Supporting Small Farms (Cost Vs. Benefit)

Hey, Pioneers. Welcome to Episode #363. Today, we are diving into a topic that talks about supporting local farmers, but also, about finding the best cost. This is a listener question that came in and I think it's a great one, because it talks about why is it that, oftentimes, we can purchase something in a larger store, or even imported, for example, I can get six ounces of butter from a local dairy and that costs me $8, but I can buy two pounds of imported Kerrygold butter from Costco for $11.59 cents? Which, of course, it's a little bit more money, but you're getting two pounds versus the six ounces. It seems kind of crazy I can get butter all the way from Ireland cheaper than locally-made butter. So, this is an excellent topic and question, and one definitely worth diving into.

So, today we're going to talk about how can we change this system? Historically, community members we're able to go to local farms and buy their foods, can we get back to that? How do you balance the cost of farming, what you sell your products for, et cetera? So, really great topic and we are going to be diving into it very shortly. On the subject of buying food locally, or at least that is not imported from other countries as much as possible, we are looking at today's sponsor, which is Azure Standard. Now, one of my favorite products is popcorn, and within corn, corn is one of those products that I do my best to purchase organic and popcorn is one of our absolute favorites. I don't know that you would actually think of popcorn usually as being something you would consider a comfort food, 100% is for us. We make it every Friday, tradition is to have a popcorn and movie night here on the homestead.

Way back in the day, I know, I know, we used to do the microwave bags, which after I started diving into, we are talking at least over a decade, so don't start throwing popcorn at me right now. But as they started to look at those microwave bags, the cost, and all of the different health implications by using those bags within the microwave, et cetera, and in good conscience, it just couldn't be something that we were consuming every week. Som then, I turned to an air popper, because you could put your popcorn in there, it was still very much push a button and you would get your air popcorn. We used that for a number of years, but then our electricity went out, as it is often to do here where we live, and I wanted to make popcorn. The generator we had at the time was already maxed out with everything else that was running in the house and the wood stove was going, and I'm like, "Okay, are you a pioneer or not?" Because they would traditionally pop their popcorn, obviously, on a wood stove.

So, I got out my pot and threw some oil in there and put my popcorn in there, and we popped popcorn on the wood stove. You guys, you guys, the flavor of popcorn popped in oil in comparison to an air fryer is night and day. I was like, "Oh my, what have I been missing out on?" And so, we got rid of the air fryer and have never went back or looked back. We don't have the wood stove going in summertime, and I'm not about to sacrifice popcorn night just because it's hot and we're not building a fire, so I'll just do it on the regular stovetop of our regular cook stove, but I love having popcorn. I'm excited, I've been buying my popcorn in bulk from Azure. Now, if you've listened to past episodes, you know that you do need to store popcorn in a airtight container, but do not add oxygen absorbers, because popcorn has a higher moisture content than a lot of your dry goods.

You know that this is essential because if your popcorn gets too dried out when you go to pop the kernels, that's where you'll have a lot of them won't pop and/or they only pop halfway. Usually, that's because it's actually gotten too dry during storage. So, the optimal percentage for your popcorn, however, is above the percentage if you have it in a container where you've got an oxygen absorber in there, where you actually could have botulism issues. I know, you're like, "What?" Yes, it's actually true. So, you can store your popcorn in an airtight container, just don't add an oxygen absorber, super easy peasy to do. So, I buy my popcorn in bulk, have for a number of years now, and I'm actually excited. I've gotten their organic, which most of their popcorn that you can buy in bulk from Azure Standard is an organic, country of origin is the United States, but I'm excited to try this new variety.

I always get the multicolored popcorn around the holidays, because it looks so pretty in jars and I like to give little food baskets out, and so I'll just put that down into smaller mason jars and that will be something that we give out as gifts. But they have, I've not tried this variety yet, but I'm going to try with a small variety to see what I want, and it is the mushroom popcorn. It's organic. Now, you're thinking mushroom popcorn? There's no actual mushrooms in there, but it has the largest expansion rate of any kernel available anywhere, so it's the actual variety, so it looks like a really large mushroom popcorn blossom. I'm excited to try it, because I do like to have the large, fluffy popcorn, so I am popping that on my order that's going in this week.

