Category Archives: Home-Based Business

What Is the Greatest Challenge to Being A Grass Farmer?

This article is printed in the most recent issue of The Stockman Grassfarmer and written by our good friend, Jim Gerrish.  For more great articles like this, subscribe to The Stockman Grassfarmer.  If you are interested in an upcoming speaking engagement or prefer private consultation, contact Jim.

What Is the Greatest Challenge to Being A Grass Farmer? By Jim Gerrish

MAY, Idaho,

Allan Nation used the term “grass farmer” to describe a new type of agricultural producer who was something beyond the conventional mold of a farmer or a rancher.

The true grass farmer is someone who understands the foundation of our business is harvesting solar energy and converting it into a salable product.

A grass farmer strives to create a healthy landscape where water infiltrates and does not escape the boundaries of the farm as runoff; someone who understands that life in the soil is as critical to farm production as the life above the soil.

A grass farmer understands the fewer steps you put between your livestock and the direct harvest of solar energy, the more likely it is that you will be profitable.

The true grass farmer is someone who becomes one with their landscape and the life within it.  Grass farming has been described as farming in harmony with nature.  This is contrary to many of the basic tenets of conventional or industrial farming where nature is viewed more as an enemy to be vanquished.  Droughts and floods.  Weeds and bugs, Scorching summer and bitter winter.  All of these are aspects of nature conventional farmers and ranchers do daily battle to overcome.

It is very hard for most conventional farmers to understand grass farmers.  For this lack of understanding grass farmers are often ridiculed, ostracized, and sometimes, sadly, beaten into submission to the gods of iron and oil.  Sometimes that conflict is fought in the local coffee shop, sometimes across the neighbor’s fence line, and sometimes across the kitchen table.

That brings me to the consideration of what is the grass farmer’s greatest challenge.

Four years ago, I received an anonymous letter from a frustrated grass farmer.  It was five pages long and it outlines a 30-year long struggle to convert the family farming operation to an entirely pasture-based grass farming business.  The letter writer asked me to somehow tell this story and try to help other farm families struggling with the same issues find some resolution.

I thought about that letter quite a bit at the time and tried to find something to pull out of it for a monthly column.  I came up empty.

Earlier this year, I spent a day with a farm family and when I left, one of the family members put an envelope in my hand and suggested I read the contents some time later,. I did and, lo and behold, it was the same letter I had received anonymously four years earlier.

Now I had a face and a person to attach the story to.  The victim-less crime now had a victim.  How many times do we experience that in life?  Some issue that never mattered an iota to us becomes a cause when it becomes personal.

I think the greatest challenge to becoming a true grass farmer are those family members who cannot see the farm with the same vision.

If your brother is a crop farmer who sees only gross income, how is he going to switch from growing corn bringing in $1000/acre to a cow-calf operation with a revenue of only $300/acre?  That is a very hard sell.  But, why does he have a job in town?  He says he can’t make it just farming.  When the breakeven cost of growing a bushel of corn is $3.85/bushel and the price is $3.46/bushel, a gross income of $1000 doesn’t pay the bills.

If you have a gross margin of $240/calf and it takes you three acres to run a pair year around, the gross margin per acre is $80.  Which enterprise is actually better for the farm?

As long as your brother looks at gross income rather than gross margin per acre, he will never understand grass farming as a viable business.

When you have been taught all your life to till ground, kill weeds, spray bugs, and take whatever price the elevator offers you, it is hard to understand there is another way to use the farm.

If your culture says land must be divided with a 5-strand barbwire fence on the quarter section line, how can you accept weird shaped pastures created with single polywire?  The whole cultural construct must first change.

As long as the mentality is that is it OK to spend $100,000 for a new tractor but you must buy the cheapest electric fence energizer at the farm and home store, grass farming will not move ahead.  As long as the thought process i that the land rental rate is too high to run cattle on that field so we better plow it up, grass farming will never advance.

When farmers can wrap their heads around the idea that Mother Nature is our friend, then grass farming will move forward.  When we truly believe our mission as stewards of the land is to create a living landscape on every acre of ground we manage, then we will become true grass farmers.

Sadly, that is why we still say we advance only one funeral at a time.

Hate to start the New Year with such a downer thought.  Let’s see what February brings.

