Sunday, April 26, 2009

Calvert Farm - SAITA CSA Budgeting and Cost Recovery

Pam Stegall and her husband have owned the 17.5 acre organic Calvert Farm in Rising Sun, Maryland near the borders of PA and DE for 15 years. We had another good turnout for this highly informative and practical workshop: how to develop and manage a CSA.

Pam produces on 5 acres and with two heated greenhouses and constant crop rotation, her process is efficient and highly productive. While she did spread mushroom compost on the beds when first starting the farm, she doesn't use compost and tills all green waste back into the fields. Her Amish farm manager and some of his children help work the farm and she has one young assistant. She begins planting on St. Patrick's Day and this year held a potato and pea planting party with CSA volunteers offering their time.

Her CSA began with just 18 members, and Pam built her business by going out into the community to speak about organic farming and food production, sending out flyers, advertising in weeklies and using what we now call viral marketing (word of mouth) to alert people about the farm. She even once sold her chickens to a film crew working on an Oprah Winfrey movie. She is a big believer in giving back and donates food to local schools. Pam doesn't do many markets, her opinion is that they're too labor intensive. But she has doubled her large CSA membership this season.

Here are some of her tips about developing and budgeting for a CSA:

During the first two years, plan on no more than 50% retention. Pam now has 85% retention. Keep your customers happy, make sure your produce is clean and make a business plan. Know how much produce you'll be putting in each box, and budget per customer. It is helpful to have the customer come to your farm, meet you and be aware of your production and processes. Pam allots 2.5 boxes per customer and doesn't do half orders, again because of labor issues. Her logical reasoning is 'we're forced to choose what you get if we offer 1/2 boxes'. Her fee for the CSA is a very reasonable $450 per season, or $20/week. In the fall she offers another 7-8 weeks at $200.

Evaluate your own farm setup. How many customers do you want or need? What will they enjoy eating? Try not to offer unusual varieties unless you know your customer will appreciate them and plan accordingly. Pam packs 6-8 items per box and plans each week what will go into them. She weighs bags when she goes to market so that there is no question about what the consumer is getting. She plans for 3 tomato plants per person, 3 10' rows of beans and offered a handout from Rohrer's Seeds that suggests how much seed to plant for a family of five.

Marketing - reach your customer with your message. Do you direct mail, send out flyers? How does the general public find out about you? Relying on word of mouth when you're just beginning is not going to be very successful. You do need to have exposure, so plan for these expenses.

Season extenders- Pam uses row covers like Reemay and plants her strawberries in black plastic. She also rotates crops; every time one is finished, another goes in. Her methodology is impressive on such a small land area. Make the weather work for you!

Plan for product, week by week: Every activity is a cost, so work smarter. Break down each task into steps from buying your seed, to planting in the greenhouse, to transplanting, etc. Pam keeps meticulous records on nutrient management for each crop. She rarely direct seeds in order to control the growing season and rotations. She plants long growing crops to the sides of beds so that tilling can be accomplished more easily. Same with produce that will need heavier irrigation; keep them closer to the source.

She assembles boxes the day before market or delivery, everything but tomatoes goes into the cooler. For any excess, Pam will sell at market. She has 20 delivery sites and on-farm pickup, with the 30 week Baltimore market serving as her one big market; 8,000-10,000 people pass through the market daily.

Be sure you're able to do any of the jobs on the farm so you're better prepared to know what to ask of your own labor force. Always have backup products. Hers are potatoes, onions, herbs and mushrooms. She does source out some crops from other farmers; sweet corn, mushrooms. These are better left to others if you don't have the space or knowledge.

Keep labor records. If your staff isn't able to 'conceptualize' the task, shift them to another one. Don't waste time if they're not suited to a job. Drive the route so you have records for mileage. Pam avoids rush hours to save money and time.

Storing and packing: Pam built a cooler in one part of her barn, using 2x4's with blueboard, insulation and sealed it all with refrigeration tape. The door is a simple sliding barn door, that she suggests covering with a heavy vinyl flap curtain (food contact approved) to keep the temperature at an even 33-35 degrees when you're opening and closing. Her utility cost per season is $30-40/month.

Pam doesn't use any chemicals to deter pests, but relies on homemade bug busters like hot pepper sprays for harlequin beetles. Demonstrating how frugal and savvy she is about trends, she doesn't prune her pear, apple, plum or cherry trees until they're in bloom. Then she can sell the sprigs to florists, who will come to the farm for pickup. Hostas were planted to soak up excess water in a problem drainage area.

She enlisted a local fireman to drive their truck to market in Baltimore, and she's picked up her commercial grade stainless steel carts on the cheap from restaurant supply outlets and yard sales. Her fridge for storing flat boxes was free from a local health food store. Her boxes come from PCA near Manheim, PA and she suggests talking to Robert Doyle, their salesman.

Pam discussed safety issues and suggests diligence when hiring a driver (check their license with Motor Vehicles) and buying general liability insurance for the farm. She offers value added products like eggs and honey, and some products are bought from local farms. In managing the business, she plans up front to take 10% for seed and equipment, paying other farmers. Then on a weekly basis she allots a payment back to the farm, similar to an escrow account.

While she says 'This is hard work and it's not for the faint of heart!', Pam manages her farm smartly and safely. We all appreciated her generosity of time and her offer of fresh baked bread, veggies and homemade Amish mint tea.

Stay tuned for next week's posting from Willow Creek Orchards on the Economics and Season Extension of Greenhouse/High
Tunnel tomatoes!
Schedule here.

SAITA Coordinator

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