Authors

Friday, March 17, 2017

Farm Business Transition


By John Berry, Penn State Extension Educator, Lehigh County

Many of the farmers I work for have a tough time with the process of getting their business into the hands of the next owner/manager. The reasons for this are many; no time, unwilling to think about mortality, not aware of what should happen, and uncertainty about losing control are some of the primary reasons often heard. Because of the intimate relationship between most farms and the families that work and live there; the unknowns around a broad family conversation on business transition can be a bit scary.

 

When is the best time to start the discussion?

 

If succession planning has been on your mind remember there are just six weeks left in 2016 and some holiday celebrations coming up. This could be a great time for a discussion with family regarding farm transition and succession planning. It's great that you're thinking about succession planning, but remember, conversations about farm succession are conducted from a business standpoint. Do you really want to turn your Thanksgiving table into a business conference table?  Do you want to take your time around the Christmas tree and turn it into a water cooler discussion on strategic planning?

 

While it may be tempting to start these discussions while family is home and together, make sure you're keeping family time for family and setting aside a special time for holding a family business meeting. If it needs to be connected to a holiday to have family present, think about sending out a formal invitation and agenda to the meeting ahead of the holiday, with a set time and date for the meeting later in the holiday weekend.

 

When should I start planning?

 

You may have heard the old Chinese proverb. “The best time to plant a tree was 20 years ago, the second bet time is now.” That same principal can be applied to succession planning.  It really is NEVER too early to start planning for the future, but it can become too late to start!  Almost everyone knows a family torn apart by disagreements following the passing of a loved one. This often happens because they never found the time to put their plans down on paper.

 

You can never tell what tomorrow will bring. Starting your succession plan early in your agriculture career can help you save money and can make sure your business continues as you see fit in the case of retirement, death or disability.  If you create a plan early in your career, it does not mean you are done.  A good succession plan is reviewed and improved often to make sure it still fits with the wants and needs of everyone involved in the operation.

 

Wednesday, February 15, 2017

Cultivating Knowledge; Food, Fruit & Veggies… For thought


By John Wodehouse, Penn State Extension Educator, Chester County

Hundreds of fruit and vegetable growers and industry exhibitors gathered in Chocolate Town for the 2017 Mid Atlantic Fruit & Vegetable Convention.

 

Take heed, chocolate, there’s a new sweet in town. For four days in early February, vegetable and fruit producers met at the Hershey Lodge & Convention Center to learn more about the fruit and vegetable production business.

 

This is the first of three related articles. I encourage you to journey through the fruit and vegetable convention experience with me in the weeks to come. It’s more than just fruits and vegetables; it’s about sharing knowledge.

 

Back in mid-November, a fellow educator, John Berry, reached out to me with a question.

 

He said, “How’d you like to get involved at the Fruit & Vegetable Convention in Hershey this year?”  He quickly added: “The hot chocolate up there is the best.”

 

“Sure, sounds good,” I responded.

 

As I agreed to help, I was thinking: What a great opportunity to learn, while building and fostering networks. And who could pass up the great hot chocolate?

 

My charge was to assist Tom Butzler, of the Penn State Extension. This year, he and his team took care of the equipment set-ups for all the speakers. Tom asked me to load each presenter’s slides and make sure all the other technologies worked seamlessly. As you’ll see, I got a chance to do a lot more.

 

The first person I met when I arrived at the registration desk at 7:25 a.m. on Tuesday was Bill Troxell, of the Pennsylvania Vegetable Growers Association.  He happily greeted me and helped me with the registration process. Complete with a name tag, I was on my way.

 

Over the coming days, topic-specific research discussions, concerning either vegetables or fruits, in both English and Spanish, were offered each half-hour from 9 a.m. until 4 p.m. Presentations were held in various rooms in the Convention Center. Some were given by the farm owners and growers themselves, while others were given by scholars and educators from such entities as Penn State and the Penn State Cooperative Extension, Cornell Cooperative Extension, Rutgers Cooperative Extension, the University of Maryland Extension, Michigan State, Virginia Tech, the Virginia Cooperative Extension, University of Delaware, University of Minnesota and North Carolina Extension. 

 

On Tuesday, more than 56 different session topics were offered through the day. Much of my time was spent in the Organic Vegetable session room.

 

At 8 a.m. sharp, I helped Tony Ricci load his presentation titled Organic Herb Production. Tony owns and operates the organic-certified Green Heron Farm and CSA in Huntington County, Pa. His discussion centered on adding herbs to your production mix, to add cash flow back into your business.