 

Jim Gerrish is an independent grazing lands consultant provide service to farmers and ranchers on both private and public lands across the USA and internationally.  He can be contacted through www.americangrazinglands.com.  His books are available from the SGF Bookshelf page 26.  He will present a Stockman Grass Farmer Grassroots of Grazing Schooland a Stockman Grass Farmer Management-Intensive Grazing School in February.  

 

 

Fundo Panguilemu, Coyhaique, Chili

I cannot do justice to the sweet hospitality of this young family.  Our Savory Institute journey group is here to learn about the improvements they have experienced using the holistic management techniques.  The grass is thick, lush, and tender – rested paddocks are ready for consuming.

 

 

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Regenerative farm owner and operator, Jose,  (who is also a holistic management instructor) gave us an excellent overview on how they’ve managed their farm and improved the sward and healed the soil substantially in only 6 years using managed grazing of cattle and sheep.
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No bare soil in this thick sward.
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Thick stand of grass after 45 days rest.
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Elizabeth, also owner of the farm and a holistic management instructor keeps all the balls in the air on this stunning cattle and sheep farm/pastured egg laying/horse trekking/firewood gathering/wildlife viewing/fly fishing/mountain biking/yurt accommodation/HMI training site.  Oh, did i mention she also is raising 2 wonderful little children as well as training interns who show up from around the world to help on the farm?
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How about a unique stay on a working farm?! And talk about a view!  Excellent fly fishing available here on the edge of the Simpson River.  Contact Elizabeth at Fundo Panguilemu.
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Lookout Paddock provides excellent overview of paddock layout.  Note cattle and sheep grazing in lower left paddock.
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For my Missouri friends, you will be surprised to know that many of the grasses and forbes are the same as what we graze.  This is a photo of the rose bush that we also have growing, but no multiflora rose here.

Knife Making

Near the end of our homeschooling stint, we discovered a wonderful family who have for 35 years pulled together a spectacular array of historical and educational speakers.  Formerly called CHEF  (Christian Home Education Fellowship), now called Family Covenant Ministries.  

In February 2012, they organised a small group of young men to meet at one of the nation’s premier knife making operations near Ozark, Missouri.  Definitely a highlight of our home education career.  Ozark Knife Makers at Ozark Forge.

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RMC’S Sustainable Management

You  may not agree with every precept promoted by Ranch Management Consultants (Ranching for Profit) or those of any expert in the ranch/farm management or sustainable/regenerative camp, but fundamental thoughts work for nearly any endeavor.

RMC’s Ten Fundamental Truths of Sustainable Ranching

  1. TRANSFORMING your business BEGINS WITH TRANSFORMING yourself

    Transforming your ranch into an effective business involves changes in land management, animal husbandry, money management and in the way you interact with the people in your business. But the biggest change isn’t to the land or the animals. The biggest change is in you.

     

  2. IT ISN’T SUSTAINABLE if it isn’t  PROFITABLE

    Profit is to business as breathing is to life. A ranch that doesn’t produce an economic profit isn’t a business. It’s a hobby … an expensive hobby.

     

  3. FOCUS ON effectiveness NOT EFFICIENCY

    Efficiency and effectiveness are not the same thing. It doesn’t do any good to do things right if you are doing the wrong things! If something is efficient, but not effective, stop it immediately!

     

  4. GET IN SYNCH with nature

    Most ranch businesses are structured to fight nature. That’s expensive and exhausting. Businesses that match enterprises and production schedules to nature’s cycles are more profitable, less work and more fun!

     

  5. YOU DON’T GET harmony WHEN EVERYONE SINGS THE SAME NOTE

    In any business, especially family businesses, there are bound to be differences of opinion. Our decisions are improved when we bring different perspectives and ideas to the table and engage in constructive debate, as long as we agree that, at the end of the day, we all ride for the brand.

     

  6. WORK LESS and  make more

    Unsustainable effort is unsustainable. Period! Planning is the key to simplifying enterprises, increasing profit and reducing labor.

     

  7. RANCHING is a business

    We often act as though we have a choice between ranching as a lifestyle or a business. The lifestyle of ranching improves when the ranch is a successful business first.

     

  8. WORK ON YOUR BUSINESS two mornings a week

    It’s not enough to work IN your business, you must work ON your business.

     

  9. WEALTHY on the balance sheet & BROKE AT THE BANK

    The misallocation of capital is the biggest financial problem in ranching. At the Ranching For Profit School you’ll learn how to capitalize and concessionize assets to increase profit and improve the financial health of your business.

