Planning for Profit Cultivating an Economically Sustainable - - PowerPoint PPT Presentation

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Planning for Profit Cultivating an Economically Sustainable - - PowerPoint PPT Presentation

Planning for Profit Cultivating an Economically Sustainable Hightunnel Scott Thellman About Me Owner of Juniper Hill Farms, LLC Senior at Iowa State University Agricultural Business Agronomy Agricultural Entrepreneurship


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Planning for Profit

Cultivating an Economically Sustainable Hightunnel

Scott Thellman

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About Me

  • Owner of Juniper Hill Farms, LLC
  • Senior at Iowa State University

– Agricultural Business – Agronomy – Agricultural Entrepreneurship

  • Agricultural Entrepreneur
  • Interests in post harvest handling,

marketing, storage, and distribution of local and regional foods.

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Background

  • Raised in Lawrence, Kansas.
  • Moved with family to rural Douglas County,

Kansas in 1999.

  • Became interested in agriculture.
  • Began working at different agricultural
  • perations in the area as a teenager.

– Sweet corn, vegetables, cattle, row crops

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Background

  • Became interested in

starting my own farm.

  • Purchased some old hay

equipment with savings from summer jobs.

  • Baled 20 acres of hay in

2006, and sold it quickly.

  • Saw my opportunity to

enter into farming!

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Background

  • Expanded hay operations

throughout high school.

  • Graduated high school in 2009,

and produced 10,000 small square bales that summer.

  • Entered into vegetable
  • perations in 2010 with the

construction of our first high tunnel.

  • Started schooling at Iowa State

in the fall of 2010.

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Background

  • Constructed second high tunnel in

2011, and grew on one acre.

– Primarily marketed crops at farmers market’s.

  • Expanded to two acres of

vegetables in 2012, and focused on direct sale to grocers and restaurants.

  • Partial USDA Organic Certification
  • f farm in 2012.
  • Increased hay production to 500

acres.

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SLIDE 7

Today we…

  • Produce 900 acres hay and alfalfa.

– 1,300 round bales and 5,000 square bales in 2013.

  • Grow four acres of USDA Certified

Organic vegetables.

– Serving one wholesale customer, five grocery stores, five restaurants, and one food bank.

  • Harvested over 20,000 lbs of produce for

fresh market distribution in 2013.

  • Provide agricultural consulting

services, hay and vegetable brokering services, and custom hire services to over 100 customers around the region.

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Crops We Grow

  • Hay and alfalfa
  • Small grains and

soybeans

  • Hops
  • Vegetables

– Tomatoes, potatoes,

  • nions, bell peppers,

beets, head lettuce, leaf lettuce and greens, cilantro, kale, beets, radishes, zucchini, squash, and more!

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SLIDE 9

High Tunnels!

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“High tunnel production is not as easy, profitable, or beneficial as you might

  • think. You really need to crunch your

financial figures to ensure success.” “Without the proper preparations, you will more than likely not meet your annual projections or make a meaningful return off of your investment.”

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Construction of Our High Tunnel

  • First step was site

selection.

– Limited to commodity crop production area.

  • Selected level area

in creek bottom with high quality soil.

  • Wabash silty clay

loam soils with good drainage and high organic matter.

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Planning for Your High Tunnel

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SLIDE 13

June 14th, 2011

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Planning For Your Tunnel

  • Determine what grows well, what sells well, what

is most profitable, and what you like to grow!

  • Plan to have a quick turn around from crop to

crop.

  • Growing fewer unique items helps increase your

consistency, makes crop and nutrient planning easier, and provides your with more product to sell!

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SLIDE 15

Planning For Your Tunnel

  • Goal: Consistently supply
  • ur customers with in

season produce.

– Meet with suppliers early to determine their demand.

  • Use historical yield and

sales data from farm records.

  • Remember to account for

seasonality, day length changes.

Crop Avg Yield/ sqft Encore Lettuce 0.714 lb/sqft Ovation Greens 0.52 lb/sqft Cherry Tomatoes 13.2 lbs/ plant Radishes 0.85 lbs/sq ft

Ask yourself… How much do I need to grow to meet my current demand? THEN ADD 30%

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Planning for Your Tunnel

  • Form a 12 month plan

– Down to the week!

  • Things to consider

– Crop rotations – Fertility needs of crop – Seasonal weather – Market demand – Sequential planting requirements – Opportunity costs of space – Labor involved

  • High tunnels need high

value crops, and quick turn around to be economically feasible!

