Farm planning, wholesale, post-harvest handling and food safety

Michael Kilpatrick, Farmer

Planning on our farm

1 year plan

3-5 year plan

life plan

1 year plan

what are we growing this year

for what markets will we attend or produce

what equipment are we going to buy

who will work for us

where are we going to plant what

3-5 year plan

what markets do we want to be expanding into

are we pushing to actively grow or shrink

long range equipment procurement

infrastructure upgrades

Life plan

What do I want to be remembered for?

What is my magnum opus?

If I could pick a career today what would that be?

Is it all about the money?

you can work 80 hours a week your whole life,

max out your 401k and IRA,

and die of a heart attack at 60 before you can enjoy it.

Cutting down the stress

institute ordering deadlines

don’t cob stuff together

Spend money on hard infrastructure

Pay for good help, and treat them well

take 1 day off a week

What are your goals?

Stay small and do farmer’s markets part-time

Run a large CSA

Go certified and produce few wholesale crops efficiently

Every Farm is different!

How should your time be spent?

1/3rd actually working in the business- doing only what you can do

1/3rd training your team

1/3rd self-development, new techniques, new strategies, seeing other farms.

What can only I do?

Seeding

bedforming

cultivation

repairs an maintenance

equipment setup

new infrastructure

Farm walk every week

crew direction

sales calls

What am I training my crew to do?

Irrigation setup

general tractor work (plowing, disking, fertilizer spreading, compost)

harvest

weeding

pruning/training

bale chopping/straw spreading

spraying

greenhouse seeding

markets

What is the weak link?

Look at operation every year and see where bottlenecks are.

Read “The Goal” by Eli Goldratt

What is slowing us down, crimping the operation.

opportunity lost cost?

Necessary endings by

Dr. Henry Cloud

If I were to have this decision to make over again would I do it?

fix, close, or sell

What crops should I grow?

Crops you can make money on

crops suited to your climate

Crops that you enjoy

How do we know what we are making money on?

Costs to consider

Production costs (seed, fertilizer, labor)

Harvest costs (labor, boxes, twist ties)

Post-harvest cost (washing, cooling, delivery)

General costs (mortgage, insurance, etc)

Marketing Costs (website, calling buyers, etc)

We need to make $40,000 an acre

Also need to make at least $40 an hour picking the crop

Works out to be $4.50 a bed ft

Bed Systems

an acre is 43,560 square ft

All beds are on 72” centers

or 7,260 bed ft per Acre

We grow 4 rows on a bed, 14” apart

Carrots

Yield is 4.25 lbs #1’s for 3 row ft.

NOT including juicers or seconds

that is 5.64 lbs per bed/ft

Beds are 300 ft long=1,692 lbs per bed

24 beds to the acre, or 7260 bed ft per acre = 40, 946 lbs per acre

Sales of Carrots

We retail in quart containers at $3.50 for approximately 1.5 lbs or $2.33 per lb

That equals $95,404 per acre.

at 40, 960 lbs per acre we need around $1 a lb to break-even.

At our normal $1.50 wholesale price we are making $60 k an acre

When can we harvest?

Retail price is 2.33 per lb

divide that into $40,000 per acre and that equals 17,167 lbs per acre, or 0.59 lbs #1 per row ft

bunched carrots are more per # so can harvest earlier

Harvest efficiency

We can harvest 1250 lbs #1 carrots in an hour, 4 crew and the brontosaurus

That is 312.5# per man/hour

a crew of 2 can wash, weigh, and label 296# in one hour, ten minutes or 127# per man hour

we estimate $10 per hour for our workers

Continuing..

3.2 cents to harvest and 7.8 cents to wash

It costs us 11 cents per lb to process carrots, harvest, wash, and pack.

$728 dollars per hour to harvest, $295 to pack.

The Organic Farmer’s Business Handbook, http://amzn.to/1cynDsA

Don’t Grow Expen$iveCover Crop

Costing out a Marketing Channel

Sales efficiency of the channel

Time efficiency

Vehicle costs/maintenance

Stacking efficiency

Farmer’s Market

70-80% efficient

Market fees, tents, scales, milage, meetings, politics

Retail dollar

Scale very easily, equipment has long use time.

CSA

Depending how structured, anywhere from 90-100% efficient

Boxes, CSA management, promotions, signup systems

Usually less than retail dollar

Consumer helps bear financial strain

Wholesale

Efficiencies of scale

Unless certified, wholesale prices will be quite low

Need to have processes and techniques dialed in

Just because it is a big check doesn’t mean you are making money

Questions every farm should ask

Scale and Goals

How does this fit with my long term plan?

What scale do we want to be on and does this fit with that?

How does this fit with our systems already existing on the farm?

