March 18th,2021
So; how to continue to exist and stay profitable as regulatory costs soar and the price we get for product creeps up at a much slower pace? I’m going to give you a short rundown on how the industry and Elmridge got where we are today.
Disclaimer: I know this next bit is going to seem like doom and gloom but I just want to give you the full story. We remain optimistic about the future but very much frustrated with our single biggest roadblock; one-sided government regulation. Ie. Pile on the regulation for “the good of society” but give us no way to recoup the associated costs. My hope is that by telling my story to all of you, someone is going to be in the position or have the connections to help create positive change.
I was born at a very early age……wait; too much detail….start again…. (I’ve always wanted to use that line)
March 18, 2021
During the summer of 1991 between my third and final year of my bachelors degree in plant science I grew my first vegetable crop, an acre of sweet corn. I’m not sure where I got the energy from. For four months I worked full time at the Kentville Agriculture Centre, another 40 hours a week on the farm (that’s part time in farming terms) grew an acre of sweet corn, some carrots and some peas. I also spent way too many nights out late with my friends……In a period of four months I took home over $14K (that’s about $27K in todays dollars). Tuition and residence with a meal plan was about $7K so I had another $7K for fun. Beer was under $20 for a two-four. Gas was forty-something cents a litre. Life was sweet!! I graduated with zero debt and pretty much zero dollars…..it was a great final year:-). It’s a good thing I had no debt because the next 11 years were going to be really tough. Had In known in 1992 what lay ahead I’m sure I would have taken up an offer to continue on to my masters degree. Don’t get me wrong; I am happy with what we have accomplished over the years but, in the words of a local farmer back in the 90’s, "I wouldn’t wish it on anyone”. Let me say that I understand what he said much better now than I did then. At one point in 2002 Suzanne was at home with a two year old and a baby, I was working 80-90 hours a week. My take home pay was less than $11k and we paid $6000 in rent on our house. I was making much less than poverty wage in an attempt to build equity in the farm. In fact I’m pretty sure that put us at just a fraction of the poverty line income of those days. Thankfully that was rock bottom for us.
Talk at the end of the 80’s and early 90’s had been that agriculture was just going through a tough patch and things would quickly turn around and everything would be back to optimism and prosperity. Well that certainly didn’t happen. I think it’s completely fair to say that agriculture in Nova Scotia has been in recession for 30 years now. I’m 50 and I have never farmed without facing an uphill battle and daunting odds. The worldwide industry has managed to continue mostly through consolidation of smaller farms into ever larger units that capitalize on the efficiencies of scale. The bigger the operation the better use it can make of mechanization. The bigger the area you spread the cost of owning equipment over the lower your cost per unit of food produced. Very simple math. The human cost of this consolidation is hard to fathom. I know too many former farmers who went through hell trying to survive and in the end shut down before they lost everything or just lost it all. The same economic forces have no concern for nutrient value and environmental footprint of food either.
The critical mass of agriculture in our area just isn’t big enough to compete in the race to the lowest price with most food producing areas of the world. In Nova Scotia there has also been a lot of consolidation but in Nova Scotia the game of getting ever bigger to offer the lowest price is mostly a fools game we just aren’t big enough to compete on those terms. Elmridge Farm is no exception to the consolidation game. My grandfather farmed maybe 80 acres of land to make a living for a family of 12. My parents started out very poor, worked very hard to build the farm to more than double that and saw their standard of living for a family of seven improve drastically during the 80’s. In the early 90’s my parents were able to sell their milk quota and put enough aside that, along with the sale of the farm to Suzanne and I in 2003 allowed them to retire (although, to this day, my father’s interpretation of retirement is just working 10-12 hours a day on what he wants to instead of what he has to….not a bad interpretation actually). Already in the early 90’s the economics of dairy farming were such that one could not buy both the farm and the quota and make the cashflow work. You had to have enough money for one or the other already in your pocket to be" viable”; that’s not really viable. I never really loved cows so I opted out with the resulting loss of some sense of financial security and the start of anxious dreams that continue to this day. Suzanne and I have built the farm to a cash flow of 10 times what my parents best year was. With inflation taken into account that makes our operation six times what theirs was; and it’s still growing in the name of staying in business. In 2018 we did double the cash flow for the same net profit as 2009. The last three years have been break even depending on how you calculate it. That makes me very nervous.
