How to spend $315,000

The farm equivalent of a bad mobile home

This post is about how I think about a new business venture, and was inspired by a comment that hostetter made a couple of days ago,

"I have read many blogs but only follow a few. My favorite posts in any blog that I happen upon are the "this is what I have read and what I am reading type posts". If I find the blog interesting it's great to know where they got their information from that allowed them to become informed on a topic. I would love a post from you that detailed what you have read in the past that got you on this journey and what you have on the list coming up. "

What I really enjoy is the startup phase of a business; for me, that usually starts when I notice something that is odd to me, or I see something where I think that there's some sort of value that's being missed, or I see someone who's doing something that I think is a good idea.   What I'd like to convey here is that I watch things around me and sometimes something just leaps out at me and hits me between the eyes.  So I work on developing that idea. 

The uglier the better!
  I love buying acreage with a mobile home on it.  In fact, 5 acres with the worst 1970s mobile home is perhaps my favorite type of property to buy.  They make GREAT rental properties...

What the market sees
...because everyone who looks at the land will usually get stuck on how awful the mobile home is.  The mobile home will actually lower the value of the land that it sits on.  It'll sell sometimes for less than the bare acreage will.   Excellent!

What I see
Land that has a power connection, a water connection, and has a septic system installed.  Let me paraphrase that:  You have a fully prepared building lot.  The mobile home costs about $1k to dispose of, and it's actually pretty fun.  You rent an excavator and use it to tear the building apart.  You sort it into recyclables, like aluminum and steel, and toss the rest into a 40 yard dumpster you rent.  And then you get the new, better, mobile that you purchased for $10k and drop it onto the foundations.  I'm ignoring some permitting stuff here, but you get the idea.   with $2k worth of fence you now have a nice rural rental that is perfect for someone who wants to keep horses or whatever, and will actually rent for a bit more than a similar stick-built to the right tenant.   So for an investment of around $50k you get $10k a year in rent.  Yes, there are various other costs, but right now, getting a gross profit of 20% on that small an investment is a pretty good deal.  How many of those can you afford to own, even in this economy?    You own this property free and clear in 7 years with normal operating costs.  

Summary
What I noticed is that acreage with mobiles was selling for less than bare acres, and that there was between $30 and $50k value in water sewer and power connection fees that most folks didn't notice.  And with not much work at all you could turn a loser into a winner. 

What am I seeing now that's farm related? 
Small dairy farms are the kiss of death in real estate.  I'm talking about the 50 to 80 acre farm with a nice 2000+sf or so house, freestall barn, milking parlor, manure lagoon and a couple of other outbuildings.  A dairy farm is kind of like a bad mobile home.  I think that some of these properties are selling for less than the equivalent property would if i was just a house and a hobby barn -- like a horse stall barn.   People see the dairy fittings and walk away from the property.  I see big barns I don't have to permit or buy.  I see stuff that would be very difficult to permit at all, already there.  And for a lot of these properties, I see why they went out of business. 

You'll find the MLS listing for this property here  3 Bedroom 2.25 baths on 74 acres with big outbuildings.  $450k asking price.  This is the only parcel of any size for sale for miles in any direction.  It's been on the market for 5 months.  It has 74 irrigated acres.  Irrigated acres.  Water rights are worth money these days, too.   

What's the real value?
For what it is, these properties are selling below replacement value.  the 70 acres at $6k an acre, which is about what bare land is selling for, would price this property at $444k.   a big steel barn, like the one on this farm, would cost you around $100k to build.  The equipment shed another $15k.  the haybarn, $10k.  the house, around $100k.   the milking parlor, commodity barn and the cost of permitting a new manure lagoon...   $100k.     Figuring all of the buildings at 1/2 their replacement value, what I figure "fair market value" for this property is something like $606k. 

What could you buy it for?  Well...
It's been on the market for close to 6 months.  The last time I saw properties on the market this long I bought them for between 20 and 30% off their asking price.  If you are the only offer, you're the only offer.  Using that as a guideline, you might be able to get this property for $315k.   current cost for a $315k mortgage is $1481 a month, with 10% down, assuming housing rates.  Commercial loans, or farm service loans will be higher, and it'll depend on your credit rating, but lets look at what most folks miss.    Banks hate dairy properties and generally just want to get rid of them. 

This property has at least 60 tillable acres.  You can lease that land for between $150 and $400 a year.  Using $150 a year,  that guy who is haying it will pay you $9k.  at $400 a year, he'd be paying you $24k a year.     How do I know this?  I drove there, found the guy who was haying it -- a neighbor, and asked him.  It's a lot easier playing poker when you can see the other guys hand. 

They might even pay you to own this property - cash flow
So you'd have the house, barns, outbuildings and lagoon, and the whole thing costs you $31k in downpayment, and your payment after lease proceeds would be about $800 a month...or you'd be making $600 a month if you get $400/acre/year.  They will pay you to own this land.   You could probably even use the land lease as part of your "income" to qualify for the loan.

Wouldn't you like to own a farm that you get paid to live on? 

This particular property is river frontage -- the conservation reserve program will pay you $400 an acre a year for the land along the rivers edge.  It's a salmon stream, and they will rent 150' buffer for a 15 year lease, or would last time I checked.   Most folks pay a premium for a riverside house.  You get paid for it. 

So I can rent as much or as little as I wish.   Anything I'm not using is generating income.  If  I'm cash-strapped, as I often feel after I buy a property, I can just lease it all, live in the house and save for the next step.  People forget about the income potential of farmland. 

The manure lagoon is more valuable  than most folks know. 
For someone doing livestock, the permitting process to create a new manure lagoon in this state is both complicated and expensive.  Lots of folks would look at a lagoon as a downer -- but I'm telling you right now that at least here in Washington, if you don't have a way to deal with your manure and you're raising animals you are going to get regulated.  See this blog entry for an example.    
If you really hated it you could probably just drain it and plow it away, but I think you'd be foolish to do that.  Once decommissioned you will pay through the nose to get it back.  So let it be for a while.  Or use it, if you have animals. 

