Cultivating Questions Concerning the Bioextensive Market Garden
Counting Beans While Preserving the Grace
by Anne and Eric Nordell of Trout Run, PA
NEON Enterprise Budgets
The Northeast Organic Network (NEON) is a two year research project funded by a USDA Integrated Future of Agriculture and Food System grant. The goals of this ambitious program include: establishing priorities for organic research; developing educational materials for organic growers (such as the recently completed Rotation Planner manual); and documenting the complex decision-making process used in organic systems.
The scientists, farmers, extension agents, and organic organizations collaborating on this project decided one way to achieve these goals is to develop case studies of eleven established organic grain and vegetable operations. To that end, a multidisciplinary team of researchers has been tracking a handful of crops on each of these farms to document weed, pest, and fertility management as well as the yields, nutrient content, and economic return on the crops. For the financial analysis, David Conner, an agricultural economist at Cornell, helped each of the eleven “focal farms” to develop enterprise budgets for some of the crops in this study.
Although we were excited about being involved in this comprehensive research project, we must admit we had mixed feelings about doing the NEON enterprise budgets right from the start. Our reluctance was not due to going public with the numbers, but because economics has never been a driving force behind the goal setting and decision making we use on our farm. Right livelihood has always been a higher priority than profit. Consequently, most of our management practices have been based on what seems right for the land, for the animals, for our customer, ourselves, and the larger society – realizing all along that, being human, we will never get it absolutely right.
We like to think that we operate on the spiritual principle of “give and you shall receive.” So far we feel like we have received a whole lot more from farm life than we have given! It would be impossible – and, in our minds, irreverent – to put a monetary value on these undeserved gifts. The numbers simply cannot account for an economy based on Grace.
Using dollars and cents to assess the return on our crops would be like asking parents to track the money and time they invest in their children to see if they made a profit on child rearing. Yes, a household budget and financial plan may be necessary to make ends meet, but these numbers don’t begin to capture the values, dreams, hopes or motivations involved in nurturing the next generation. Likewise, the bottom-line does not really address our aspiration, vision, our values as farmers.
More specifically, we could not see how a crop enterprise budget would indicate to what extent we were realizing our original goals for the farm, such as relying on the internal resources of the farm as much as possible, keeping our farm a two-person operation, and remaining debt free. Looking at the Big Picture, this sort of accounting also does not highlight the fundamental differences between organic and conventional systems or the long-term goals of sustainable agriculture, including concerns for the environment, social justice, community preservation, and quality of life. Without accounting for these hidden costs and benefits in the enterprise budget, the numbers seem kind of meaningless.
In this respect, today’s false economy really skews the results. Just imagine how different the numbers would look if a gallon of fossil fuel cost as much as an hour of labor, in this way approximating the full costs of using this non-renewable resource, including pollution and the military-political apparatus for protecting the flow of oil.
Likewise, imagine how differently the economic picture would look if each gallon of water used on the farm was priced as high as a gallon of fuel, reflecting the fact that water is fast becoming the world’s scarcest resource and may someday become more valuable than either soil or oil. (Even Monsanto is positioning itself to make profits in the potable water business!) Without factoring in future costs and benefits, we do not see how the enterprise budgets can be used as true measure of sustainability beyond day-to-day economic survival.
Despite our philosophical reservations, we were game to help put together the NEON enterprise budgets for a couple of reasons. First of all, NEON intends to mesh these crop budgets into a detailed description of each focal farm system for the final report. Hopefully, these case studies will provide a meaningful context for the numbers.
Secondly, we are earnest students of agriculture. We thought we should try out this conventional accounting tool to see how it might help us to better understand and describe our farm system. Although we did not exactly fall-in-love with the record keeping process, tracking every step and expenditure produced a much more complete picture of what is involved in raising a crop in our system than the narrow focus on cover crop-tillage combinations in recent issues would indicate. For this reason, we include in this column the NEON 2002 enterprise budgets for two crops featured in our recent photo essay series on alternative tillage techniques (see Spring ’02 and Winter ’03 SFJ).
We also hope that the enterprise budgets might be of practical value to anyone trying to determine if our bio-extensive practices would make a good fit for their farm simply by plugging in their own numbers. We do caution anyone from using our numbers to make that decision for a “number” of reasons. For instance, many of the numbers are very site-specific, such as the prices we receive for our produce, or the costs of land, equipment, feed and live horsepower. In some cases, the numbers represent our best guess, such as the number of yards of compost produced by the work hogs each year. And in other cases, the figures were based on the “going rate” suggested by the researchers, such as pegging marketing costs at 10% of gross revenue, or paying ourselves a wage of $10 an hour.