If you are new to Azure Standard or you've not heard of them before, we have a special offer through October 31st of 2022, and that is to use the coupon code MKN10. MKN10 gets you 10% off, for first time customers, of an order of $50 or more. There's many, many things. I buy a lot of my items through Azure Standard, have been using them for a number of years now, and I think you will be thrilled to discover them too. So, if you've used their mushroom popcorn before, let me know what you think about it. I am adding it to my order and will be trying it out for the first time this month.

Now, back to our episode at hand. So, Tara sent me in this email as a podcast topic and I thought it was a really good one for us to dive into. She actually lives in my area, however, this is really universal to any area and any farm. So, one of the things that, in particular to our area, and many of you may notice this in your spot, too, is a lot of our local organic farms in our area, actually, I live in Skagit Valley, which is in Washington State, there's a lot of organic farms in Skagit Valley, in particular, and on this side of the state. There's actually a large amount of food production that happens here and it's one of the most versatile farm areas, meaning there is a lot of different crops, diversity-wise, that's grown. So, we are not an area like where you would think of in a lot of the Midwest, where you would just see fields and fields of corn or fields and fields of wheat. So, per square footage in the valley where we live, we've got a hugely diverse crop and product production here.

However, some of the local organic farms in our area, they only send their products to farmer's markets down in Seattle and they aren't attending the local farmer's markets, or they don't have a presence with booths where you can actually buy them at the local farmer's markets. Everything gets shipped down and sold down in Seattle, which is about, well, it's about two hours from where I am, but an hour from some of the larger cities, because I'm actually pretty far out. And then there's some of these local organic farms, they do have farm stands, but their meat is priced at a very high price. So, Tara's question, and this may be one that you've had and I think we really need to dive into this, how can we change this system? It seems so upside down. I know historically, community members did go to local farms for their food, my great-grandparents did, can we ever get back to that? Ultimately, couldn't the dependency upon big stores kill our small farms, and how does your farm balance the cost of farming and what you sell your products for?

Because many of us know the importance, or hopefully, if you are listening to this, are becoming to realize, if you didn't already, the importance of supporting small farms, supporting local, for a variety of different reasons. One of them is, of course, community sufficiency, which I've dove into quite a bit here on the podcast. If you've missed an episode where we really get into that in more detail, we'll link to that in the show notes, so that you can get back to that. If you want to look at any of the links that we'll be referencing in today's episode, I have a blog post that accompanies every episode that's written out for you and has links to go deeper into specific areas, so you can find that melissaknorris.com/363, just the number 363, because it's episode number 363.

So, let's unpack this, let's dive into this. So, first off, in particular to the butter part, but really, when you're looking at these larger farms, so even though Kerrygold butter is being imported from Ireland to the US and you're like, "How on earth can it be cheaper for me to buy this imported butter that's being shipped all the way from Ireland and imported than it is from my small local dairy?" Volume. Volume. Kerrygold is a huge, huge corporation, at this point, and I do buy Kerrygold butter when I run out. It's a good product, from the research that I have done. Ireland does do more grass-fed cattle than we have here in the US and grass-fed is better, on all accounts, than grain-fed, because of omega-3 versus omega-6, beta-carotene, which grass-fed cattle have higher levels of beta-carotene, which is why they're cream and why Kerrygold butter, if you look at it, is that deeper yellow, it's that richer, darker color and that's why. So, Ireland is known, way more so than the United States, unfortunately, for raising their cows in that manner.

But that being said, Kerrygold is not one farm, Kerrygold is lots of small farms and does mass volume. So, a dairy that's operating on large volume is making lots of different dairy products. So, they are removing the cream from the milk, because, obviously, our butter is made from the cream, and then they are doing skim milk or they're doing 2% or they're making lower-fat yogurt, or whatever, but the butter and the milk are really two separate commodities, in most cases. Regardless, on that aspect, when you're doing large volume, if you are selling 100 items and you can sell 100 items at $5 a piece, you're making 5,000 bucks, versus a smaller farm, they don't have that much, they can't sell that much volume to make that much money, so they have to charge more for the smaller items. So, it's really anytime you go large volume, it brings the individual price down, because you have the ability to invest, one, in equipment that can make the job easier, more streamlined, et cetera, because you've got that vast amount of income coming in.