What's next? 
This would be even better if you could find some way to make an income off the property -- or, better yet, make a good income off it.   That's what I've been working on for the last couple of weeks. 

Rambler.  no stairs

Kitchen sucks.  Ok. 

That's a lot of area under roof.  No farmer I know complains their barn is too big

Commodity shed.  Keeps your sawdust dry, or hay, or manure storage or whatever floats your boat

How about an big hay barn? 

70+ acres of pasture, in grass.  Hayed last year.  Nice ground. 

Ok, the cow fittings could be a pain in the rear.   2 days with a cutting torch, and a foot of sawdust.  Done.

Workshop. 

manure lagoon

The dog loves it when we slaughter

My airedale, monster

 Monster is the sire to my airedale pack; he's 9 years old this year, and still holding up well.  Sometimes we call him Dr. Monster, because he's taken to diagnosing animals.  He'll look at an animal, assess, and if he thinks it's going to die, he'll stick around and gaurd it until it does -- he figures that if it dies when he's watching he gets to eat it. 

He knows when he sees me with the gun and the knife that we're going to be slaughtering something, and soon.  He doesn't react when i'm carrying just the knife, or just the gun -- but when I have both on me, he's pretty sure there's going to be action soon. 

airedale, covered in blood

 Sometimes he's doing something else when I make the shot, but when he hears it, he'll come directly -- runng at full speed.  If it's dead, he's actually a little miffed.  Since he wasn't present when it died, he may not get to eat it.  He'd prefer to eat it.  So when we pick up the animal, usually with the tractor, he's right there.   As the blood poured out of the animal, he got a good coating.  He's blood-frosted.  But to a dog, that's perfume.  Blood flavoring makes you more popular with the other dogs.  You become the envy of the airedale pack.  They want  you to lead them to the blood, too. 

airedale, still covered with blood

 In this case he avoided the main gusher, but still got a good covering.  Enough that I hosed him off so that the blood wouldn't cake up on his fur.  He took it stoically;  this isn't his first rodeo, and he's waiting for that bit of liver, or kidney, or an ear or two, or a tasty foot.  He considers the reward to be worth the bath. 

airedale breed standard is 24" at the shoulder for the dog, 60lbs

For all his eating, and he eats a lot, he's maintained his youthful figure.  Airedales have a really deep chest and narrow waist.  He spends most of his day running  and hunting things, and he takes that part of his job very seriously. 

Airedale:  Please kill something else

How much milk in cheese?

So I've been looking at dairy farm economics recently for a project that I'm considering, and one of the basic questions that I've been working on is how can you sell your milk.  It's perishable, and when produced, you can keep it for a week or two under refrigeration, but at some point you have to use it or sell it. 

One of the things that's popular on small farms is the raw-milk dairy.  The farm produces milk, processes it into cheese, and sells the cheese in a variety of ways.  

The information that i've gotten is that you typically get a pound of cheese from a gallon of milk.  It varies a little based on the breed producing the milk - some breeds have a higher solids content for their milk, some have higher fat, but on average this seems to be the internet consensus. 

So a grass fed cow, by NDHIA numbers in this area, produces about 40lbs of milk a day.  That translates into 4.7 gallons of milk (milk weighs 8.5lbs per gallon), which would in turn translate into 4lbs of cheese. 

If you were to sell the milk as fluid milk, and maintained your herd as organic, and were a member of an organic dairy cooperative, you'd get $23/cwt, ($23 per hundred pounds) of milk.  That would work out to be $2.09 a gallon.   Fluid milk prices can vary quite a bit; in recent memory they've run between $11/cwt and the current high of $23 a cwt. 

I'm going to guess that you'd need to wholesale your produced cheese at something like $6/lb to make a reasonable profit. 

Cheese might be a good secondary business to a grass fed dairy.  Sell the bulk of the milk to the coop, but reserve a portion of the production for your cheese.  This sort of setup would allow you to deal with varying production based on seasons, and give you ample supply if your cheese business grows. 

hmmm

Brett -- grasspunk blog -- reminds me that I forgot to add in how much pork I could raise on the whey that's a byproduct from the cheese business.  You're right, Brett!

Save the environment at any cost! - manure digesters

The State of Washington has been encouraging dairy farmers to invest millions of dollars into a technology called an anerobic digester, and they've actually built 8 of them so far.  There's one a few miles east of my farm, in Monroe, WA. 

I first noticed these digesters because they started sucking up food that I could otherwise feed to my hogs.  Vegetables and fruits, expired beer, prepared foods like soups and stews (that had been boiled so would have been legal to feed to the pigs) were all getting shipped to these things. 

It worked a little like this:  The department of Ecology would approach a dairy farmer and say something along the lines of "Hi!  You sure have a nice farm here.  It would be a shame if some sort of endangered species were found on it.  "  With the explicit threat of losing the use of their land or having it dramatically curtailed (that's the stick) followed by the carrot of federal, state and local grants, and a "small" investment of the farmers own money, why "you won't have any problems at all.  "

The particulars will vary.  Sometimes it'll be salmon streams.  Sometimes its because horse owners in the area don't have anywhere to take their manure, and sometimes it's because, well, big capital projects are just cool.  Sometimes there's not any good reason other than the fact that we can get a few million dollars in grants and keep a local contractor happy pouring concrete.   

Here's what they did to the dairies around Mr.  DeRuyters farm: 

"Officials with the federal Environmental Protection Agency (EPA) have said the dairies in Promus' project are among the likely contributors to the pollution. And the EPA has been working with the owners to draft legally binding management plans to clean up, while environmental advocacy groups have threatened to sue the dairies."

You sure have a nice dairy there, Dan.  Sure would be a shame if something where to happen to it.

The only problem is that...

"...traditional digesters such as DeRuyter's don't get rid of those nutrients. Besides the gas, they leave behind a brown slurry that farmers must store in lagoons and apply to fields, as well as solid waste they turn into compost for livestock bedding. "

So folks like Dan DeRuyter spends 3.8 million dollars building one of these things... and the bottom drops out. 