Putting a monetary value on our labor, in particular, seemed like a real stretch for us since we don’t work by the clock or pay ourselves a wage. In our minds, valuing our time in dollars and cents would take all the fun out of farming and possibly turn the work into drudgery. More importantly, if we had been preoccupied with the return on our labor during the first years on the farm, we would probably have been sucked into the conventional decision making process based on short term profits and technological efficiencies rather than investing our time in the long-term returns and biological efficiencies that have paid off with dramatically reduced weed pressure and the ability to experiment with minimum tillage to preserve soil moisture.
Given our farm goals, we pay much more attention to out-of-pocket expenses than labor, and consider the net return on all of our crops (after subtracting these cash costs) as our salary. For this reason, we added the parenthetical statements on cash expenses, cash profits and “break-even wages” to the enterprise budgets.
Even many of these cash costs itemized in the enterprise budgets may be misleading because of the somewhat arbitrary way they had to be allocated. For instance, all of the farm overhead was allocated to the seven acres under cultivation, resulting in the relatively high fixed costs per acre. Some of these costs could just as easily been spread over other parts of the 90 acre farm, or even our household economy, which is more in line with our image of a truly integrated farmstead.
On the other hand, NOFA-NY NEON coordinator, Brian Caldwell, warns that one of the economic realities of small farms is the imbalance between infrastructure and income producing acres. Speaking from his own experience, he feels that marketing costs, in particular, can really cut into the profits of a small operation. He suggests that marketing costs might run as high as 30% if everything is accounted for, from market and certification fees to interest on truck payments.
Maybe the most unusual allocation of costs in our enterprise budgets is putting all of the expenses of the work horses, and other livestock, against the value of the compost. We decided to account for the horses in this way partly to simplify the record keeping process and partly because we felt it better represented the extra time and expenses required to stable the horses half of every day in order to collect and compost their manure. Looking at the work horse expenses as a fertility input also allows us to literally “spread” their costs around the farm with the compost. This pretty much approximates their contribution to fieldwork because the lion share of the compost ends up in the market garden with lesser amounts being applied to the pasture and house gardens.
Reckoning the animal costs in this way does make for some pretty pricey compost! But most of this expense is due, again, to applying the $10/hour wage to barn chores, an idea we consider almost laughable since we can’t imagine paying someone else – or ourselves – for the privilege and satisfaction of caring for the animals. Besides, we see these barn chores as more a part of our homestead economy than the farm business.
Looking just at the numbers, you might argue that it would be more profitable to leave the animals out on pasture all the time and to buy in the compost. In that case, we would miss out on the satisfaction of doing the job ourselves and lose control over the composting process. Unfortunately, the numbers do not really indicate the quality of the experience or the product. To the contrary, the enterprise budgets actually seems to penalize “adding value” to on-farm resources, like hog composting the manure generated by the work horses. While the crop budgets make this fertility inputs look like a large expense, we see the farm produced compost as a savings in weed, disease and pest control as well as long-term soil quality improvement.
In the same way, the numbers do not give a very clear picture of other farm tasks – or even the crops. For example, the labor devoted to hand weeding the carrots and garlic does not give an indication if this was an emergency effort to rescue the crops or a preventative measure to remove a few weeds from setting seed. Likewise, the crop budget does not distinguish between cultivating or mulching for moisture or weed control, which is why we felt it was necessary to accompany the numbers with all the “comments.”
Lastly, many of the farmers in the NEON focal farm project noted that the enterprise budgets do not give a complete picture of how the crop in question fits into the overall crop mix in terms of marketing, labor management, equipment utilization, etc… To that end, David Conner is applying for a SARE grant to develop enterprise budgets to track multi-year crop rotations to get a better sense of the economics of a diversified farm system using long-term management practices.
David has also decided to report the results in the NEON enterprise budgets on both a per acre basis and based on the actual plot size devoted to the crop because many of the participants were concerned that extrapolating the numbers to a per acre basis could be very misleading. Scaling up, or scaling down, to one acre of production might dramatically change labor and machinery management and efficiency, input costs, incidence of pests and disease, as well as marketing costs and prices.