Now, while big companies do have overhead costs that you might not necessarily have with a small family farm, you also have different tax breaks, different things once you're operating as a larger business. There's pros and cons and there's a lot to dive into there, as far as cost of doing business, if you're a large corporation, and in tax benefits versus profit margin and all those different things. But if you're running a large corporation and doing a larger thing, usually, there's more areas that you're able to save, at least from that aspect of it. But back to the cost of things. So, with a small family farm, you've got a much smaller amount of product to sell and because you are not buying feed in bulk and you're not buying the other supplies in bulk. So, for example, we just got a dairy cow this year. I have had beef cattle and chickens and all the other farmyard livestock, et cetera, for decades, but this is our first venture into dairy, and so I had my startup costs.

Regardless that I only have one dairy cow, I still had to buy my milk jars. I didn't have enough gallon glass milk jars to be able to keep up with the supply, and they are not cheap. Now, if I can buy them in bulk, I get them at a cheaper amount per jar. Now, of course, it's more upfront because I'm buying a larger amount, but when you actually do the math out, my bottom line operating costs are less per item if I'm doing it in large bulk. So, if I had 10 dairy cows and was ordering enough supplies for 10 cows, that would bring the actual gallon of milk price down, because my actual cost per gallon of milk would be going down because I could buy in bulk, and so that's really also true of small family farms versus these larger corporations. You can't compete, you just really can't compete as far as Costco, because you're not able to buy in bulk, so there's that aspect of it.

And then when we're talking about some of the farms selling in different markets, so for example, there is local family farms that I know and if they take their item to a Seattle farmer's market, they're able to get almost double the sale price, they can charge double down there, and it will get purchased. So, yes, they do have the added cost of fuel, in order to get it down there, they're driving further away, so there is that, but when they're able to actually charge double, it's still outweighing that added fuel cost and time, et cetera, in order for them to sell down there. So, there's also the argument of, well, if we all sold locally to one another and we shopped and we bought locally, we would have less fuel costs, there would be less infrastructure needs, our roads wouldn't be wearing out as fast, there's all those different things. Those do have their place in the conversation, but as we're as a consumer, a lot of us have a harder time looking at the price points, most people aren't willing to pay a significant amount more to buy local.

Now, some people do completely understand the difference and oftentimes, it's understanding the difference in the way, and we've talked about this a lot in past episodes, on the quality of the actual end product. Because a lot of times, people get hung up on price comparing and they look at what a pound of ground beef costs at the grocery store, but they aren't realizing that at the grocery store, in most cases, you are not able to get grass-fed, grass-finished beef that was born, raised, and butchered on-site, meaning that animal never had to travel to a slaughterhouse, never went through that experience and all of that. It's very hard to find at a grocery store that meat, it just is. Yes, you can find grass-fed and grass-finished in some grocery stores, it's harder in some than others. Yes, you can find that product, but usually, in those cases, those animals have not been born, raised, bred, all the things, on one farm and in one place.

Usually, you only find that from small farms, because when you get to be these bigger operations, they're having two truck the animals to the actual slaughterhouse, and there still are ethical slaughterhouses and that type of thing. But then you also get into what you're buying at the grocery store, how long has that been at the store? There's so many different things, but most of us look at the costs per pound, or the price that's hitting our pocketbook. That's a pretty normal way for people to judge things, because if you've never really went beneath just the service level and really understood the difference in meat and how modern agriculture and meat processing, et cetera, is, you don't even realize how much of a difference there is. So, that's why your smaller farms do have to charge more per pound, there's just a lot more that goes into that, and they don't have the volume in order to get cost breaks, price breaks per item, or to spread the cost of that around more like you do when you just have a lot larger, vast product system.