In the case of Mr.  DeRuyter, the electricity that he generates from his digester is now being purchased at less than half the price he was quoted, and was counting on. 

So he's stuck with this multi-million dollar contraption on his farm that is costing him money.  In his words "...To be honest with you, it's not a cash-flowing deal," he said. "I haven't got out of it what I hoped to get out of it."

We have an ethos here in Western Washington that no amount of money is too much to spend if you can link it to "saving the environment".  

That's fine if you have the money to spend, but think about it, folks.  I bet you that you can think of better things to do with 3.8 million dollars than stick some dairy farmer with an albatross, and a pig farmer with increased competition for food.   Disclosure:  I'm that pig farmer. 

What is the solution for Mr. DeRuyter? 
He'd like to make fuel for trucks out of his digester.  That seems like a great idea, right?  I'd sure like fuel to be cheaper myself. 

All we need to do is pour another 10 million? dollars into that concrete pit he has.   That's what it cost another group to convert their digester. 

How about we do something simpler?   Use the manure (which dairymen refer to as "nutrients") for what it has been traditionally used for -- fertilizer.  Make sure that it's not over-applied -- that is, spread the dairies waste over more acres so that it's utilized and not runoff. 

Simpler, cheaper, but it's not politically popular.  it's a lot more fun to have a vast public works project that generates consultant fees and political contributions and contracts to bid...  Patronage. 

The cost of natural gas is dropping through the floor because of increased production of the gas due to fracking.  The chances of this venture producing fuel that costs less than that are very small. 

Happy holidays, with pigs and cake

Tank, my first wreath model attempt

I had planned a festive wreath arrangement on a pig, and had two chocolate cakes and a couple of wreaths to make this easier, but I ran into technical difficulties.  The first was that my first wreath model candidate weighs about 600lbs (you can't really see how big she is in the photo above, but take my word for it)

I thought I could maybe slip it over her head.  No luck. 

 She was actually pretty good natured about the whole thing, but I made a terrible tactical mistake.  Take a look at my hand in the picture above -- that's chocolate cake frosting all over it.  So she kept smelling chocolate cake the whole time and wanting to look up to my hand.  I also couldn't fit it over anything but her nose, really. 

An ear

 So I tried hanging it on her ear, but that really didn't work out either.  So I gave up on her and gave her and her piglets the chocolate cake anyway.  Her piglets were diving mouth first into the cake and covering themselves in frosting.  They were deliciously coated afterwards. 

cake is good!!

My second attempt was a little different.  I chose #30, a very friendly smaller black sow that I thought would fit into the wreath, and decided to bribe her first.  So I set the chocolate cake on the ground and...

She took a big bite and immediately ran off with the mouthful of cake.  When pigs find something really good the first thing they do is try to take it away someplace quiet and eat it all themselves.  They are pigs, after all. They are not big on sharing.

 So I waited by the cake until she returned.  It is a black chocolate truffle cake with buttercream frosting and covered with shaved dark chocolate.  It smelled divine!

black pig wasn't my best choice.  She's on the right.  

 When she figured out that I wasn't eating the cake, I carefully tried moving the wreath up, but she wasn't have any of the wreath, but she really wanted the cake!

 So I chased her around a little with the wreath, and then finally just let her eat her holiday dinner in peace.

Pigs eat cake from top down.  No dainty slicing for a pig!

Happy holidays, #30.  You've been a good sow and always sweet.

New blog I read

From the "about" link on his blog: 

"Matthew Walter is a full-time farmer in the driftless region of southwest Wisconsin. Matthew raises and direct-markets hoophouse pork and grass-finished beef as Jordandal Farms.
Matthew received a Bachelor of Science degree in Animal Science from UW-Platteville while continuing to farm on the weekends. Matthew then studied population genetics at Iowa State University under the late, Dr. Lauren Christian. While there, he became one of the first eight certified swine ultrasound technicians in the world. He used ultrasound to evaluate over 5,000 swine in two years. "

Matthew farms in Wisconsin and he writes about a different kind of farming than we have on the west cost -- case in point, he recently recounted selling a boar of his for $0.14/lb, which would just about kill me. 

He's involved in planting, harvesting and feeding crops to his hogs and cows, and his BS in animal science brings an academic rigor to his farm that I like a lot. 

Figured you guys might be interested, too. 

Check out his blog, Curious farmer, in the "blogs I read" list on the right side of my blog, about halfway down. 

Winter farrowing, and pastured farrowing in general

I'm running about 100 sows right now, and have 4 boars that run with the herd, and the herd is fed as a group, primarily off of produce. 

We have a number of sows that farrow each month; somewhere between 5 and 10 each month, and we farrow year-round. 

The piglets are pretty important to us.  Every piglet that we wean becomes immediately saleable, particularly in the spring when the price for each approaches $150, which puts a value on a litter of piglets at $1500 or so -- that's big money.  Even at more normal prices, the pressure is there to keep as many alive as possible, and, honestly, there is nothing that I hate more than picking up dead piglets.    With 100 sows, our gross sales of piglets approach $100k a year.  It would be safe to say that piglets are a big part of our farms total sales. 

We also need the piglets to produce our finished pigs each year, and there have been times we've purchased piglets because we cannot produce enough to fill the demand. 

So for all those reasons, we try very hard to wean the most piglets we can.  Notice that I specify wean; you'll see many people with pictures of their sows with 12 or 14 or 18 piglets -- but until they're off the sow they are at risk.    Once weaned, they are unlikely to die.   I am pretty skeptical about folks who claim to have low or no mortality when they're pasture farrowing.   When third parties, like universities look at survival rates the usual death rate is between 20 and 30%.  On the farming blogs I often see claims that are downright miraculous. 

