TALKING SHOP: Innovative Farmers of Ohio, Mt Vernon, Jan. 16 - 17, 2004

Careful preparation key to success
for farmers seeking transition to profitability

IFO president Charlie Eselgroth urged farmers in Ohio to prepare to take new steps toward sustainability to weather the inevitable challenges to come.

By Melissa Brewer
Posted March 19, 2004

S p o n s o r B o x
Innovative Farmers of Ohio

Innovative Farmers of Ohio (IFO) is dedicated to promoting -- through research, education, and community-building activities -- an agriculture that preserves and strengthens the economic, social, and environmental well-being of Ohio's farms, farm families, and rural communities, and protects and improves the health and productivity of Ohio's land's and waterways. It serves as a bridge to sustainable agriculture for many farmers and institutions.

IFO facilitates on-farm field days, learning circles and on-farm research. It builds support for local food systems as one of 14 members of the Ohio Food and Farm Network. It is housed at the Stratford Ecological Center in Delaware, Ohio:
www.stratfordecological
center. org

Contact info:
Innovative Farmers of Ohio
3083 Liberty Road
Delaware, OH 43015
740-368-8552
ifoh@aol.com
www.ifoh.org

MT. VERNON, Ohio—Despite mad cow discoveries, a rough planting season and general, daily farm challenges, 2003 was a good year for agriculture in Ohio. With crop prices at a notable high and markets not greatly affected by mad cow, it appears as though farmers here have had a stroke of luck.

But for some -- like Charlie Eselgroth, co-owner of a natural beef operation in Ross County, Ohio -- luck had little to do with his success. As he shared during opening comments at the recent Innovative Farmers of Ohio (IFO) annual conference, his preparation was key to finding sleep at night when other cattle farmers were caught up in the mad cow fallout. His customers knew the origin of their products, keeping Eselgroth’s markets more stable.

“Luck had nothing to do with this,” said Eselgroth, who also is president of IFO. “[My wife and I] spent six years building this business, learning and taking a lot of lumps along the way.”

Eselgroth’s comments resonated with the conference attendees, all differing in sustainable ag experience, but all seeking advice in “transitioning to profitability.” He said the positive trends in Ohio agriculture this winter give farmers a little breathing room in which to consider transition in how they farm and market.

"So that the next time the crisis hits --which will happen -- all of us will be able to say, ‘Yes, aren’t we fortunate,’ while at the same time thinking, ‘Yes, because we prepared.’"

Charlie Eselgroth, president of IFO

“We can use this time to help us get started on a new enterprise, or a new way of doing things, or help us fine-tune some things that we are already doing to help us move on down that road to sustainability,” Eselgroth said. “So that the next time the crisis hits --which will happen -- all of us will be able to say, ‘Yes, aren’t we fortunate,’ while at the same time thinking, ‘Yes, because we prepared.’”

That preparation, Eselgroth said, takes time to adopt and adapt new practices. When done well, it can be profitable in both money and in character.

Profiting berries and B&B

Jackie LeBerth and her husband, Mike Neeley, agree. They are co-owners of Bramble Creek Bed and Breakfast in Little Hocking, Ohio. LeBerth and Neeley are building on their experiences as beginning farmers to prepare for the next step: profitability.

They started Bramble Creek Farms 1997, then planted 40 acres of blackberries and raspberries three years ago. Over the past two years, the couple also has added Concord grapes and strawberries. They harvested 21 gallons of blackberries in 2003. LeBerth said they expect a profit on their new enterprise after the 2004 picking and processing, according to Ohio State University statistics.

“Our goal is to sell (the berries) any way we can, but so far fresh, frozen and value-added have been our primary ways,” LeBerth said. “Our production has not exceeded our demand at all … and that’s sort of my message here today: Diversify, diversify, diversify.”

Successful farmers of any type know their customers and what they want, said LeBerth, a small-business consultant.

Bite the bullet: do a business plan

The key is to identify potential markets and customers, then to outline an approach to serving them in a business plan, LeBerth said. Thoughts of such plans often leave farmers cringing, but a good plan helps farmers visualize their goals and systematically move toward them.

“The number one question that you have to answer is: ‘Who is going to buy what I have to sell?’” LeBerth said. Her second point: “You are not your own customer, so we don’t care what you want. Your customer is whose head you need to crawl around in. What makes them let go of their hard-earned cash to buy what you have to sell?”