Can we ever get back to that? Yes. I do know that some local farmers, and some of this is also education, going to these local farms and saying, "Hey, I'm interested in purchasing from you. This is what I would like to get. Is there a way that I can get some of this at this price?" Highlighting for them, "You're not going to have to pay an employee to sit at the farm stand, I will come and get it right here. You're not going to have fuel costs, you're not going to have your booth costs at this farmer's market. I'm going to come buy directly from you, but because you're going to be saving all this cost, can I get this for X, Y, Z per pound?" They may say no, but they might not even realize that there's people locally that would buy from them and how that actually could benefit them. So, some of it is really communication and that's community, is getting to know these local farmers.

I do know other local farmers that do a bridge model, and so they'll take the first part of their crops when they come on, the first part of the harvest, and they will sell them down at the Seattle's markets, because they can earn so much more. And then after they've met this is the amount of income we need to make to at least break even or hit into a profit margin, into the black, where we're making a profit or have at least broke even, and I want to see every single business... No business should be operating to break even, everybody should have some type of a profit, because just breaking even, you're not actually making anything, and I don't think any of us would want to be in that position. We all want to have a little bit extra to put in savings accounts or whatnot and to buy stuff that we need, not just cover operating costs.

So, that being said, once they've met that point, for the last half of that harvest season, whatever the crop is, then that is the items that they will sell locally to people, in either at local farmers markets or they'll let local people come by and pick up boxes, et cetera. So, that, I think is a really good model and that's the way that we're going to bridge, so that they can see, "Hey, you do actually have a local buying community and it can help cut your costs and you're providing this to the community." So, I think by approaching some of these farms, that could be a great way to educate them and show them that and move towards more local foods being raised and purchased and bought in the local community, rather than shipping them off to a couple hours. Even though that is still fairly local, it's grown in a place and two hours away is where it's being purchased, in regards to what our overall food system looks like in the United States, but really worldwide, that's still extremely local, but I think you could get back to that.

Yes, dependency on big stores has definitely affected small farms. That's why you see less and less small farms, or you have seen where there were a lot of farms... The definition of small is also perspective. But the average age of farmers in the US now, you're getting up until 50, I believe the stat is 55 to 65 years old, that's the average age. The reason that's the average age is because children and younger people, they're not taking over the farms, they don't want to be in farming. So, then, you've got where this farmer has this farm, he can't find anybody, his kids don't want to do it, and by the time he hits where he's ready to retire or simply can't do it anymore, they just are closed. They're no longer producing food, they go out of business. The land is fallow, there's not crops being planted there. So, dependency on big stores has put a damper on the amount of farms that we have in the US.

However, as we have seen, and especially brought to light during the COVID pandemic, is we have a very broken food supply system. It's actually quite fragile. Now, this is not a scare tactic or whatever, this is just reality. I think it's much better to operate from a place of reality, not from a place of fear, but just from a place of this is actually the reality, so that you can be prepared so there's no reason to be afraid. So, people saw, especially during the pandemic, and even prior to that, I think there was an awakening, but I think the pandemic really fueled that, that by outsourcing our food to these larger corporations, all of the things that are just... Not all big corporations are evil and do bad things. I know that we can tend to paint things with a paintbrush and it's really easy to do that, but that's not the case of all large corporations, and so I think we also need to be careful when we're looking and having these discussions about that.

But we've seen where you've got a lot of processing going on, there's a lot of questionable practices, and people have been looking back to getting to small farms where they know how the food is raised, either growing it themselves or wanting to buy from a small farm, so they actually drive by the farm and they see what do these cows look like? Are they on pasture? What do these chickens look like? Are they actually on pasture? Are they sitting in cramped conditions? Are they just on bare dirt? They might say pasture-raised, but if they're just on straight dirt all the time, I don't consider that pasture-raised. They need to actually be on grass, that is pasture-raised, in my opinion. So, I think more people were already shifting to that, because they want to see that the conditions of it is... And also because of the actual nutrition that's available in the food how it's raised, even our soil health.

If you don't have good soil health practices, using regenerative-type things, you're just pouring synthetic nitrogen on the soil, over time, the soil is losing and losing and losing, because plants take stuff from the soil, especially annual crops. Yes, I have never planned on not growing annual crops, we do an annual vegetable garden, however they take a lot from the soil. If you are not composting, adding in aged manure, adding back things to the soil, it does become depleted. Nitrogen is required for plants to grow, yes, but nitrogen is not all of our nutritional needs being met. So, we have a case now where our food actually does have, in a lot of instances, less nutrition, because the nutrition is not in the soil for the plants to be able to absorb and therefore give to us. So, a lot more people have become concerned about this and are looking at those smaller farms where they can see the practices, talk to the farmers, have a lot greater awareness and also buy local.