We have tried over the years pasture farrowing (pigs on grass, pigs in brush, pigs in shelters, pigs in domes, pigs in hay structures, pigs in barns, and pigs in farrowing crates.  Our climate is wet and cold; it's between 30 and 50 degrees most days, and we usually get one to two weeks a year when it's below freezing. 

If you can keep piglets dry it really doesn't matter what the outside temperature is, honestly.  With all of our attempts, having the sow there to provide a wall of warmth for the piglets means that our survival rate did not vary much no matter what the temperature was.   You don't have to worry about temperature if you can keep them dry. 

But on my farm, in my climate, it is nearly impossible to keep them dry if the sows are allowed onto pasture in the winter.  It's fine in the spring and summer and into the mid to late fall, but when the rains start in earnest, and we're talking about late October to late March here,  you cannot replace the bedding fast enough.  This matters most when the pigs are newborn to about 2 weeks old.  after a week or so the piglets can find their own warm spots and generally do very well, but that first week in the winter is brutal.

For this reason we prefer to farrow in a barn, under a roof, in the winter, and we pen the sows with the piglets and keep them on dry bedding for the first week or two, depending on how the piglets do.  We do this either in pens on wood chips in a barn, or in farrowing crates -- depending on our experience with the sow and and the overall weather.   If the sow has done well without the crate we'll usually pen her and let her farrow in the pen.  If she has had problems with pen farrowing, we'll crate her for the first week.  Some sows are excellent mothers and very careful with their piglets.  Some suck.  Having farrowing crates available means we can do an intervention when warranted, or put the sow in a place where we can easily observe her or treat her if she's having some sort of issue.  It is actually more work for us to have a sow in a crate; it takes more labor, and costs us more in feed, but we do this because we want to give the piglets the best shot at weaning we can. 

Overall, with judicious use of farrowing crates, we usually wean more than 85% of the piglets born, and that really makes a difference for the bottom line, and it makes a big difference for the farmer, too.  Happy, bouncing, squealing live piglets are like having kittens every month.   A lift for the heart and fun to watch and a constant reminder of renewal and life. 

This post is prompted by farrowing discussions on two blogs.  You'll fine one entry here, and the other one here. 

Small dairy farms and robots

I've written about the dairy industry a few times in the past few weeks, for a variety of reasons.  One of the biggest is that it produces a product that people like, in quantities that make it possible to make a living, and it suits the climate here pretty well, provided you go with feed for the cattle that is grown here.  Like grass. 

A milking robot

There are a number of challenges about dairy farming; it can require quite a bit of money to get into it,  you'll usually have to have many acres, and the scale of the work is pretty daunting.  Most dairies in this country milk all of their cows at least twice a day, with some dairies milking them 3 times a day.  A cow is built to produce milk, and can store that milk in her udder for a while, but once full, she stops producing.  If she's not milked at all, she'll dry up.  Cows are built to feed calves, and produce best when milked often. 

Milking multiple times per day, 7 days a week, is a lot of work.  What that means is that most folks who own dairy farms have employees, and that adds the management of the employees to the other challenges that the farm has.  You have to deal with it when your milker doesn't show up.  You have to hire and fire, and, well, employees never care about the farm as much as you do. 

So many dairy farms are turning to robots to milk the cow, and I've got to say that this idea appeals to my engineering side.  If you'd like to see one of these robotic milking parlors working, you'll find a video below which shows you some views of it.  It doesn't really talk about what's going on in the video -- it's just the video without explanation, but you get the idea from it. 

Robotic dairy video

Dairies with as few as 60 cows are buying these things -- and they are expensive.  They start at around $170,000 USD, and go up to $210,000 USD for the latest model with all the accessories. 
But here's what they do for you: 

1) the cows decide when they want to be milked.  They spend their time doing whatever they'd like to do, and when they feel like it, they wander over to the machine and are milked.  I've read probably 50 news stories from farmers using this, and this is one of the first things that they mention.  People get hurt when working with 1,000lb cows, and it takes time and energy to round the cows up.  With this system, the cows round themselves up, and milk themselves as many times a day as the cows wish.  The farmer gets a report about who's been milked and who hasn't, and can go get the cows if they aren't showing up often enough. 

2) Because the cow is doing more of what it wants, the perception is that the cow is more comfortable, and this usually results in a 10 to 20% rise in milk production.  So your same herd and facilities produce more milk. 

3) Less staff, and a smaller payroll.  The farmers report generally that they enjoy not having to be in the parlor for milking at fixed times of the day.  The robots will text them if anything needs attention, and they can reset and control the milking machines from their cell phone. 

4) the milk quality is measured and tested for each nipple of the cow, and if there are any issues, the milk is held back from the main supply.  So your produced milk is cleaner and has a lower somatic cell count than usual, according to reports. 

5) speaking to quality; the milking is done the same way, with cleaning done between every cow milked, and that has been one of my biggest concerns about things like raw milk.  If you miss a step with raw milk, you contaminate potentially the entire batch.  Here I'll trust the machine to do it better than my hired hands. 

6) You get the milk production PER NIPPLE for every cow.  You get her weight, temperature, and a variety of other statistics, and can give any cow you choose a special ration.  Got a cow that's running a fever?  You know it right away.  Losing weight?  Check.  And when it comes time to figure out who's not producing milk you can look back over the last few months and see.  As an engineer, I LOVE the idea that you are making decisions on your farm based on real data. 

There's a very real human benefit, too.  Many dairy farmers have repetitive stress injuries, or blow out their knees, after years of hard labor.  This machine is allowing people to stay on their farm, and in their industry, longer than they would otherwise be able. 

It also makes inheriting and running a dairy farm more attractive to their children, and succession of farms is often a problem... 

But the price... the price.    In Europe, which gives more price supports to farmers on milk, these machines are very popular, and given high labor costs in Europe, they pencil out pretty fast.  Here, with our minimum wage standard for farm jobs, not so much.  that doesn't mean that people aren't adopting them -- one of the primary markets is the small (less than 300 head) dairy farms. 

Most of the US farmers that have adopted them figure that they'll pay for themselves in 7 to 10 years. 