How will this affect our team?

How does this affect, me, the farmer?

How does this affect our crew? What do they think?

What do councilors or mentors think?

What do other farmers using this piece of equipment, technique, or soil type think of it?

Financial Decisions

Do we have the money for it? or do we need to finance this?

Could we borrow, lease or rent this equipment?

How many hours will this save us? Cost us?

What are the numbers on this? Payback, reduced cost per unit of crop, etc?

Financial Decisions

How does this affect the farm financially, or what are the long term liabilities of this decision?

What additional expenses, resources, or time commitments will this purchase/lease incur?

Is a dealer for this equipment readily available? How much do parts cost?

Equipment purchasing

never make a hasty decision

see if you can try it out before buying

double size your equipment, windows of opportunity can be small

Track record of the company

Rainy day or reserve fund

we always have a list of equipment that is on our radar

if the right one comes along we use this money to buy it.

Multi-use equipment

You don’t want an expensive piece of equipment sitting around 363 days of the year.

buying a G over a Super C- depends on scale

share equipment between growers

research, research, research

Bed Systems

provide a standard system for vegetable production

The wider the bed the less wheel tracks per acre

Allow for machine planting, cultivation, harvesting, air flow

1 row system

4 row systems

5 row system

5 rows for spinach, radish, salad, other small crops (9”)

3 rows beets, carrots, beans (18”)

2 rows broccoli, cauliflower, potatoes (36”)

1 row tomatoes, artichokes (72”)

Goldini walking tractor

Researched it as the best walking tractor on the market

is an excellent, heavy machine

we used it until we were at about 4 acres

Goldini down

engine fire in 2006, put us down for 4 weeks

starter went in 2013, $800 to replace

Italian made, they go on vacation for the month of August, therefore parts very difficult to get.

They also use a large variability in parts so very hard to match.

Buying Cheap Equipment

Break

parts not available

Dangerous

not meant for what you are trying to do.

not ergonomic

Cheap hand truck

Books on decision makingThe Goal by Eli Goldratt

Good to Great by Jim Collins

Great by Choice by Jim Collins

The E-myth Revisited Gerber

The 80/20 Principle Koch

The One-minute Manager Blanchard

The Organic Farmer’s Handbook Wiswall

Selling Wholesale tips to being successful

What does it take to sell wholesale?

efficient production, harvest, and shipping

Special supplies

Knowledge of case sizes, grades, standards

buyers

appropriately sized equipment, pack house, etc

Waxed boxes by the pallet

barcoded twist ties

Advantages of Wholesale

Efficient use of crop

move large amounts of product, clean out overages

Product placement and name recognition

Increased sales opportunities

allows scale, which keeps cost of production down

Disadvantages

slim margin

product usually must be perfect

you are not in control, especially when shipping.

payment 30 0r 60 days out.

Buyers may not order/ or renege on order

Organic Certification

give you price advantage

some companies will accept in leu of GAP

easy to explain and nationally recognized

alternatives: Food Alliance, Certified Naturally Grown

Steps to Certification

an organic mindset

36 months free of prohibited substances

no genetically modified or treated seeds allowed

very strict record keeping and paper trail

Wholesale channels

coops/ health food stores

restaurants

supermarkets

food service

distributors

Produce auctions

Listed in our experience from best overall experience to toughest/lowest margin

or experience

Interacting with produce buyers

be professional

have a printed or online wholesale sheet

have an off-season meeting to discuss relationship

don’t lose money selling wholesale

they need to have your cellphone!

Questions to ask

what products, quantities, packing specifications

how will communication be done? text, phone, email?

Delivery schedule (does dock have specific hours)

what deadlines, (order, delivery, credit) need to be put in place?

Timing, or supply and demand

certain times of year there can be a glut on the market (August tomatoes, June strawberries)

also, peak holiday demands (thanksgiving turkey and cranberries)

work with your buyers to see what demand is, when.

goal is to sequence or have successions so that you can provide the crop the entire season.

Packaging/Branding

Professional packaging sells!

Know the packaging requirements of product and their respiration rates

growersdiscountlabels.com or even print out on your own computer

Who is your customer

Carrots

www.naturallygrown.org

kilpatrickfamilyfarm.com

Changing the way our community eats, one family at a time.

� 2 lbs. � 5 lbs. � seconds

Kilpatrick Family Farm’s

What’s actually in the bag?

FRESHPASTURED

Scan or go to kilpatrickfamilyfarm.com to learn more

Kilpatrick Family Farm chickens scratch for food on a rotated pasture in the summer and are free range in the colder months. Eating only the best local grain, makes their eggs taste better, while they are lower in cholesterol and higher in Omerga 3’s.

laid by happy hens

Pricingmost farmers have unrealistic expectations about what their product is worth

national pricing can be volatile, prices can double or halve in a week depending on who is producing

work with your buyers to set prices that are equitable for everyone involved.

