Success With New Farm Products
If we don’t grow tobacco, what else can we produce on our farms and sell for a
good enough profit to make it worth our time and effort? And just as important
as what is grown are the marketing and business techniques needed to be successful.
Nearly half of Kentucky’s 90,000 farms still normally grow some tobacco each
year. Those 45,000 tobacco farmers aren’t jumping into something new without
some careful thought. Most are taking a gradual approach, cautiously trying
new activities, often while still raising some tobacco, and counting every dollar
of new expenses (as well as income) as they go along. Here’s a look at some
of the most likely alternatives to tobacco culture and how farm families are
making decisions about starting new traditions on their farms.
Scott County farmer Kevan Evans recalls how he and his father originally planned
to simply diversify their farming and reduce their dependence on tobacco. “We
saw how successful one of our neighbors was growing vegetables, so we started
with two acres in 1993. We found out real quick that it took about twice the
labor as tobacco! But that was about the same time so much migrant labor was
coming into Kentucky and we found we could use those workers in between the
tobacco cycle.
“During those first few years,” Evans continues, “we did a lot
of ‘trial and error’ stuff. And we found out that we had to answer two questions.
It wasn’t just ‘what can we grow?’ We also had to know ‘what can we sell?’ “
That’s why Evans and other area farmers trying vegetable crops instead of tobacco
eventually organized their loose-knit group into the Central Kentucky Growers
Association, a co-op to process and market their vegetables at the wholesale
level.
That led to the successful construction of a processing plant on land donated
and prepared for use by Scott County, and paid for in part with federal and
state grants. At the new plant, machinery and workers can wash, grade, and box
whole fresh vegetables such as cabbages, bell peppers, and pumpkins, then have
them ready to ship to markets such as grocery chains and restaurants.
Jim Mansfield, statewide Director of Marketing for Horticulture and Aquaculture,
says, “Here in the Kentucky Department of Agriculture, we think participating
in co-ops will become even more important for farmers’ success in the future.
Joining with others to market new farm products, whether it’s vegetables or
fish or fresh-water shrimp, will be essential because the markets for these
products are so consolidated.”
As one farmer puts it, “Most farmers are production oriented-and I found
out that my marketing skills are very weak!” Forming processing and marketing
co-ops means farmers can hire someone else to handle the sales end of the new
venture, while the farmers concentrate on what they do best, raising and harvesting
the new crop.
In addition to the new Central Kentucky Growers facility in Georgetown, during
the last three years the Kentucky Department of Agriculture has combined $1.7
million of federal and state money to help start or improve other vegetable
marketing facilities throughout the state. The West Kentucky Growers Cooperative
in Daviess County, the Green River Produce Marketing Association in Hart County,
and Cumberland Farm Products-two facilities in Wayne and Russell counties-are
giving Kentucky farmers in other regions the opportunity to compete with more
established suppliers in other states. During their first three years, sales
for these new co-ops have increased from $1.6 million to $4.7 million, with
the processing facilities already running at capacity for many crops.
Another Scott County farmer, Tom Fister, found out that timing was crucial to
making a profit in vegetable production. “There’s a certain window of opportunity
between when the more Southern crops ripen and before the more Northern ones
come in,” Fister explains. “If you time things just right, about the
first part of July, you can sell green peppers for $10 or $11 per bushel box.
But if you miss it, the price goes down pretty drastically.”
Instead of selling to distant markets with variable prices, some farmers are
happy to have customers from nearby towns and cities come right onto the farm
where they can have some control over the prices. Fister’s diversification plan
for the farm he maintains with his brother includes 20 acres planted in pumpkins
for a U-pick operation. Attracting school tour groups during the week, and city
and suburban families on the weekends, the Fister brothers’ farm offers a total
farm experience: pony rides for the kids, a huge pumpkin patch, a petting zoo,
and a sales shed with everything from jars of jams and jellies to crafts to
hot foods.
“We offer a unique mix to our farm visitors,” Fister says, “and
since we have other families running these activities and only take a small
share of their profits in return for providing the space, we feel that we’re
helping a lot of people in our community earn money, too. And our food sales
are helping fund FFA scholarships.”
But not every farm that used to grow tobacco on five or 10 acres can be transformed
into such a hub of activity, as Fister notes.
“One day we counted up 13 U-pick pumpkin farms in a 50-mile radius-and
that’s just the ones we know of personally.” The local market may be reaching
the saturation point, so staying aware of the competition is yet another problem
facing farmers trying to decide which direction to go as they leave tobacco
behind.
Market conditions in Graves and Calloway counties in the far western section
of the state seem to favor commercial quantities of pond-raised catfish. The
Purchase Area Aquaculture Co-op is building a plant now with the capacity to
process one million pounds of catfish per year, with 183 acres of catfish ponds
on area farms already committed to supplying fish to the new processing center.