Natures Harmony fundraiser

[Update 12-20-2012.  We've raised $13.25 towards the fund!  Keep those donations coming.  We can't send just one of them to the movies, and I'd like to allow them to buy popcorn, too!]

 

I was looking at the natures harmony facebook page and noticed this conversation related to their blog and podcasts being deleted.  It looks like it's the cost of the hosting that is making it hard for them to maintain it. 

Now I'm a bit surprised by that because over the years they've had advertisers and sponsors, but times are tough, and it's possible that money is tight enough at Natures Harmony that they really have to cut their spending to the bone.   You'll find a copy of the relevant discussion below, from their facebook page: 

 

 

 

 Tim and Liz have been tireless in their promotion of their farm, farming practices and products.  They have done more interviews than I can count.  They've been on TV.  They've written books and pamphlets; they've taught classes on how to be a profitable farm, and written a book on profitable homesteading.  They've been a resource for the entire country on sustainable farming.  I'd hate to see that sort of work go unrewarded. 

Got to love these guys - selfless and giving!

So I'd like to see anyone who's appreciated Natures Harmony in any way contribute to them so that they can afford to keep their blog and podcast going.   I figure that if every person contributes $0.25 that it'll make a big difference, and maybe we can send them on a night on the town -- dinner and a movie -- or something else they enjoy.  Remember that they have a new child, and so they'll need a babysitter when you're considering the size of your donation. 

I'll be the first to send them $1.00, and I hope that the funds we raise here will allow them to afford to keep their web presence online and maybe have a night out!   

Please do feel free to tell people about this, and express your support for natures harmony on their facebook page.  They need the encouragement!!

Tim isn't able to recieve money at his email address (tim@naturesharmonyfarm.com) but you can send it to me and I'll forward it to him via US mail or another paypal account if he has one.  Tim, you just need to say where you want the money to go and it'll be there!


Donate to the Take Tim and Liz to the movies fund!  Send it to bruceki@bigpig.net

Natures harmony post mortem...

Natures harmony now appears to be out of the business of raising animals for food.  Their website has been completely scrubbed of all references to anything other than homestead cheese.  He's been busily seeking publicity for his farm and books, and I figured I'd give him a shout out here.   He has also deleted his podcasts from his secondary site, farm-dreams.com and itunes. 

I've written about them a number of times, and one of the things that Tim Young has complained about when I, or other folks, have written about him, is that he wasn't contacted first. 

Here's an example, from his blog, dated 11-28-2009, post titled "The poster child for animal cruelty"

"...you should know that Drovers and ALPHARMA have come to the conclusion that we are cruel to animals.  They base their carefully considered conclusion on perusal of aNY Times article about us several months ago..."

"...Of course, they never attempted to contact us to ask us any questions about our philosophy..."

So today I sent this email to Tim via his website: 

"Tim, you've objected in the past when folks have written things about you or your farm without contacting you first or at all; one case is your blog post "the poster child for animal cruelty" dated 11-28-2009 -- you objected to them writing an opinion without contacting you first. 

I will be doing this article either way, and you're welcome to record anything said so that you can ensure that I'm quoting you accurately and completely -- I plan on doing the same.  "

I've asked him to respond in the next few days. 

Stuff for the spiders:  natures harmony farm, naturesharmony.com Tim and Liz Young, Tim Young, Grassfed dairy, farmstead cheese, Georgia Cheese Author Tim Young farmcast farm-dreams.com farm dreams guide to profitable homesteading accidental farmers

Grassfed dairy: A day in the milking parlor

My dairy cow

One thing that is always a bit touchy for a farmer  is allowing someone into their farm to watch what they do.  For me, as a pig farmer, I'm always a little squeamish about it;  I can never tell what the reaction is going to be when they see a pig placenta, or a pile of manure of some sort.  Piglets are usually a big hit, but, hey, who doesn't like piglets? 

So today I spent 4 hours in a dairy milking parlor watching as the cows were milked.  I really appreciate the farmers trust in me to come and look and experience it.  Thank you, D, for your graciousness.  I appreciate your trust, and to M who put up with my endless stream of questions about everything she did as the herd filed through. 

The herd that was being milked is around 150 cows; they're grass-fed, strictly grass fed, and are managed as an organic herd.  That means that they are only fed organic forage -- in this case, grass that the farmer grows on his own pastures or leased land that he manages, are only treated with organically-approved treatments -- no antibiotics at all, ever -- and bedded on certified organic bedding; in this case, sawdust, but organic straw could be used, too. 

This particular farm is a multi-generational farm; D left the farm as a young adult, and returned with his wife to watch the farm for two weeks one year, and after that and a discussion, they decided that they'd give it a try.  D's father was a conventional dairy farmer, and had done very well during the go-go 80s and had invested in land and buildings during that time, but the dairy business had declined, and when D made the decision to rejoin the farm, he was told, pretty much universally, that he would go broke, that it was impossible to make money, and that it was a bad idea.  "My dad kept the farm instead of breaking it up because he felt there was potential.  He could have sold it many times, but I'm glad that he did.  I saw the potential, too"

One primary difference between the dairy that D runs and his dads is that it's organically certified, which nets him at least 10% more for the milk he produces than for a conventional dairy, and a little bit of a break from the huge price swings of a conventional dairy.  The organic coop that he produces for tries to keep the prices steady, which helps the farmers plan.  They can do that because organic milk is priced a bit more on the shelf -- and if you wonder why organic milk is more expensive, this is one reason why.  That extra margin makes it safer for the organic farmers to do business.  

In order for a pasture to be certified organic it has to be free of chemicals and pesticides for 3 years, so there was a transition time for D, and he had to search for cows that were managed organically, collecting them from a multi-state area when he started.  At this point he's milking the daughters and granddaughters of the cows he started with, having culled the ones that didn't work out for various reasons, and is very happy with the 2nd and 3rd generation milkers. 

