful resource management.

Flexible marketing is fine. But we must have goods to sell regardless of the extremes of weather. Diverse cropping, the hallmark of traditional self-reliant farms, is a time-proven answer to the hazards of winter and summer, of drought and of flood.
I’ll first acknowledge the negative aspects of diverse cropping that we experience:
•We cannot strike it rich with a huge single crop even if specific market demand is very strong;
•The time and labor is dreadful for carrying the 25 genelines of tomatoes and three kinds of watermelons and 8 species of herbs and 80 varieties of flowers and countless winter brassicas that we farm. Yes, we are committed to planting, growing, harvesting, and marketing in all 12 months. But this takes an inordinate amount of juggling, and occasionally we drop a ball, occasionally a crop is neglected.
•There are few economies of scale when growing so diversely. As we’ve spread out into more and more crops, our initial simple plantings of 3 acres of tomatoes and 3 of watermelon and 3 of cut flowers and a final 3 of squashes have shrunk. We crop substantially more acres these days, but we have rearranged our fields into plots that can be profitable while as small as 3,000 square feet (e.g., carrots or an intensive mesclun bed) or as large as 5 acres (sunflowers).
The advantages of diverse cropping, though, are too many to ignore.
We always have freshly harvested goods for market, and at times the market has no other local growers. The biggest example of this is our winter cropping, covered in the GFM of August and September 2004. We certainly didn’t invent radical winter cropping. We only modified a cold-season growing system that was widespread a century ago from Florida to Long Island and Pennsylvania. But these 20 acres of leafy greens and savory roots and sweet onions and all their kin now bring us about as much income as all the summer crops combined.
The other smaller and sometimes sequential plantings we do throughout the year can also contribute surprising amounts to our bottom line. These sources of black ink can surpass the profitability of “main crops” on much greater acreage. A prime negative example of this are heirloom slicing tomatoes, which we unfortunately market when nearly all other farms in the Eastern U.S. are awash in a flood of tomatoes. In contrast, easy sales are the glorious rule even for such mundane crops as baby turnips and carrots in April or for November collards.
Periodically other local growers will have forgotten about easily grown main-season items that a small but reliable stream of customers want. The market for these can easily flood, but brisk sales and fair pricing dominate until and unless other farmers see the opportunity. Recent examples of these for us have been perennial herbs in the summer and cool-loving annual herbs in the spring.
Diverse cropping keeps our CSA customers, currently a key part of our income stream, happy. It would be easiest to overwhelm our summer subscribers with tomatoes and squash and our winter customers with kales and arugula. But effortless marketing of our CSA depends on growing more than just the easy crops.
Perhaps the most important advantage to diverse cropping is the flexibility we gain in day-to-day field operations. If it rains for three or seven days straight in April, our neighbors are generally worried and tense. They fear falling behind in spring tillage and planting. Not so us. We have many spring plantings, extending over four months each year. We treasure the crops that the old books say should be planted “as early as the ground can be worked.” Many of these crops can, under the right conditions of soil type, moisture, and farmer care, steadily grow when the ground is thawed and only briefly halt progress when the soil inevitably refreezes. Thinning, weeding, or harvesting these crops keeps us profitably at work when other farms are stuck because the early spring rains just won’t stop. And the money comes in a lot quicker than it can if I hop aboard the tractor and till when the soil is too wet. In the late summer, we don’t have to struggle and glean the last low-quality squashes or tomatoes from the fields, to squeeze out a final bit of income. We can forsake such labor because the fall and winter crops (planted in August and September) are going to bring us far more money and market recognition. Growing so diversely also gives us great operations flexibility within each season, especially in the context of pests. We don’t have to pamper and continually spray any really susceptible varieties. We do not have to depend on the sales of prima donna crops, as less picky cultivars are already in the fields and give us better income-to-expense margins.
Finally, by planting many different varieties and species of foods every year, it becomes very easy to develop a mental database of crops, of the winners and the losers, that reduces risk still further. I forget a lot. But never varieties, years, pest susceptibilities, or yields.
The tools that we need for cropping more diversely include
•Farmer creativity. Recognizing that the old ways offer many insights about which crops can be grown in a given region and season. And then advice from Cooperative Extension, older farmers, books, journals such as GFM, and the like can round out the ideas with data on getting these crops to the harvest point using modern techniques.
•Varietal selection and crop genetics. These play an increasingly important role as your regional windows for growing times (i.e., days to maturity) shrink. To illustrate, far northern growers have way fewer tomato or melon varieties that will successfully yield than do I. Conversely, I and the numerous other lettuce growers south of the mid-Atlantic region have at most one or two cultivars that taste good when every summer day tops 95°.
•Proper soil management. This lets us plant crops and get profitable yields at times when all of our neighbors inactive. By heeding our fields’ signs about when we’ve had too much rainfall for wise tractor use, we can actually till more days in each year than can neighbors with the same weather and soil types. I respectfully let our fields tell me when we can run heavy equipment over that productive ecosystem, rather than putting in charge some arbitrary human construct like a calendar or my harried schedule. By ceding control to our soils, our operation gains in the long term: many more crops can be planted over the course of the year, if not today or tomorrow.