As I have mentioned before, Nova Scotia has lost the vast majority of its processing ability (mostly in the 90’s and 00’s). There were significant acreages of peas, beans, pickling cucumbers, beets, tomatoes etc. grown for processing. All of that is gone now; and that’s just vegetable crops. Most dairy processing has left the province, a lot of chicken travels live into New Brunswick and Quebec, there is no longer large scale beef processing, and the pork industry is, at most, just a few percent of what it was less than 20 years ago. In the 90’s we grew up to 10 acres of green tomatoes for green tomato chow that was made at a processing plant in Berwick. We modified an old plum tomato harvester to harvest the green tomatoes. It worked so well that we could harvest enough tomatoes in about four hours (30,000 pounds),with a crew of six , to keep the processing plant running for a full 24 hours. The plant management was quite taken with the ability of the machine and came out to look and take some pictures. The next year they gave our contract as well as pictures of our modifications to a grower in Quebec near the parent company and then shut down the local plant. It’s a dirty business.
The loss of local processing ability is one of the major factors that has continued to put local agriculture at a disadvantage on the world market. The bright spot, however, is that there are many small processors popping up that are not playing the game of lowest price. Instead they rely on higher quality products that deliver value to the customer that goes beyond a low price point. The most obvious examples are the breweries and wineries that have opened for business. It’s interesting to see that there is money to be made on the non essentials but the essentials are still a tough sell. That’s human nature; we want a bargain on the essentials so we can spend on the extras and impress others or make ourselves feel better. There is also some small scale processing of grains, oils etc. popping up.
In order to make a profit we have to take a product and value add (ie. run a second business to pay our bills). To grow only the ingredients for processing is still only marginally profitable. We at Elmridge have been working with a rather notable consultant for the last year and a half to do a whole farm analysis to see where things are going wrong and where things are going right. This analysis along with the existing need for more capacity to produce Suzanne’s dog treats (notice it’s a luxury item of sorts) has led us to look at dehydration of cull products as a new revenue stream. The dog treats are made mostly of sweet potatoes that are cosmetically challenged in some way and do not retail well. With a bit of pruning they can be turned into a profitable product with something that’s magical to a fresh veggie farmer; shelf life! So the thought was “why not see if we can also dehydrate other cull produce into ingredients for both human and pet food?”.
As I have mentioned before; with only a fresh market available to us it is very hard to grow just the right amount of vegetables to fill demand without overproducing or running short and sending customers home empty handed. In fact it’s impossible. Even with the tightest of management practices and reasonable weather the yield will swing by 20% either way every year. When we get weather anomalies that swing is easily 50% or more. Running short of product hurts our dependability and requires our customers to look elsewhere for vegetables. That’s frustrating for consumers and causes us an inevitable loss of customers. To have too much product is not the blessing one would think either. To leave unharvested product in the field for lack of market is a soul crushing experience that we deal with far too often. Instead, because we firmly believe that avoidable waste is wrong we end up donating $50-100,000 worth of product to Feed NS every year. We get a 25% tax credit which is better than nothing but we are still at a net loss on that product. To benefit from the tax break also requires us to be profitable and hence taxable to gain any advantage. So the last three years have seen surplus product become almost a 100% loss to us. Ironically, because we grow our food differently from conventional it very often doesn’t meet size, shape or colour specs for the big grocery stores. It is better quality from the standpoint of flavour, nutrient value and freshness and has a smaller environmental footprint but it doesn’t meet their “quality” requirements; mostly size, appearance and paper trail. We cynically joke that their primary quality standard is a new box with pretty colours….unfortunately there is a lot of truth in that. A hard nosed business mentality would have us leave it in the field and cut our losses but a hard nose business mentality would also have us working in a completely different industry. Let’s face it; if money is your sole objective then you most likely won’t be happy growing food.
In November 2019 we started to look into what might be involved in scaling up the dog treat business and using the equipment to add to our product line. We weren’t long figuring out that there is plenty of business to be had in the pet food and pet treat market; and it’s a growing market. Then we widened our focus to which products we could dehydrate for human consumption and, "how does that look financially?”. Our conclusion; it’s not going to be simple or easy (nothing worth doing is ever simple or easy), but there is a profitable opportunity in dehydrated products.
Best of all; we can use the vast majority of cosmetically challenged cull product to make various powders, soup mixes and food ingredients. It also helps us manage supply. We can consistently grow more than we think we need for the fresh market and dehydrate the surplus. The storability of dehydrated products is the secret tom managing supply. Assuming that the demand for dehydrated product is enough that we use up all culls and surplus product plus have to grow at least some extra acreage of each crop solely for dehydration, we can adjust that extra acreage each year depending on how much dehydrated product we have in stock. We are also hoping to help use up some of the surpluses from neighbouring small farms. It’s a small step in the big picture but it’s a step in the right direction to rebuilding our local food security and, maybe someday, food sovereignty.
Here comes spring….oh! Wait…maybe not…..well….maybe….
Keep eating your veggies.
Greg