 

As I loaded his speaking materials into the computer, Tony and I talked about the beautiful herb pictures included in his slides. We then talked about the pros of planting herbs in addition to vegetables. The best part of Tony’s presentation - to the 60-plus growers in attendance during the first organic session - was that he gave away some of his best-kept secrets. He shared a few of his proven methods with regards to producing great, not just good, sage, parsley and Greek oregano.  

 

“Plant your herbs in double rows on black (not red) plastic, and treat them as annuals,” Tony recommended.  “This is done to preserve quality, disease resistance, and yield.”

 

Next up on in the Organic session room was Dr. Gladis Zinata of the Rodale Institute. Her  report was titled Adding in Rotational No-Till and Insectary Strips for Organic Cucumber Production. Dr. Zinata described the results of a cucumber test-plot she and a team planted and documented at Rodale. The experiment focused on this question: Does increasing species diversity by planting grass and perennial insectary strips between cucumber rows allow for improved natural insect and pathogenic resistance? My take after hearing her findings: Definitely yes. Dr. Zinata’s research supports adding grass strips and incorporating other vegetative diversity into your fields to offset the pressures of insect and disease.

 

Growers next met Jennifer Glenister, a senior staff member at the organic New Morning Farm in Hustontown, Pa. She has worked nine seasons at New Morning. She gave a very well-designed and well-delivered talk entitled Organic Snap Bean Production, followed by a lively Q&A session.

 

Jennifer shared her tried-and-true organic snap bean production strategies, along with her sowing and growing schedules. Especially valuable were her succession planting tips for longer harvests, and remedies she suggested for dealing with deer.

 

“We tried many things on the farm, but the one that worked for deer was the 3D electric fence,” Jennifer said, as a slide showing a three-tiered, offset, poly-wire fence came up.

 

While scouting, Jennifer said the minute she sees certain insect levels, she immediately deploys beneficial insects (a species of parasitic wasp) as a strategy to manage the yield-robbing pests.

 

Jennifer’s snappy presentation was followed by another inspiring discussion. This one, from Elsa Sanchez, Ph.D. and associate professor at Penn State, was entitled Using Cover Crops. Elsa talked about the benefits of diversifying cover crops. She encouraged the organic growers to combine different cover crops into their field rotations. Additionally, Elsa went into detail about choosing cover crops with alleopathic characteristics, such as wheat and grain rye.

 

“Wheat and rye cover crops both contain beneficial natural weed suppressants,” Elsa said.

 

The term alleopathic refers to cover crops with natural weed suppression characteristics. During her discussion, Elsa also gave the group per-acre cover crop seeding rates and biomass tonnage per-acre estimates for cover crops.

 

An informative discussion given by Abby Seaman of the New York State IPM Program, on Managing Late Blight on Organic Farms, followed Elsa’s cover crop discussion. Abby mentioned the need for producers to scout the field for fall-offs and/or leftovers. Her recommendation:  try to eliminate any volunteer tomato and potato plants before they germinate to reduce the likelihood of late blight outbreaks in the next season.

 

“Late blight on potatoes and tomatoes needs living tissue to overwinter, so I recommend removing any leftover product from the field,” Abby said.

 

During Abby’s presentation, we also learned about two internet-based resources designed to help producers report and monitor late blight in Pennsylvania and New York.

 

I met Dr. Julie Grossman, professor and originator of The Grossman Lab at the University of Minnesota while helping her set up in the Organic session room. She delivered two afternoon presentations. Her first was entitled Overcoming Tunnel Vision – Using Cover Crops in High Tunnels. Her second presentation, Zone Tillage for Organic Vegetables, wrapped up the organic sessions on Tuesday.

 

Dr. Grossman shared her research findings and the beneficial outcomes of her research team for planting cover crops directly inside high tunnels. She provided cover crop planning strategies growers can employ right away in their tunnels to not only improve soil health and limit soil compaction, but also to better manage weeds and help prevent insect damage.


Of the 56 fruit and vegetable presentations delivered on Tuesday, I had the joy of attending seven of them. The experience was amazing. So many enthusiastic presenters, all in one place at the same time. The knowledge attendees gained from scholars, educators and growers will no doubt be put to work on farms across the commonwealth.

 

For future reference, feel free to explore the following informative and educational resource links:










Wednesday, January 25, 2017

The Impact of Federal Reserve Interest Hikes on Your Farm


By Miguel Saviroff, Penn State Extension Educator, Somerset County
The Federal Reserve’s decision to increase interest rates in December has raised questions in the farming sector. The feds have announced at least two new hikes in interest rates in 2017. Although farm level interest rates have been too low for a long time, low agricultural prices can’t cover for any operational expense increases. The clear majority of non-real estate loans made to farmers carry floating interest rates which means the cost of credit adjusts upward if rates increase.
 A pie chart used to compare interest expense versus gross profit
The FRB increases the interest rate when there are signs of a strengthening economy but often agriculture is countercyclical to the national economy. One thing for sure is that farmers need to observe certain signals to maintain financial efficiency.