USDA pricing available at www.ams.usda.gov/fv/mncs/fvwires.htm

Margin vs MarkupProduce is marked up 40-100% in retail stores

Markup is percentage they are tacking on, margin is percentage of whole.

Margin example: Kale is $3 at store, a 40% margin would mean their cost was $1.80.

Markup example: the co-op paid $1.80 for a bunch of kale. They sell it at $3.00, their markup is 66.6 percent. (Sale price/Cost=Markup.

www.purplepitchfork.com/blog/understand-margins-to-understand-pricing

Standard Kale pricing

Wholesale distributor might pay 1.125 a bunch and sell it at 1.44 (23% margin or 28% markup)

to our Coop who will sell it at 2.49 for a (42% margin or 58% markup)

You might charge $3 a bunch at the farmers market.

Margin explained

40%

60%

Costwhat they pay thefarmer or distributor for the product

MarginWhat they use to cover expenses:employees, lights,rent, insurance, etc

Check Out the Buyer

Do they follow through?

pay fair prices?

do they reject good product?

Can they move the volume that is needed?

will they buy only when you beat national pricing or are they looking for a local relationship.

The key to wholesale profitability is volume,

consistent sales, and efficient production systems

Wholesale Success

DO NOT show up unannounced on a Friday at 4 pm with 3 bushels of cucumbers and expect a buyer to be pleased to see you.

Billing/Paymentinvoice promptly- within 2-3 days

30 or 60 day terms are standard

we started all smaller accounts out at cash and moved them up as we saw fit

chefs are notorious for not paying/going out of business- watch them.

use professional triplicate receipt books (they get one, you get one, one goes in file)

email invoices/ statements

Food Safetyprotecting those you serve

1,000,000

familyfarmed.org

(Good Agricultural Practices)

GAP’s

A voluntary program to reduce the risks of microbial contamination of fruit and vegetables

required by many major grocery stores and wholesale distributors

http://extension.psu.edu/food/safety

HASSP (Hazard Analysis and Critical Control Points

applies to processed Food

usually for large companies and processors

focuses on prevention, not reaction

is based on sound science

FSMA- Food Safety and

Modernization ActGovernment program overseen by the FDA

Tiered compliance based on sales totals.

Has several major flaws relating to irrigation water, farm categorization, and manure and compost management.

Compliance mandatory starting in 2017, but tiered based on farm size.

FSMA-

2 part law- Part 1 regulates the growing of specific crops, Part 2 regulates facilities that manufacture, process, or hold human food

Certain crops are exempt from part one, most notably- Beets, pumpkin, sweet corn, winter squash, sweet potatoes

Headache factor of this law is huge.

More info.. From Vern Grubinger at UVM

UNH Extension has a lot of good summary info: http://extension.unh.edu/FSMA-What-do-you-need-know

Produce Rule Compliance Dates: http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm334114.htm

What Vermont is doing- highly recommended https://practicalproducesafetyvt.wordpress.com/

Vern’s diatribe about the proposed rules: http://www.uvm.edu/vtvegandberry/factsheets/FourFlawsFSMA.pdf

This will all be on blog including vern’s notes

Develop an On-Farm Food Safety Plan

Risk assessment of specific areas of the farm

Documentation of practices and policies

SOP’s (standard operating procedures)

Land Use History

water test results (field and packhorse)

records, logs, etc

Areas of potential Risk… and tips for improving

them

Document, document

makes sure everyone is following the plan

allows you to reduce liability, in case you are part of a larger outbreak

collect information to evaluate on-farm processes

promotes a culture of accountability.

Have a written plan…

for everything

Worker Health and Hygiene

provide clean bathrooms and running potable water to wash with

provide training on proper hand washing

sick employees should be sent home

care for cuts and injuries right away

policy on smoking, employee breaks, etc

Previous and Present Land Use

what was on this property before?

has it been flooded?

what is adjacent? upstream, upslope or upwind?

Heavy metal tests, pesticide testing

Agricultural Water

use potable water within 2 weeks of harvest (especially where water comes in contact with the edible part)

test water for possible Bacterial or chemical contamination

water management plan for farm

what is upstream?

Processing Water

change tank water frequently

use appropriate sanitizer

pre-wash dirty vegetables before hydro-cooling

10 degree F rule (wash water not more than 10 degrees colder than vegetables)

Chemicalsjust because you are using organic chemicals doesn't mean that you don’t need to follow label

chemicals should be stored in own locked area, far from processing and vegetable storage

post chemical spill information

employees applying chemicals should be properly trained and have license.