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Crop Rotations

  • Use common

agronomic sense.

  • Overplanting/double-

cropping can increase pest and disease presence, and can decrease quality and yields of crops.

  • Spring, Summer Fall

rotations with uses of cover crops if not

  • verwintering crops.
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SLIDE 19

Fertility Needs

  • Take annual soil

samples.

  • Apply compost or

manure during off season.

– Be aware of food safety regulations.

  • Regular application of

fertilizers at proper times in growth cycle.

– Fertigation or foliar application methods.

  • Plant beneficial cover

crops when possible.

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SLIDE 20

Seasonal Demand

  • High tunnels give you an

advantage to season extend.

  • But, be ready take price

breaks to move your inventory.

  • Know your markets, and

what they desire.

  • Market yourself well, and

form long-lasting relationships with your customers.

  • Keep up on consumer

trends and industry changes.

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SLIDE 21

Sequential Plantings

  • Key to keeping your

customers supplied and satisfied.

  • Requires detailed

planning in high tunnels.

  • Remember to account

for day length changes.

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Weather

  • Seasons change!
  • Be ready for whatever

could come your way.

– Row Covers – Ventilation – Opening/closing sides

  • It IS possible to grow

year round without heat if you have the right cropping system and the right tools.

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SLIDE 23

December 20th, 2012

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SLIDE 24

January 6th, 2013

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January 6th, 2013

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February 28th, 2013

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Budgeting

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Budget for Success!

  • Many types of budgets
  • Enterprise Budget – for a single crop or

enterprise

  • Multi-Crop – for an area or specific area of the

farm

  • Capital – for long-term feasibility and planning
  • Whole Farm Budget – for entire farming
  • peration
  • The most useful budgets for High Tunnels
  • Enterprise Budgets
  • Multi-Crop Budgets

Keep in mind that high tunnel crops will have diff t b d t th td if it i

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High Tunnel Construction Costs

Item Cost Hummert Intl. High Tunnel $5,200 End Walls $650 Baseboards $260 Plastic $300 Total $6,410

  • Do not forget the labor costs!!
  • 80+ hours of labor… Not included in costs as much of

it was considered ‘sweat equity’ for the farm.

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Depreciation of Your Tunnel

  • Strait line depreciation
  • Average ownership costs over entire ownership period.
  • Included as ownership cost in enterprise budget.
  • Depreciate structure and plastic separate.
  • Assume 15 year useful life of High Tunnel, and 4 year useful life of plastic.

Strait Line Depreciation = Purchase Cost – Salvage Value Years Owned

High Tunnel Example (20’x96’, 1920sqft): $6,110 - $500 = $374.00 dep/yr 15 Years $374 dep/yr = $0.23/sqft 1613 sqft (84% utilization) Poly Plastic Example (32’x100’): $300 - $0 = $75.00/yr 4 Years $75.00 dep/yr = $0.046/sqft 1613 sqft (84% utilization) Total Annual Depreciation Expense = $449.00 ($0.276/sqft)

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Budgeting Resources

  • Iowa State University Ag Decision Maker (AGDM) –

– Templates for all types of crops, including vegetables and high- tunnel templates. – http://www.extension.iastate.edu/agdm/

  • Kansas State University Enterprise Budgets
  • Excel (easy to make)
  • ‘The Organic Farmer’s Business Handbook’ – Richard

Wiswall

  • ‘Wholesale Success’ (4th edition) – Jim Slama & Atina

Diffley

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SLIDE 33

Record Keeping

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Keep Good Records

  • Record keeping in the

field, and in the office is key to your success!

  • Without history, you

cannot see the future.

  • Yields of crops, sales,

quantities available, peak harvests all are key items to track.

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Record Keeping Resources

  • AgSquared – Crop Planning
  • COG PRO – Organic Record Keeping
  • Quickbooks - Accounting, sales, expenses
  • Excel
  • Employee journals
  • Additional Record Template examples

available (ask me)

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Pros and Cons of High Tunnel Production

  • Season extension.
  • Consistent availability for longer

duration.

  • Upfront cost of infrastructure.
  • Long-term site planning.
  • Opportunity costs associated with

your time.

  • Feasibility of larger scale off-

season production.

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SLIDE 40

You Will Make Mistakes!

  • Do not assume that you

will profit in your first year.

  • It takes many years of

experience growing, marketing, and distribution experience to build a sustainable business model that will benefit your farm, your community, your soils, and you.

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Thank you! Questions?