     

  10. RANCHING FOR PROFIT is NOT an oxymoron

    Many ranchers seem to think that profit is dictated by prices and weather…two things beyond our direct control. Ranching for Profit graduates prove every year that the key to profit is management.

    Blessing!

    tauna

Top 5 Business Management Actions on the Farm/Ranch

This reblogged from Ranch Management Consultants.

Top 5 Business Management Actions on the Farm/Ranch

by Dallas Mount

As we wrap up 2019, I want to share with you what comes to the top of my mind as actions that farms and ranches take when they are serious about their business management. If you are hitting the mark on these, well done! If not, then what will your strategy be to improve in 2020?

1.Effective Communication –
Have regular WITB (operational) meetings and WOTB (strategic) meetings. For WITB they should be brief, focused and end with something written down in a visible spot, listing who is doing what by when. For WOTB meetings they need to be focused with limited distractions, allow for creative thought, be inclusive and also end with an action plan.

2.Clear Roles and Accountability –
Are all the roles of your business being filled? Is ownership clearly setting the mission and vision? Is management developing plans that include strategies with contingencies and communicating those to everybody? Is labor effectively balancing all the duties and working with the end in mind? Most farms and ranches are owned and labored while few are effectively managed.

3.Plans Developed and Communicated –
Does your business have the following plans written down:
Economic plan showing the projected profit for the coming year.
Financial plan which shows the projected cash flow for the coming year.
Grazing plan that shows where the animals will be, for how long, planned rest periods and planned stocking rate.
Disaster plan for drought, fire, blizzards, or floods.
Organization structure listing who is responsible for each aspect of the business.

4.Professional Development – What is the plan for the coming year? What areas does the business need training in? Each key person should develop their own professional development plan for the coming year and get buy-in from the business leadership.

5.Healthy Balance of Work and Life – If you are spending all your time putting out fires in the business something has to change. Sure, we all go through periods of super-human effort, but if this is the norm it isn’t sustainable. If you want different results, you must take different actions.

From all of us at RMC, thank you for your support over this past year. We are so blessed to get to work with some of the best people in the world who are taking care of God’s creation and feeding the people.

Best wishes for a joyful and prosperous 2020!

 

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No One Owes You A Living!

 

The world, including the US, does not owe you a living. Or as Dave Ramsey would say, “You Are NOT Entitled To Anything“. If you dream to make a widget and insist that everyone must support you in your dream and insure that you make a full time living making that widget, then i fear you may be sorely disappointed.  Especially, if your widget making imposes on others’ freedom and property rights.

There are very few, if any, financially successful people with no debt and have, or are building wealth, working only one job.  Often the most successful have at least 2 or 3 other gigs on the side going.  (Even Warren Buffet has several unrelated income streams going!)  When you are in your teens, twenties, and even into thirties, you have energy, vision,  and motivation that enable you to put in 10-16 hours a day, 6 days a week.  This allows you to save, build equity, and work towards your dream job if you aren’t already doing that.  When you are older and that energy level drops, hopefully those side gigs are the money invested which are then working for you rather than you working for it.

I recently wrote a blog which told of the near impossibility of a person to get into farming or ranching these days.  This is largely due to the out of balance cost of land vs its productive value.  However, it is not yet impossible to farm and build wealth – even without incurring massive debt!  It may take longer, however.  And, i know of absolutely no one – young or old, in the present or in the past- who can farm or ranch (or any other business for that matter) full time without some sort of side gig.  Read stories of old timers – they were blacksmiths, carpenters, mechanics, traders, transportation specialists, suppliers; any skill they could put to use for pay was engaged.  Wives farmed alongside their husbands, raised the children, and often had a couple side gigs as well.  (Yes, i know that many women are farmers and ranchers, i am one, but also raised my own children, managed the household, and help with the farm.)  It is the same today – if you want to farm (or start any business for that matter) you’d better put a sharp pencil to how you’ll put food on the table and a roof over your head.  Don’t incur debt and make sure you have some savings.  (a borrower is always slave to the lender).  Operational farm debt is as bad as school loans.  Debt for building  a depreciating asset may be the worst of all!  What if something happens to you?  make sure you have plenty of life insurance!  Liability, maintenance, disease, accident associated with buildings and machinery are expensive and ongoing.  Once debt is incurred for a single purpose gadget, you have to keep it going or you may default or leave your family with a ball and chain which seldom adds value (it may actually devalue) to your property. Better yet, don’t go into debt.