Animal and Pest control

keep all animals out of production fields and processing areas.

almost all pathogens start with animals, especially E. Coli and Salmonella

use fencing, netting, scare balloons, distress calls, etc. to keep animals at bay

have a written plan if contamination happens

Cattle, pigs, chickens, and domestic animals pose increased threats

for contamination.

Manure and Compost

one of the top areas of concern

Raw manure should not be applied within 120 days of harvest.

Compost should be hot composted (131-170 degrees) for up to 15 days

we use a lot of leaf mold for our farm

Trace backyou should be able to look at a case and know what it is, when, where, and who was responsible to harvest it, and where it is going.

we use the code HW/RCAR/GV/220/15 (Name of buyer/product code/field/Julian day of year/year

We also keep employee logs, that tell us who is on the harvest crews and who is in the packhouse

Field harvestingKeep product cool and in shade

field heat removed as quickly as possible

do not harvest from possibly contaminated areas (animal damage, puddles or flooding, equipment fluid spillage)

keep stocks of field supplies near at hand (rubberbands, twist ties, boxes, etc)

bins should be cleanable, impervious.

keep harvest bins, knives, etc clean

Packing house concerns

lights, fixtures, windows covered or protected from breakage

walls should be of material that can be washed and sanitized.

area should be well-lit and clean, with washable floors.

Final Product Transport

Impervious bin or keep on pallet

temperature controlled vehicles

Think about cold chain requirements.

food safety resources

www.onfarmfoodsafety.com

www.gaps.cornell.edu

postharvest.ucdavis.edu

http://www.michigan.gov/mdard/0,4610,7-125-50772_51097-275514--,00.html

Michael KilpatrickKilpatrick Family Farm

Post-Harvest and Storage

harvest utensils

Chris Blanchard’s Harvesting Rules

• Drag containers rather than pushing them

• keep the container near the hand that the product ends up in, and never cross your body with your hands

• keep supplies like twist ties and rubber bands next to the hand that grabs them.

• don’t set tools down, learn to work while holding knife (rubberbanding, twist tying)

• Keep tools sharp, if you feel it when you cut yourself, it isn’t sharp enough

• Track progress week to week, share with crew for a reinforcing feedback loop

purplepitchfork.com/blackbelt.

• Storage #4

• Ruby Perfection

bunch line

greens line barrel washer

vegetable washer

tomato area

coolers

infeed

Hudson Valve

156

sourceUline

S-16504

Barrel washer from Grindstone Farm

www.grindstonefarm.com

Cooling requirementsMost crops do best between 32° and 35°

several do best around 50°

if sweet potatoes go below 55° damage can occur.

at 45°, shelf life is 1/2 that of 32°- keep produce cool

http://www.ba.ars.usda.gov/hb66/contents.html

http://rsta.royalsocietypublishing.org

Fresh produce is

Alive

SanitationUse stainless steel, concrete, FRP board, or plastic for walls, floors, doors

use an approved sanitizer:

Peroxyacetic Acid (PPA) Trade name (Sanidate, Tsunami),

Clorine, (Allowed in organic only as a cleaner)

Quaternary Ammonium Compounds (Quats) (not allowed in organic production)

http://www.biosafesystems.com

Storage

http://blog.uvm.edu/cwcallah/crop-storage-resources/

Storage Conditions/Temperatures

Root Celler

• 40 x 8 x 9 insulated shipping container

• Movable, no need for building around it

• $15 thousand invested- holding $60 thousand in product.

• 3 HP condenser- 2 evaporators

container sources

• www.kelconllc.com

• www.jobsiteexpress.com

• ebay.com

• craigslist.com

• barrinc.com

Inside the root cellar

• note stainless walls

• slatted floor

• to keep the humidity up(90%), we hose down bags

• crops are stacked on pallets to keep them organized

laying out the root cellar

beets

possibilities.....

www.winterpanel.com

Insulating Trucks?

• above 15 degrees and under 2 hours doesn't seem to be a problem

• roots on bottom of stacks

• just insulate very well

• www.webasto.com

• open flame heaters NOT a good idea-

Outside Air System

Inside air thermostat Outside air thermostat

Fan

Louver to let air circulate

using natural cooling

Thermostat measuring outside air(set for heating)

thermostat measuring inside air (set for cooling)

Fan (in window bringing in cold air)

Root Pits

Jack HedinFeatherstone Farm

Jack HedinFeatherstone Farm

Richard de WildeHarmony Valley Farm

Connect with us!

@michaelkilpatrick21

michael-kilpatrick.com

www.kilpatrickfamilyfarm.com

www.michael-kilpatrick.com

@michaelkilpatrick1