So, could dependency upon big stores kill our small farms? Yes, and they have definitely had a negative effect, I think, on small farms to begin with. But on the flip side, they're actually causing people to seek out small farms again. If there is demand, you will see farms and places rise to meet the demand, if the demand is there. That's just the general way of business and in life, in general. So, sometimes it takes a while, though, in order for operating costs and demand, so there's so many things at play here, as we've been talking about in this episode, for them to even out, and you have to make that decision, too. Yes, it does come down to budget, I completely understand that. For us for example, we're able to save in a lot of areas in our food because we do raise so much of it ourself and I do buy in bulk, even buying my bulk food.

As example, buying in bulk from Azure, because I'm able to buy those in bulk, I'm paying less for pound than I can get at certain grocery stores. There's a lot of products that Azure carries, actually, that I can't even find at our local grocery stores even if I wanted to, but there's that aspect. So, I look at our household and what I am saving by making a lot of these things ourself, from scratch, and/or raising these things and putting them up and not buying them from the store, and then therefore, I've got that allowance in my budget for the things we do buy, that I can afford to buy them local, even though they cost more from my pocket right out the door, knowing that down the line, that's still going to be beneficial and hopefully, that will allow these small farmers' prices to come down.

With inflation that we're seeing right now and the way that food costs have went up in such a short period of time, I've seen literally stuff I bought at the grocery store four months ago has increased just during the summer, sometimes almost double, if at least not 25% in just a few months, and that's a pretty big jump. I don't know that I've ever personally seen this many products go up that fast in cost that this fast in my lifetime. So, this is actually really great for small farms, I always try to look at the silver lining, because now, small farms, their prices don't look as expensive as what you're getting at the grocery store and it's leveled the playing field. Some of the other issues, when you look at large corporations and large farms like that, is some of the other issues with pricing models, that I don't think general consumers are really aware of or know about as much, is when you're looking at really large farms and crops is they are subsidized by the government.

So, think of high fructose corn syrup and a lot of these different things that are put into crops and corn, and a lot of these different crops that are grown, there's specific ones, but they're subsidized by the government. So, because the government is subsidizing the cost, they don't have to charge as much, because they're actually getting money from the government in specific situations, sizes, crops, et cetera, but the general consumer doesn't know that that's why this product is so cheap. It's not actually what it costs to raise that product if there was no interference or subsidize, et cetera, from the government. So, it's actually created a very unfair environment for the small farmer, because most small farms are not getting subsidized things from the government. They're having to charge with the two true cost of the product is, but you don't realize that in, not all crops, but in a lot of instances, that's not actually realized.

So, now, with inflation, what small farms have had to charge for their products is now closer to what people are paying in the grocery store. So, I actually think that we will see more and more people move back to purchasing from small farms, and therefore, if they're doing greater volume, they're going to be able to charge less and be more competitive without having to cut corners in the way that the food's being raised with some of the supermarkets. Now, will they ever be able to be charging as the exact same price as really big large corporations, where there's that whole volume breakdown? That, I don't know, and probably not. I don't have a way of seeing into the future, but I would say not, but I think that they will get closer. Now, balancing our farm and the cost of farming and what we sell our products for, that is a definite balance.

Part of that is going to come down to really looking at what your costs are and seeing, can I buy this product in bulk to save some per pound, whatnot, on feed costs? Can I continue to improve my pasture and my soil so that it produces more without me having to put more inputs in? Can I get the soil health up, so this is going to produce more per square foot? Obviously, the more I produce, the more volume I have, but my costs have went down, so therefore, I can pass that onto the customer and I have a larger profit margin. What's interesting is, for example, with us, and our farm is extremely small in comparison to even full farms. The reason I say that is because our main goal with our farm has been to feed us, it has been to feed our family and then offer a few extra beef to help offset that cost, because we do have to purchase hay.