Farmers need to figure out the benefit they are trying to sell, the customer to whom it will be sold, and then work to communicate that benefit to the customer, LeBerth said. And part of marketing that benefit comes from doing research on a product and becoming an expert.

"The number one question that you have to answer is: ‘Who is going to buy what I have to sell?’” LeBerth said. Her second point: “You are not your own customer, so we don’t care what you want. Your customer is whose head you need to crawl around in. What makes them let go of their hard-earned cash to buy what you have to sell?"

Jackie LeBerth, farmer and
small-business consultant

“If you can create an atmosphere that you have a special knowledge of what you’re producing, people will come to you and buy your product because they believe that you are the best there is at that,” Neeley said. “Networking is a great way for people to feel and understand that you have a special knowledge of what you’re doing. What you’re doing may not be a lick different than what the guy down the road is doing, but if he won’t talk to people, they won’t go to him.”

Explaining innovations on a farm can be a sign of expertise. Visitors are always excited to learn more about the solar-powered water system used by Bramble Creek Farms, Neeley said. For that reason people have come to believe Neeley and LeBerth are berry experts and are willing to pay $8.50 per quart of frozen berries and $10 per pint of canned berries.

Survey says: local and organic favored, face barriers

Building awareness of locally grown food helps develop markets, agreed Shoshanah Inwood, a graduate student at Ohio State University. Inwood shared her research on local-food interests during a session on “Serving New Markets.”

During recent research, Inwood surveyed Ohio restaurants and retail outlets, conducting 100 interviews. Out of those surveyed, 72 percent reported purchasing some locally grown foods, and 55 percent reported purchasing some organic foods.

Around 90 percent of the respondents wanted to increase their local-food purchases, but have been unable to do so citing these top constraints: extra time and labor, the inability to find producers, lack of distributors, and seasonality of products.

The most common response Inwood received was, “I’ve been wanting to purchase local, but I had no idea where to find it.”

“The majority of the time that was the reaction I got,” Inwood said. “There is very clear interest out there, but also a very detrimental communication gap and advertising gap.”

"I’ve been wanting to purchase local, but I had no idea where to find it."

Most common response given to Shoshanna Inwood in her survey of 100 potential commercial food buyers in Ohio.

Sustainable ag producers need a new distribution system. Restaurant owners and retail outlets want locally grown food, but do not want the hassle of searching for it, nor the hassle of providing vast amounts of refrigerator space for it, Inwood said. They want to receive local food according to their volume, quality and tight schedule constraints.

With or without a distribution system, natural foods have an advantage: People purchase based on taste. And according to Inwood’s survey, 98 percent agree that local foods taste better. Ten percent of the respondents indicated that organic foods taste better.

Get in touch with taste diversity

Growers need to get in touch with the tastes of their local markets. For instance, there is a huge cry for specialized fruits and vegetables, Inwood said. At the same time, there is little demand for grass-fed animals, which do not suit the palates of Ohioans as of yet. But the biggest opportunity is in dairy with artisan cheeses, which are what chefs prefer, she said.

“The other thing is that Ohio is a really diverse place,” Inwood said. “Ohio is made up of a lot of ethnic heritage groups--Italians, Germans, Irish, but we also have a lot of other ethnic heritage groups--Arabic, Hispanic, Asian.

“And when we think about it, we all define ourselves in a lot of ways by the kind of food we eat,” she explained.“And each of our unique tastes and preferences also represent a marketing opportunity.”

By reaching out to ethnic markets, producers open a whole new door of specialty products. Smaller retail outlets carry more specialized foods. If they are willing to carry one locally grown product, they will probably carry more just because of convenience.

Currently, specialty stores look to markets outside Ohio, such as organics from California, to get a consistent, year-round supply. Season extension is critical in developing a market, Inwood said.

In line with growth reports of 20 percent per year for the organic food industry, 32 percent of her respondents were willing to pay up to 10 percent more for locally grown organic foods – for quality attributes of freshness, taste, texture and color. Ohio has 200 certified organic farmers that cultivate over 41,460 acres, she reported.

Embracing the complexities of sustainable production and niche marketing alone can be a daunting prospect. There are only so many hours in a day, and farmers have only so much energy, said Jackie LeBerth.

To best utilize their time and energy, farmers need to look for new opportunities with their competition as well as networking and partnering with their colleagues. LeBerth said these relationships are vital for small producers to survive in large markets.