The cows collected themselves into the holding area of the barn in expectation of being milked.  An air gate opened, and the cows walked in, lining up patiently.  when 8 had entered, the air gate closed, and each cow was carefully wiped down with a pre-milking sanitizer, and the teats were carefully cleaned with a cloth after that.  "You start cleaning the teats on the far side because if the cow is going to kick a kick on that side doesn't do anything, and you'll know to watch them when you clean the teats on this side", explained M as she worked her way down the 8 cows on this side of the milking parlor. 

After cleaning the milker nozzles were attached to the cow, holding on via the suction of the milkers, and a small window on the milker showed the milk flowing into the collection tube.  For each group of 8 cows it took 3-5 minutes to swab and clean the nipples, and then 2-3 minutes to work down the row attaching the milkers.  While that side milked the 8 cows on the other side were disconnected, and an after-milking disinfectant was applied to the teats.  the air gate opened on the exit, and the cows quietly filed out. 

These cows were silent.  No vocalization at all.  Calm, placid, we know the drill and we're here to be milked. 

Once the milked cows had filed out, the next group of 8 filed in and the process repeated.  For this particular herd there were cows that refused to be on one side or the other of the milking parlor; cows were creatures of habit, and M remarked that you'd often see the same group of 8 cows come in- "this is my milking herd", and, she said, often in exactly the same order. 

I couldn't see the ear tags from where the milker stands in the lowered pit.  I asked about it, and D explained that most of the cows had names, and that after milking them for, in some cases, a decade, they recognized individual cows and knew their names and histories.  "Do you have ear tags for your pigs?  "  no, we really don't.  We know our sows.   "It's the same here.  When you see them twice a day for years you get to know your animals.  We keep records by ear tag numbers, but that's just to remind us.  We know our herd" 

What I was interested in was Ds experience in switching from a conventional dairy to an organic, and he had several things that really caught my ear: 

Veterinary bills:  Conventional was thousands of dollars a year.  Many thousands.  Organic?  We rarely have an entire years bill exceed $500.

Feed bills:  Conventional:  We got two milk checks a month.  Most or all of one went to the feed mill.  Organic:  We do buy a small amount of feed for calves, $300 or so a month, (feeding 50 calves), but that's about it.  We keep the majority of every milk check. 

Milking lifespan of cows:  Conventional?  4 to 6 years to cull.  Organic?  we are still milking cows that are 12 to 14 years old.  Most farmers on a conventional system push their cows for maximum milk production, which burns the cows out.  We go at a slower pace, and as a result get good results for many years.  Lower feed prices helps.  We also feel that the cows are healthier on grass. 

Overall income:  Our total production of milk is lower that it would be if we fed grain or conventional feed, but this is partially offset by the higher price we receive as an organic dairy, and the bottom line, the money we keep, is better because we are not sending more than half our revenue out to a feed mill. 

D's  model has worked particularly well this year.  His feed cost, since he produces it on his land, has not risen as much as commodity feed, but the price he receives for his milk has.  As a result, he's actually making more money this year than in previous years, where many conventional dairies are going bankrupt. 

What are the downsides? 

With a grass fed dairy, you'll see lower milk production in the fall and winter, when you're on hay, and consequently less income.  You will be constantly tempted to grain your cattle (which you can do as long as its organic grain) but D has chosen not to do that because he prefers both pure-grass fed milk and to maintain the disconnect between his profits and commodity feed prices.   D reports that in the winter he gets between 30 and 40lbs of milk per day per cow, with two milkings, and in the spring and summer he gets between 70 and 90lbs of milk per cow per day. 

 You also have to either find a source of organic feed (which has gotten increasingly difficult, to the extent that many organic cooperatives prefer new members to raise at least 75% of their own feed to assure supply), or you have to grow your own feed.

To grow your own feed you may have to invest in equipment to collect that forage.  For the growing season the goal is to have the cows walk to the food and collect it themselves, but in the late fall and winter it's common to have the cows in a barn to conserve the pasture, and feed them hay.  You'll have to either buy the hay or create it yourself with the appropriate equipment and expertise. 

  For a new dairy you may have to buy 2 acres of land per cow that you plan on milking, and that sort of land requirement can be very expensive. 

Managing grass resources takes labor -- keeping the cows on good grass will give you good production, but it may require you to move your cows daily, or even multiple times per day.  So your barns and setup have to allow your cows to walk to and from the pastures, and that requires contiguous land.  

If you already have a dairy there may be several years wait before you can enjoy the higher prices for organic milk, but you will be required to pay organic prices for feed during that time.  You'll also have to change some practices related to medical treatment of your herd, and farmers don't like to change what they know works. 

If you'd like to see another comparison of conventional vs grassfed dairy, take a look at this study: 

Can Smaller Be Better?

It's farming: Marijuana

Ok, I'm going to talk about something pretty controversial here, and if you're offended by this topic, I'd bypass this whole entry. 

A legal crop

I live in Washington state, and the state as a whole legalized Marijuana (MJ for short) in the most recent election, as did Colorado.  The majority of voters in this state decided that prohibition of MJ wasn't working,and that it was time for a change.  Historic vote. 

Some of the immediate consequences of this were that hundreds of pending criminal cases were dropped in the local court systems across the state.  Thousands of cases actually; each county and each city in the state dropped hundreds. 

I think that this alone was worth the vote.  This means that thousands of people are free of legal fees, fines or the threat of jail.  It means that defense attorneys and prosecuting attorneys can spend their time on other cases, and it means that our prison system doesn't have to spend $32,000 per inmate per year to feed and house these unfortunates.   Humans seem to want to get drunk or high, and making it illegal just steers all of the profits into the hands of criminals -- and in the case of MJ, is one of the primary sources of profits for drug gangs that are destroying Mexico. 

I talk to quite a few farmers on a pretty regular basis.  Every single one of them is looking at the possibility of raising some quantity of MJ.  In fact, I cannot say that I've seen anything else capture the attention of every single farmer like this one has.  Unless there's some sort of limit on producer licenses, I think that we may well see tens of thousands of MJ producers in Washington State. 