Keep your paying job and save your money before you buy a single acre or cow or gadget. Many ranchers today are leasing both land and cattle which can be a great way to get started with very little investment or risk.  Best book i’ve read on this is Greg Judy’s book, No Risk Ranching.  Maybe you won’t have the exact same opportunities that Greg has, but use your imagination – maybe you’ll have to move – as Allan Nation, founder and former editor of Stockman Grass Farmer, used to say, “Everyone has an unfair advantage.”  Figure out yours and put your best foot forward.

Many farmers today still abide by the ways of Earl Butz to ‘get big or get out’ and we now have such an abundance and overproduction of all products that prices continue to slide.  Yet, the mantra continues to be ‘produce more’  and use the economy of scale to maximise profits.  That may good to a point, but the cost to the environment has been substantial by farming ‘fence row to fence row’  and with government subsidies now firmly entrenched there is less risk of a ‘failed crop’ resulting in going broke regardless of debt load or lack of wise financial planning.

I’m not espousing a return to farmers falling out due to the vagaries of weather, political machinations, or burdensome regulations.  Without subsidies, food, fiber, energy prices could soar to the level of parity and the consumer would certainly cry ‘foul’.  But, we all must remember that the economic  rule of supply and demand may cause us to consider better management practices.

There is the concept of focusing on profit rather than production.  If it is possible to make more money producing 120 bushel corn to the acre rather than 200 bushels to the acre, would that be something to consider?  what is the cost to the land and quality of life to produce 200 and even 300 bushels to the acre?  Can i do a better job of regenerating and improving the soil i have to increase pounds, bushels per acre and lower cost as well?  There are a lot of opportunities and new/old practices to learn – the hard part is keeping it simple and CHANGE!  This is a head issue – don’t be a stiff necked people.

Speaking of quality of life – how have you organised your dream?  does it enhance and edify others?  or detract from the lives of others?  is it sustainable?  is it regenerative?  can you keep doing this for the next 60 years?   If not, it’s not sustainable and you had better have a plan in place for the future, less strong, less energetic you.  Will your model rely on unpaid labor of yourself or your family?

Happy Planning!

 

Proverbs 6:

1My son, if you have put up security for your neighbor, have given your pledge for a stranger, 2if you are snared in the words of your mouth, caught in the words of your mouth, 3then do this, my son, and save yourself, for you have come into the hand of your neighbor:  go, hasten,a and plead urgently with your neighbor.

4Give your eyes no sleep and your eyelids no slumber; 5save yourself like a gazelle from the hand of the hunter,blike a bird from the hand of the fowler.

6Go to the ant, O sluggard; consider her ways, and be wise. 7Without having any chief, officer, or ruler, 8she prepares her bread in summer and gathers her food in harvest.

9How long will you lie there, O sluggard? When will you arise from your sleep? 10A little sleep, a little slumber, a little folding of the hands to rest, 11and poverty will come upon you like a robber, and want like an armed man.

12A worthless person, a wicked man, goes about with crooked speech, 13winks with his eyes, signalsc with his feet, points with his finger, 14with perverted heart devises evil,
continually sowing discord; 15therefore calamity will come upon him suddenly; in a moment he will be broken beyond healing.

16There are six things that the LORD hates, seven that are an abomination to him:
17haughty eyes, a lying tongue, and hands that shed innocent blood, 18a heart that devises wicked plans, feet that make haste to run to evil, 19a false witness who breathes out lies, and one who sows discord among brothers.

 

Writing a Farm Lease

Though i now don’t plan to lease out again, many people will, so below is an article and link which may give you some ideas on what to address in a lease agreement.

Online searches will give you oodles of ideas to consider adding to your lease.  A link to a sample PDF Missouri cropland lease, Verbal Farm Rental Lease Agreements, Missouri Farm Leases; Legal Aspects,

If you are the tenant, Greg Judy has a book devoted to writing agreements and working with landlords.  No Risk Ranching

Developing A Sound Farm Lease Agreement

Your local link to MU for ag extension and research information

To send a message to an author, click on the author’s name at the end of the article.

Northeast Missouri Ag Connection

Volume 6, Number 10 – October 2019

This Month in Ag Connection


This Month in Ag Connection | Ag Connection – Other Issues Online

Developing a Sound Farm Lease Agreement

Farm lease agreements can be cash, share or flexible. Each type has some unique characteristics, but some items should be in all types of written leases.