With the growing season that we have where we live this far north, you're never going to be able to do grass-fed all year on just the pasture without having hay, which is grass hay that we still use, and so we will raise enough for our needs and then just a few extra to help offset that cost. So, we usually butcher two to three cows a year. When we do pig, same thing. We keep a pig for us, we'll raise a couple extra and sell those extra whole or half pigs to people to just help offset our actual costs, so that's actual feed costs, as well as the animal costs. So, when we're doing hogs, I'm not breeding pigs and keeping them all year round, we're purchasing the piglets from another local farmer and then selling those once they're ready to butcher as whole or half hog. So, we take into consideration this is what my feed cost is, this is what my animal cost is.

We don't actually take into account our time, because my husband and I both work other jobs that we've got that money coming in for, so we're not having to pay ourself an hour hourly rate in order to make ends meet from our farm products, because our farm is not our sole income. It's a side that feeds us and then generates a little bit of income to help offset those costs. But if we were operating it as a full farm business, you would have to account for the hours. If you don't have any other income coming in, either you as the farmer per hour, or if you are to the point where you need someone else to help, you're of that size, you have to pay somebody a farm wage as a farmhand, then you have to count that in to your bottom operating costs, and then charge accordingly on your products to make sure that that's covered. As I said, I think everybody should charge enough that they are making a profit. I don't think anybody should be expected to work for free.

I don't think you would ever go to a job and be like, "Oh, well, I'll work for free today. You just cover my food and feed me for the day." Very rarely, every now and then, you might do that as a special favor or something like that, but as your every day, weekly, monthly, et cetera, income, you can't do that. I don't think that we should expect anybody else to do that, especially people who are raising our food. They should be making a fair wage, as well, or at least some type of a profit. So, we look at what our cost of just feed is and then the cost of the animal and we charge accordingly per pound, because that's generally how we do the hanging weight of the beef and the pork, and we charge per pound based upon that. Now, is it unfair that I'm actually not charging an hourly wage because other farmers do have to charge an hourly wage if they're bigger than us? Possibly.

If we get to the point where now that we've got the extra 40 acres from the farm stay that we just purchased so we can raise more cattle, if it gets to the point where we do have to hire help, I'm going to have to factor that in and that will cause us to have to raise our prices some, but we're already well below what you would ever pay at even really the grocery store for grass-fed, grass-finished beef. We're already extremely competitive, and part of that is because I want people to have this high quality of food and make it as affordable as possible, yet, at the same time, you have to make a little bit of money in pricing. So, for us, because our farm is not our sole income, I'm able to keep prices a little bit lower. But that's something that my husband and I, we've been talking about as we move forward and we're looking to add more cattle, and as we add the cattle, we've got the upfront price of buying breeding stock.

And then with cows, you've got a nine-month gestation period and then those calves need to be two years old before you're butchering them, so you're really looking at three years before you earn any money back, so that's a thing, too. So, as we're looking to expand, looking like how do you keep operating costs going until you've reached that part with your herd? So, it may mean that we have to raise prices next year, so it's a constant dance that you have to look at. And then some of the other things is where can we bring our costs down? Again, I said buying in bulk or batching things, systemizing things, so that we are spending less time on certain things, things are more efficient. Just all of those different things that we look at to try to keep the cost of the farming down as much as possible, so that we don't have to raise prices on the end product to the consumer.

So, anyhow, I hope that this gives you some different food for thought, or maybe it raises things that you hadn't thought about or didn't realize about some of the food system yet. I would love to hear from you, in your area, if you are a small farmer, different things like that. I think this is a really good conversation, and by no means have we covered every aspect of this conversation or even every point, but I think it's a really good starting point to be thinking about these things, talking about these things. How do we solve these things? Can we solve them completely, or at least what are some of the small things we can do that at least can add up and make a difference, that type of thing?

So, I would love to hear from you guys what you think on this topic. You can leave it in a review wherever you're listening to this podcast, in a comment if you're listening to it from the website directly, et cetera. But I would love to hear your feedback, because this is actually very, very important stuff that we need to be thinking and talking about. So, Tara, thank you so much for sending this in and I look forward to hearing from you guys. I'll be here with you next week. Blessings and mason jars for now, my friends.