Doing a little bit of gardening, farm-scale.   Wonder what I could plant there?



The biggest risk that farmers face, other than the obvious gold-rush aspect of this whole thing, and the normal risks of any crop, is that the federal government will crack down on local producers.  Personally I think that they will not.  Anyone charged with any MJ violation is going to ask for a jury trial, and the first question on every jurors mind is going to be "why are they prosecuting this?  isn't this legal?".  It is going to be very difficult to get a jury to convict anyone. 

There are several things that will also happen immediately:

First, the importation of MJ into Washington is pretty much done.  The market for MJ will be entirely local.  Who wants to risk federal charges for crossing a state line when it can be produced locally and legally?  That also applies to BC bud and california products.   People will move the plants here and grow it here. 

Second:  Growers  and folks involved in the legal production will suddenly be able to depend on law enforcement.  The whole thing comes out of the shadows.  If it's legal, it's legal.  I believe that people who are currently illegally producing it will continue to do that, and that those folks will find that the profit for the product drops substantially -- and the old penalties for illegal production are still there.  If you grow illegally, you're risking your money and property to confiscation.  Kind of like moonshining -- the revenue agents will be out looking for that.  If you're doing this under the table it'll get much harder, and the days of $3k a pound are done forever. 

Third:  Suddenly the producers are thrust into the mainstream agricultural market, and honestly, American farms are the worldwide masters of producing crops at the lowest possible cost.   It costs about $500 an acre to plant and maintain hemp crops in Canada -- about 1/5th as much as it does to plant blueberries.  Sure, there's labor involved in it, but I don't think that the current producers have any idea what a legal farm can do.  I think that the price of MJ is going to plummet. 

Lets assume that an MJ plant requires a 4x4 foot space -- 16 square feet per plant.  That's 2,725 plants per acre.  Imagine 10,000 acres planted in the spring of 2014,  and each plant producing about a pound.  That's, in round figures, 27,000,000 lbs.  Twenty seven million pounds. 13,625 tons.  Thirteen thousand tons of MJ. 

Alfalfa sells for $300 a ton.  Wonder what MJ will sell for?    

How many of you would consider this as a crop? 

 



meanwhile, back at the farm...

 

 

600lbs of hay a day; nom nom nom!

I haven't talked about the farm in a while.  It's one of the tough times of the year in the northwest to be farming; the biggest hurdle to cross is keeping the animals comfortable.  A warm, dry place to sleep, plenty of food, and something interesting to do is pretty much what I aim for. 

 

I've been carrying a larger number of cows this year than in previous years; I have 20 of them.  6 are dairy breed heifers, the other 14 are a mix of steers and beef breed heifers, with a black angus bull.  I've owned cows for years, starting with my $5 calves, and I've got a handle on the basics of cow husbandry; I'm nowhere near an expert, but after a few years of daily contact I feel pretty comfortable at my "cow eye" -- being able to look at a cow and make sure that it looks like it's having a good time.   Of my cows, I've got 2 of them that are skinnier than I'd like to see, and I'm debating whether to grain them to put on some weight, or sell them now as underweight, or stay the course and see what they do.  I'm leaning towards graining them and then selling them into the conventional market when they perk up a little, or maybe eating them.  

 

I have a little list of things that I recite when I see the cows each day.  "do they have hay?  is the water trough working?  How does each cow look?  Are they all doing what a cow should, or is one hanging back?  How's the bedding?  Is the area around the hay feeder clean enough, or do I need to clean it now?  Are the fences ok?  " 

 

My little dairy cow is doing well; although she's not so little any more.  I'll weigh her and write up an entry in the next day or two.  Looking forward to her calving, sometime next July if she keeps the schedule. 

 

 

 



Pigs enjoying the warm dry barn

The pigs are doing pretty well; the big hit with them is the new hoop barn.  The entire herd sleeps there every night, with plenty of room for all of them to spread out.  I've been watching the wood chips we filled the barn with to make sure that they stay dry, and so far, so good.  We've only been on the chips for 60 days, but no problems at all.  The surface has remained loose and dry, with no caking or smell, and the pigs much prefer sleeping in the barn to the muddy field -- although they do go out into the field every day to roam around.

This has been a really pleasant surprise -- we've had a very wet fall, with multiple weeks with more than an inch of rain every day -- and the challenge in years past has been to keep their bedding dry.  This barn has done a great job of increasing the comfort of the pigs; which I enjoy, too. 

The pigs have been regularly farrowing; we've had 7 litters in the last 60 days.  We house them at the end of the barn, sectioned off for the sows with litters, and that's worked well, too.  Very happy with the barn so far. 

We have a resident flock of chickens, which keeps growing by itself, and when we get too many roosters I'll sell 15 or 20 of them.  People are happy to get them, I'm happy to sell them.  I figure we have 30 chickens that I keep, the nucleus of a laying flock that I'll use in the spring for hatching eggs.  We've shut the incubators off for the year. 

We do have a few turkeys left; probably 15 of them, and I'll hatch their eggs too; they mix with the chickens and have for years, and while there are concerns, I haven't had any problems.  The chickens and turkeys do a great job of picking up any feed the pigs spill.  We do have to watch to make sure that they have water at all times, particularly during freezing weather, and we do supplement their forage with about 10lbs of feed a day, usually scattered on the ground.  Poultry love to find their own food. 

I don't talk much about the poultry much because they really don't take much time or effort.  Scatter the feed and walk away.  They are interesting to watch, and they have small poultry intrigues.  The roosters and hens all have a social structure that they are very concerned about.

The final entry is the sheep.  The ewes are starting to show; I'll be putting them into the big greenhouse pretty soon here, preparatory to their lambing, to make it easier to supplement their forage with a bit of hay.  The katahdin sheep need good nutrition because they'll regularly produce twins or triplets, and that's a lot of calories.  

So that's the animal update on the farm.  Quiet and productive, everyone hunkered down for the winter. 