Respectful resource management
The last and perhaps most important way that we have found to minimize farm business risk commits us to managing our farm’s ecosystem, especially the soils, with the greatest respect possible. I am not arguing here for any touchy-feely environmentalism that is remarkably out of touch with the need to feed people. Nor do I advocate that we farmers blindly follow the latest policy dictates on increasing biodiversity, on sequestering carbon in our soils, on re-foresting our stream areas, or on whatever new ecological imperative arises in the halls of academia or politics over the next decade. I am instead absolutely convinced that stewarding our farms with gentle hands and humble perspectives gives greater long-term financial stability than the more domineering rat-race approach that most farms use. Why? Because treating our soils as equal partners in our business has awarded our farm with sustained yields when times are tough. And it is precisely when the weather has thrashed our region –with prolonged drought, with extraordinarily high rainfall, or with extended winter freezes without any protective snow blanket—that we are welcomed with a most appreciative marketplace that will pay nearly any price for the foods we grow. The two forces of good yields and strong markets consistently unite to form the best business insurance I could want. But to purchase this insurance, I need to back off on handling our fields as if only I, or my schedule, were important.
What do I mean by respectful soil management, by treating our soils as equal partners in our farms? It means not using our tractors or harvest vehicles when the fields are too wet. It means tolerating a minimally tilled rough field whenever possible, and viewing with distrust and raised eyebrows the picture-perfect and lawn-level seedbed that we all can attain with more tractor passes. It means avoiding the arrogance of high horsepower, in which our strong machines let us bull our way through too-wet soils. It means incorporating cover crops or fallows into our planting schedules and budgets as intelligent and required investments rather than as neglected afterthoughts. The overriding goal of all of these inconvenient practices is preserving or improving our soils’ tilth. Put most simply, tilth is a measure of the aeration or “fluff” of a soil, with plenty of the tiny pores and channels that plant roots need to breathe. When we till too much or under the wrong conditions, we compress and destroy these air spaces. Crop roots then cannot adequately breathe, and without good roots, we get marginal crops. When farmers mistreat their soils’ tilth, the payback is in times of too much or too little rain. Symptoms of good tilth are some reasonable yield except in the absolute worst droughts or floods. Symptoms of poor tilth are, in bad drought, rock-hard soils or pure dust, and, under high rainfall, mud and flood. It is humans and machines that create mud; you’d be hard-pressed to find this malady in undisturbed grasslands or forests. And the only crop that really does well with this is rice, a food few of us grow.
Too often I have heard colleagues say that they lack the time to treat their soils well, that they must plow today even though it is too wet or that there were not enough hours in the day or dollars in the bank to get in a good cover crop. Yet we have enough time and money to plant our food crops, year after year, and to pretty often see poor yields due to our prior destruction of soil tilth. This is like having enough time to drive and gas up but never making enough time to change the oil or top off the hydraulic fluid. That soil we tread upon and may arrogantly view as passive is in fact a complex interplay of inanimate particles, gases, water, decomposing and living plant parts, microbes, and bigger organisms. This system nourishes all terrestrial life and is beyond the comprehension of any mortal scientist, environmentalist, or farmer. Treat our soils as if they were passive, as if they were under our god-like control, and we will pay a high price. But when we back off on tillage and treat the soil well, this vital player in our farms’ economic future will reward us with stable and better than expected yields.
Other aspects of respectful natural resource management that let us greatly reduce business risk revolve around growing as many of our inputs as we can. Perhaps the biggest contributor to our bottom line comes from on-farm seed production of the vast majority of our adapted food crops, ranging from winter-hardy arugula, mustards, and other leafy greens to highly productive and in some cases disease-tolerant tomato genelines. We buy a lot of seed but grow a whole lot more. Many of the genelines I choose for on-farm production and improvement enable us to profitably crop when the weather is adverse and the produce market is at its most receptive. Purchased seed rarely performs as well, and money has to leave the farm for me to plant it.
The rising costs of fertilizers plague many conventional, low-margin farms – the target audience for flawed risk-reduction approaches such as crop insurance. These high costs do not touch us, and we annually produce many thousands of cases of produce. As noted above, the cover crops vetch and clover provide both improved soil tilth and about 80% of our money crops’ nitrogen needs. Chicken litter from our layers provides the rest, as well as (with residual soil phosphorus) taking care of the crops’ needs for soluble soil P. All of our potassium needs are supplied by wood ash, generated as a byproduct of winter heating for extensive production of greenhouse mesclun, herbs, and transplants. We certainly buy tons of lime and gallons of fish emulsion, but these are tiny expenses in the bigger context.
Actively coping with rising fuel prices is vital to reducing farm business risk. Fossil fuel dependence was tolerable when oil prices were low. But now that crude has averaged more than $70 a barrel for many months, our nation complains ad nauseam and many farmers are facing unexpectedly high fuel bills. Rather than join the din in helplessly protesting these cost hikes, let me present and amplify a counter argument, one that we already hear from many grain farmers. Some of us will benefit from higher fuel prices, and farmers can be at the forefront. The grain growers gleefully welcome a superior future for ethanol, biodiesel, and corn-pellet demand. Indeed, large farms in an energy-hungry world might better be viewed as very efficient solar energy traps (as sunlight is converted into high volumes of grain or biomass) and as potential sites for harnessing wind energy, rather than seen as outmoded producers of livestock feed grains in a market of worldwide glut. That’s fine for the combine crowd – but what about us, the smaller-acreage vegetable, fruit, and flower farms?
I propose this: that low-priced oil has helped a massive flood of cheap foreign products enter the U.S. marketplace. The crops include tomatoes from Europe that are sold in our supermarkets even in August, cheap apples from the Pacific rim nations that inundate American buyers even in September, and asparagus and flowers from Central and South America that are limited by no season. These products and the timing of their arrivals are all borne of very thought-out, targeted marketing strategies. With dirt-cheap labor and shipping costs, subsidies, and freer use of chemicals, most imported agricultural goods enter our ports inherently lower in both quality and price than what we grow here. But the tide is likely turning. The prices consumers pay for imported foodstuffs are already outstripping national averages of inflation. We can thank the rising cost of shipping for this, and I for one welcome the shift. I can compete even better now, and will likely have zero foreign competition when (not if) gasoline hits $4.50 a gallon. And whether it is with the wood that heats our greenhouses, or biodiesel garnered from your restaurant accounts’ old frying oil, or ethanol that our neighboring grain growers can produce, or the solar or wind installations that are much better suited for installing in the countryside than in suburbia or in the cities, American farmers will be able to compete better when energy is domestically produced rather than shipped in at low prices. We farmers are thrifty, we can innovate, and we already control the largest share of our nation’s land and natural resources. Risk reduction in this context means embracing the new energy economy, and making it work for ourselves and fellow American farmers, rather than griping about what it costs to tank up our tractors and delivery vehicles.