But with the cost of preparing even a one-acre pond for raising catfish at $5,000,
changing from tobacco cultivation to aquaculture requires a tremendous amount
of capital investment and a major commitment to learning something new. How
can a farm family decide what’s right in their situation?
A new publication from the UK’s Cooperative Extension Service, titled A PRIMER
for Selecting New Enterprises for Your Farm, offers a series of questions and
thinking points to help a farmer evaluate his or her situation and the various
choices. Focusing on six areas of concern, the questions deal with:
Profitability
Resources
Information
Marketing
Enthusiasm
Risk
The PRIMER booklet, available from local county Extension Service agents or
online at UK’s agricultural Web page (see side bar, page 25), includes several
“yes,” “no,” “maybe” style worksheets to help
farmers narrow down the choices, then more specific worksheets to see how to
compare the likely gross and net income from different choices and make reasonable
evaluations of the chances for success. Figuring out in advance what new equipment
will cost or how much labor will be required at harvest time can be a real eye-opener.
If all this sounds like a “How to Succeed in Business” seminar, that’s
because the reality of farming in today’s changing economic conditions means
paying attention to more than just the production side of the farm’s operations.
Developing a marketing plan, investing in new equipment, learning new skills-the
changeover from tobacco to other farm activities means more than just planting
a different crop in the fields. Whether or not a farmer is trying to figure
out how to best use tobacco settlement monies or planning to apply for a commercial
loan to make the changeover from tobacco to something else, careful advance
planning will be one key to success. Financial Service Officer Sharon Lott,
of Farm Credit Services, says, “Farming is not just a way of life-it’s
a business, too, and people have to think of it that way.”
Kentucky Farm Statistics
FARM ACRES IN:
Hay 2 million
Soybeans for beans 1.2 million
Corn for grain or seed 1.1 million
Wheat for grain 408,771
Tobacco 255,053
Popcorn harvested 21,228
Oats for grain 1,476
Vegetables 4,416*
Orchards 3,537
Strawberries 193
Rye for grain 983
Sorghum for syrup 192
Sunflower seed harvested 41
Maple trees for tapping 31
*ACRES IN VEGETABLES INCLUDE:
Asparagus 33
Beans, green lima 6
Beans, snap 168
Beets 7
Broccoli 40
Cabbage, head 202
Cantaloupes 184
Cucumbers 102
Herbs, fresh 8
Kale 24
Lettuce 17
Mustard greens 19
Onions, dry 10
Onions, green 4
Okra 5
Peas, green 2
Peppers, hot 38
Peppers, sweet 316
Pimentos 127
Potatoes 1,133
Potatoes, sweet 84
Pumpkins 820
Spinach 12
Squash 100
Sweet Corn 1,382
Tomatoes 562
Turnip greens 12
Mixed vegetables 21
Watermelons 167
ACRES & SQUARE FOOTAGE OF:
Nursery, greenhouse crops,
& sod-In the open 9,320 acres
Under glass or
other protection 7.9 million sq. ft.
QUANTITY OF INVENTORY IN:
Poultry (broilers & other) 16.4 million
Cattle and calves 2.4 million
Catfish 583,000
Horses and ponies 95,932
Quail 42,073
Sheep and lambs 21,664
Rabbits and pelts 9,121
Goats sold 5,383
Ducks 4,180
Turkeys 4,155
Colonies of bees 4,053
Geese 2,481
Milk goats 2,043
Agriculture Resources
Call your local county Extension Service agent, or visit this Web site:
www.uky.edu/Agriculture/AgriculturalEconomics
Click on Tobacco Settlement-Phase I and read along until you can click on PRIMER
Workbook.
You can also reach the PRIMER direct at:
www.uky.edu/Agriculture/AgriculturalEconomics/publications/ext2000-13.pdf
You’ll need the Adobe Acrobat Reader, which you can download free, to read this
file. If you do not have that software, click
here to download.
Contact the Kentucky Department of Agriculture at their Web site:
– Click on the horticulture market section for a virtual tour of a new vegetable
processing and grading facility.
Useful Ag Web Sites
Agripedia, University of Kentucky College of Agriculture http://frost.ca.uky.edu/agripedia/links.htm
American Soybean Assoc.
Census of Kentucky Agriculture http://govinfo.library.orst.edu/cgi-bin/ag-state?kentucky
Farm Credit Services of America
Kentucky Agriculture Statistical Service
Kentucky Aquaculture Assoc.
Kentucky Assoc. FFA
Kentucky Cattlemen’s Assoc.
Kentucky Cooperative Extension Services
Kentucky Department of Agriculture
Kentucky Fair & Exposition Center
Kentucky Farm Bureau
Kentucky Corn Growers Assoc.
Kentucky Soybean Board & Assoc.
Kentucky Vegetable Marketing Cooperatives www.state.ky.us/agencies/agr/Hort/Fruit_veg/cooperatives.html
National Cattlemen’s Assoc.
National Corn Growers Assoc.
National Pork Producers Council