The dairy bloodbath this year: "California style"

I've looked  at several farms around me that used to be dairies that are for sale.  I'm in Washington, but as bad as it is here, it's worse in California. 

Here's the background:   One style of dairy that has been increasing in popularity is the "California style dairy.  The basic technique is to confine your cows to a feedlot or barn, bring the food to them, and keep them off your fields.  I've show you guys pictures of this style of dairy -- you'll see one below. 

"California style" dairy

If you're interested in seeing more pictures, check out this blog entry. 

Now this isn't what most consumers think about when they think about dairies.  They have visions of what's on the milk carton.  The red barn and the green grass, and the cow with the bell. 



My little dairy cow -- more what consumers have in mind
 

The basic reason that California style dairying has become popular is that it concentrates your expensive investment in milking parlors, manure handling and labor, into one smaller space.  It's easier to manage with fewer people, and since all of the cows are close, you can mechanize a lot of the work that needs to happen.   You can chop up the hay and feed and shoot it directly into the face of the cows.  And since the cows aren't moving around much, more of your feed goes to milk, and less to exercise.

And the feed.  A lot of these dairies actually feed great stuff to their cows.  As shown n the picture above, there's clearly some good quality forage there -- grass, probably, and alfalfa, and no doubt there's some corn-based feed somewhere in that system.  Our modern dairy cows need all the calories that they can get to produce the 80lbs of milk (roughly 10 gallons of milk) a day that they do.

One of the more expensive parts of a dairy is the manure handling.  In my area, just the manure handling portion of the farm can cost you $500,000 to $1 million dollars to set up.   You wash out your barns periodically, run the manure slurry through a water/solid separator, and  you pump the reclaimed water back into your tank or manure lagoon. 

Current environmental regulations specify that a modern dairy produce no runoff, and it strictly limits the amount of manure that you can apply to fields.  Having it contained allows it to be trucked around or pumped around.  The term for this is "best practices", and a manure lagoon or giant tank is how we as a society have decided we want to handle our dairy cow waste.   Enjoy your ice cream. 

Why is there a dairy bloodbath this year? 
California style dairies typically don't have the amount of land that they need to grow the food for the cows that they are milking.  They are specialists -- they breed and milk cows, and run the milk production side.  They depend on feed from other farms, and, for the dairies that are located in states that don't have enough dairy cow forage production, they have to ship the feed in from where it is grown. 

When feed and transport are cheap, this is a way to make a lot of money, and get a better return on your investment dollar.   Land and facilities are expensive -- why not use them for as many cows as you possibly can?   Corporations are very sensitive to profits, and they're often judged on how efficient their use of capital is.  Return On Investment (ROI) is higher for California dairies when the conditions are right. 

But this year, and last year, the conditions weren't really right.  Two years ago there was a prolonged drought in Texas, causing a demand for hay there that drove up prices.  In the last 12 months we had a huge drought in the midwest, which destroyed crops and forage.  So for the past two years the feed that a California style dairy depends on hasn't been cheap.  In fact, it's been super expensive.

It's not just corn.  Here's a quote from an open letter from a grass fed dairy in Colorado:

"...We dislike doing this, [raising prices to cover the feed cost increase], but the alternative is to sell everything we own and/or file bankruptcy and quit dairy farming. Expenses for feeding our cows and your cows are eating us alive.  "

That dairy is pretty small,and they're in Colorado.  Lets see what dairymen in California are saying:

"everywhere I go around my area I see vacant dairies or places being put up for sale. These are my neighbors – people who have been in the business a long time, some three generations. Now they just want out. It’s the big wipeout.” Dairymen president Tom Barcellos

"Now the issue is feed costs that have surged this summer taking not just corn but soybeans, other grains and hay up to to levels not seen ever. ”There is not enough money from their milk check to pay the feed costs”  California Dairies Inc. CEO Andre Mikhalevsky.

Why is it so bad? 
 Our modern dairy industry has had several advances in both genetics and drug/hormone use that has resulted in cows that produce more milk per cow than has been possible.  They have also made advances in breeding dairy cows, resulting in more female cows being born.   When farmers want to make more money, often the easiest way to do so is to just do more of what you're currently doing.  Milking 300 cows?  Make more money if you milk 500.  Not enough money with 500 cows?  Well, 1,000 cows seems like a good idea.   In fact, there's a dairy that is milking 30,000 cows.  

But it's a lot cheaper to buy cows and confine them to a barn than to buy the land that would normally support those cows.  Bingo.  California style.

Traditionally dairy farmers have weathered the ups and downs in milk prices by being vertically oriented.  50 years ago it was much more common for a dairy to have all of its, or at least the vast majority of its cow feed raised on land owned by the dairy.  What that meant is that the dairyman had much better control over his feed costs.  Sure, a drought will affect anyone who owns land, but droughts are regional.  There wasn't a drought in California this year -- if the dairies were raising their on feed closer to their operation they'd be fine.  But the majority of the feed for California dairy cows comes from outside of California. 

The other thing that farmers did is that they banked the profits from the good years, and used those profits to level out the bad years.   That's what Irwin described to me when I talked to him about it.

What have we done in the past? 
There used to be a price support system for dairy products, that would help cover the costs if milk prices dropped too much, or feed prices rose too much.  It was part of the farm bill, and it's one of the evil government subsidies that people love to complain about.  But the effect to the consumer was that it made milk prices stable.  Who wants $10 a gallon milk?   Consumers, us.  You and I, love stable, low food prices.   It looks like that stability for milk prices is ending. 

 How can you help? 
 Well, actually, the problem is being solved right now.  Hamburger is cheaper this year than it should be because there are over 400,000 dairy cows being sent to slaughter.  It's too expensive to milk them.  The supply of milk will fall, the prices will rise, and farms that have better control over their feed costs or are adequately capitalized will survive. 

If you're looking at investing in a dairy farm, it'd be wise to look carefully at where the feed comes from, and if the farm can produce the majority of what it consumes, as that combination seems to add a degree of stability.