True crop insurance
Nearly all of the discussion on agricultural risk management seems to be coming from off-farm experts. Let’s change that, shall we? Many of the topics covered by other farmers in GFM have nicely dealt with specific crop pitfalls and sound, field-proven practices. I hope that this article will trigger some discussion among readers who are commercial farmers, and that you will share your perspectives in Growing For Market articles or in the GFM Letters section.

Our own farm is driven by market, by stewardship, and by our insistence on economic sustainability. Hence we emulate the Washingtons and other successful farmers over the millennia, for whom risk management depended on:
active, analytic, and flexible marketing;
growing a diverse suite of crops that lets us withstand the vagaries of weather and shifting markets; and respectful stewardship of natural resources that minimizes our vulnerability to adverse growing conditions or production costs.
The gold-standard of risk reduction is for us not some insurance policy that takes your check in the spring, sends you money if you fail, and feeds on your dependence. Nor is genuine risk management about federal entitlements that write subsidy checks to farmers under the cloak of less offensive names.
Real farm risk reduction instead focuses on proper farm resource management and on a loyal and diverse customer base. The gold-standard of crop insurance revolves around a suite of diverse crops, skillfully grown, that these loyal customers really want. I urge you to consider this dynamic rather than any newer and less proven ways to minimize risk and keep your farm and your finances growing and vibrant. s

Brett Grohsgal and his wife, Dr. Christine Bergmark, own and manage Even’ Star Organic Farm in St. Mary’s County, Maryland. Brett has previously written for GFM on genetic management and seed saving, winter cropping, shopping for land and soils, and selling to universities.

Know your farmer, know your food