Names and signatures of all parties is essential. This means if one or both parties are married, then the spouse should sign. It is recommended to include the addresses of each party, as well as, date when signed. A notary is not required, but can be used.

A description of the property to be leased should be included. This can be the legal description and/or the Farm Service Agency farm and tract number. If the property is known by something else such as the “Brown Place” then it should be included. Producers and landowners are more likely to be familiar with the farm and tract number or the common name for the property rather than the legal description. Another reason to include the common name of the property and the farm and tract number is for easy reference in case the main business operator is incapacitated.

The lease period should be clearly stated. Is the lease term for one year, two years or longer? The start and end date including the year should also be stated. Some leases will state a 30, 60, or 90 day written notice period if either party wishes to terminate the lease on the end date. This is not required, but done to allow each party time to find new ground or a new tenant. It also helps manage expenses for the tenant, specifically prepaid items and operating loans. For the landowner, they may rely heavily on the rent income so they may use the time to secure another renter. In Missouri, unlike our neighboring states of Iowa and Illinois, written farm leases can start and end on any date designated by both parties. This is another reason the length of the lease should be clearly spelled out.

Rental rates and arrangements are another essential part of a good lease. Rental rates are often determined by the going market rate for that area. Before arriving at a price based strictly on the area’s going rate, look at yield history of the ground. Some of this will be determined by the tenant’s inputs, but over time, especially with different tenants, a trend line should emerge. Knowing yield data benefits both the landowner and the tenant so the sharing of yields could be incorporated into the lease. When looking at a rental rate, from the producer side, determine how much can be paid for rent based on individual cost of production. Iowa State University Extension has a tool that does this and can be found at https://www.extension.iastate.edu/agdm/wholefarm/html/c2-20.html

From the landowner viewpoint, decide if this is a financial investment with the highest price in mind. On the other hand, are there other factors that make a difference, such, as does the tenant keep the farm looking good? Do they watch over the place in your absence? Are they responsive when contacted and communicate well? What is important will vary according to the situation.

Along with the rental price, the timing of the payment or share should be specified. For a cash lease, this is often twice a year, but could be once a year or other specified times like quarterly. The date of the payment and amount due each time should be in the lease. For crop or livestock share agreements, this could be at the point of sale or a set number of days after harvest or sale. The producer should keep an accurate record of expenses. Sometimes these are split according to the percentages throughout the year and sometimes they are settled up after harvest or sale.

Another key element is right of entry. A landowner will not legally be allowed to enter their own leased property unless this right is reserved. This is usually done for inspection of the property or to accesso another piece of ground not leased. This point is not one that is often a problem, but should be discussed so crops are not damaged or livestock riled by excessive entry.

If the landowner wants to reserve the hunting and fishing rights, that should be added to the lease. Otherwise, those rights are transferred to the tenant.

Operating expenses need to be clearly stated. In a share lease, expenses are typically shared the same way as the crop or livestock income. Ideally, it is best to spell these out to avoid miscommunication and so that those expenses can be tracked. Sometimes an expectation exists by one party in a lease, but is not written. A common example would be the tenant expecting the landowner to supply lime on pasture and hay ground. While this is a common custom for short-term leases, it is not required.

Conservation practices is another point of discussion. Will growing crops have to be torn up to build terraces or will wheat have to be planted for the landowner to be eligible for terraces? Is there a place to move the cattle, while a pond is built? Do we agree on the conservation plan or is there a reason for a certain rotation such as a persistent weed problem?

Improvements and repairs are a part of any operation. Determining who is responsible for the decisions and labor; who will pay for what; and when will they be done is important when entering into the agreement. Issues may include fence or facility concerns to rill and gully repair to the installation of wider gates for bigger equipment. If something comes up unexpectedly during the lease period, an amendment can be added to the lease if all parties agree.

A statement such as “this lease does not constitute a partnership” clarifies the relationship and affords some liability protection. Arbitration is another item to consider including in the lease. This allows a way to settle issues that the parties cannot agree upon. The intent is to avoid legal proceedings and finish the lease term.

In summary, a good lease involves clear and concise communication. It is easier to do this if the agreement is in writing. An excellent resource for written lease documents is https://aglease101.org.

Source: Darla Campbell, Ag Business Specialist