Farmers need to monitor their interest expense ratio, the relation between interest expense and gross farm income, which may indicate too much dependence in borrowed capital or high interest rate on existing debt. The Penn State “Farm$en$e” program recommends to maintain this ratio below 5%. An Interest-Expense ratio higher than 10% indicates that the farm is spending too much of its gross income paying interest on borrowed money. In this case a business or farm may want to look at ways to lower this expense, this can be accomplished in a number of ways including: selling of assets to pay down overall debt (negative ramification for this may include tax issues), refinancing some loans, and restructuring of debt.

Higher interest rates in a country increase the value of that country’s currency relative to nations offering lower interest rates. These higher interest rates attract foreign investment and the value of the dollar increases. A strong dollar makes our agricultural products less attractive to foreign buyers. One example is the reduction of cheese shipments to Europe due to the decline of the euro versus the dollar.

If there was one piece of advice to the agriculture industry, it would be to settle in. While you may want to secure a long-term loan or purchase more equipment, you will want to limit your borrowing; only do so when necessary.

Likewise, be sure to have a cash reserve on hand.

With interest rates expected to further increase, you will want to ensure you’re properly prepared for the effects no matter how many hikes and in what magnitude.

Friday, January 6, 2017

Shared Kitchen Incubators - A Great Place to Start Your Business


By Winifred McGee, Penn State Extension Educator, Dauphin County
A new year signals the time to think about new enterprises – exploring how, and where, to begin profiting from a “family favorite” recipe. The 2011 Food Safety Modernization Act, and subsequent FDA rules, have made it a bit more challenging (but not impossible) to start a food business, in that even if state regulations allow a food product to be made in an inspected home kitchen (in Pennsylvania, referred to as a “limited food establishment”), when the food goes regional or national, FDA requires that all products be made in a commercial kitchen.

For the start-up food venture, a shared kitchen offers an affordable, safe, legal place to launch. Instead of investing a large amount of money in designing and equipping your kitchen, a modest fee allows access an established commercial kitchen on a timeslot basis.
Loading the food dehydrator at Field to Fork Ag Incubator
Photo by Katie Kinka, Southern Alleghenies Planning & Development Commission
As you begin to search, you will learn that not all shared kitchens are created equally – and knowing the type of assistance you need makes a world of difference when searching for the “right place.” For instance, you may just need a shared use kitchen – that is, a place that provides space and equipment to multiple food business owners for the commercial preparation and handling of food that will be sold. This type of kitchen will likely be accessed very affordably, because no other services beside kitchen access will be offered. In a fast-changing environment like food business, you will have to keep up on food code and the current acceptable methods of production, as well as making, marketing and selling your product if you select a shared use kitchen – but many food businesses have gotten their start in just such a place.


The next step up is a shared kitchen incubator – at which you will not only access commercial equipment and facilities, but also benefit from “supportive services,” that apply to food production and business management. There will be an on-site manager who can help you navigate the complex network of regulation, packaging and distribution to have the best opportunity for a profitable enterprise. Because of the increased level of service, the per-hour rate will probably be higher than that of a shared use kitchen – but depending on the complexity of product and marketplace, this can be money well-spent.



You may also determine the need for small-scale co-packing – allowing trained workers who are already familiar with commercial equipment and recipe conversions to make valuable contributions to your venture. One such facility here in Pennsylvania is the “Field to Fork Agricultural Incubator,” which opened its doors at the Greater Johnstown Career and Technology Center in Johnstown Pennsylvania in September 2016. Joining “Field to Fork” not only means accessing the CTC’s commercial kitchen, but allows you to enlist the knowledge and skills of culinary arts students who are working towards their ProStart Certification, and are available to work side by side with kitchen tenants. As with all shared kitchens, “Field to Fork” is focused on specific targeted groups – local value-added producers with smaller crop yields and food entrepreneurs who need a place to start. Products that can be most easily created in this kitchen are non-organic, jarred fruits and vegetables, dried foods, and baked goods. During its pilot phase, use of the kitchen will be available on a first come, first serve basis. Dry storage and cold storage are also available for a monthly fee. 



In short, shared kitchen incubators do provide the environment necessary for food businesses to start, grow and succeed – by offering not only the right equipment and environment but many services that simplify and economically provide just what is needed in today’s food industry.