We would add that several years of record keeping would be necessary to make the numbers more accurate due to all the uncontrollable variables that go with farming. For example, ideal growing conditions in 2001, combined with a high seeding rate, resulted in 240 more pounds per row of mulch-tilled carrots than in 2002. On the other hand, we can already see that extra veterinary and feed supplement expenses for our aging team will likely double our work horse expenses in 2003.
As for practicality, the farmers attending the NEON meeting this winter suggested that the enterprise budgets were simply too cumbersome and time-consuming a tool to use for comparing the relative profitability of different crops on the farm. A much more common form of crop analysis used by the vegetable growers in the group is based simply on tracking the number of hours involved in picking and packing each crop. Since harvest labor is usually the largest expense in producing the crops, this method is a pretty dependable way to get a quick fix on which crops are paying their way. For this reason, David Conner added to the crop budgets the numbers for gross revenue return on labor for picking and packing each crop.
We learned this rule-of-thumb from Mark Dornstreich, a well-established market gardener outside of Philly, when we started farming in the early ‘80’s. At the time, he recommended that a return of $20/hour on picking and packing would generally cover all production costs for labor-intensive high-value crops and yield a fair profit. To keep up with inflation, we now use $30/ hour as a baseline return on our harvest labor. So far, the NEON enterprise budgets we have completed indicate that this rule-of-thumb is pretty accurate.
The enterprise budgets also confirmed what we have always suspected: the time spent on fieldwork with the horses is just a small fraction of the labor required by most market garden crops. Mechanizing the cover crop management, tillage, and seedbed preparation would only shave off a small percent of the time tied up in each crop while significantly increasing the fixed costs carried by our few acres in production. Mechanizing the harvest, especially prepping and packing for market, would provide a much better return on investment.
As for lowering costs with minimum tillage, the numbers indicate it really depends on the method of reducing tillage. No-tilling and ridge-tilling winter-killed cover crops eliminates time spent on preplant tillage, a real advantage at the start of the growing season. On the other hand, mulch-tilling live cover crops, using the horses and our antique equipment, may take just as many passes over the field, if not more, than clean tillage with the moldboard plow. If reducing the depth of tillage in this case does not translate into savings in labor, it does seem to result in a significant savings in soil moisture, making it possible for us to grow high value crops without irrigation.
More importantly, we are not interested in minimizing our time spent behind the horses. To the contrary, our cropping system is specifically designed to maximize the time spent in the fields with the horses as much as possible, partly to benefit their training and conditioning while increasing the return on their care and feed, but mainly because those moments working the horses is what sustains our interest in farming. The problem is, a goal of utilizing the horses as much as possible runs contrary to financial analysis based on labor efficiency and monetary profit. Clearly, we need to develop a horse-powered enterprise budget!
Discing down rye and vetch on May 24, 2002, to create a moisture conserving mulch on the surface of the soil. A couple of days earlier, NEON researchers Karen McCaffery and Steve Vanek collected biomass samples of the cover crop. Lab calculations indicated a pretty typical analysis for what you might expect from this cover crop mix at this stage of maturity. The headed-out rye produced 2.2 tons of dry matter per acre containing 1.3% nitrogen or 57 lbs of slow-release N/acre. The succulent hairy vetch in early bud contributed .9 tons of dry matter containing 3.8% nitrogen or 66 lbs of quickly available N/acre. That’s a total of over 3 tons of dry matter per acre and 120 lbs of nitrogen – a substantial gift for the crops and the soil system from the sun and the atmosphere. These figures do not take into account the organic matter contribution of the cover crops root system.
Shallowly “chiseling” the disced cover crop residues with an old subsoiler equipped with a coulter and wide, ridging shovel.
Checking the soil with a digging fork the second week of July we found adequate soil moisture for planting fall carrots. In our experience, the key to holding soil moisture close to the surface for direct seeding and transplanting without irrigation is minimizing the depth of tillage. Shallow tillage keeps the cover crop residues near the surface to serve as a mulch, and it preserves the well-aggregated soil structure created by the undisturbed rye and vetch root system which is so important to maintaining good moisture infiltration and capillary action. Good soil structure also makes it easy for the roots of the cash crops to forage deeply for moisture.
The 2001 mulch-tilled crop of fall carrots, kale and broccoli after seeding the pathways down to a single row of rye to protect the soil from erosion overwinter. No hand weeding necessary in the 2001 fall crops. To compare with the 2002 mulch-tilled carrots documented in the NEON enterprise budget, see the Winter 2002 column.