Farmer-Owned Retail Food Brands

My children and I own two small farms in the Omaha area that we inherited from my parents, 60 farmable acres near Bennington, NE and 270 south of Massena, Iowa. Both farms are in permanent pasture.

I want to lease these farms with purchase options to young beef cow-calf producers who have the potential to stay in business. However high interest rates and uncertain cattle markets work against young producers who need long-term loans. Further, these farms are too small to make money as free-standing operations in today’s markets. We are not alone.

According to the USDA together over 90 percent of all U.S. farms earn only 35 percent of their gross income from farming while much larger farms earn the rest. Given these realities, we know of no business model that can increase landownership rates among smaller commodity producers. As it is now, smaller farmers most often sell to larger farmers to settle debts, estates, and fund retirement.

Larger Local Farms and Farmer-Controlled Marketing

We need more farm-level income from farming and from farmer-controlled marketing, to support farmland succession within experienced farm families.

To achieve new economies-of-scale marketing, farming, and food processing we are inviting Omaha area landowners and farmers to pool contiguous and nearby farms to form larger operating units that can be leased to younger farmers – with purchase options. We call these “production units.”

As explained on this webpage, participating farmland owners must have the financial capacity to retain ownership for five years or longer while production unit and marketing plans are developed and implemented. In addition to retaining ownership, most smaller landowners will also take on trusted local investors as minority partners in production unit and marketing operations.

Local Investors

We need trusted local investors at the table to build out production units, finance the young farmers who will operate these units, and develop and implement marketing plans. Close cooperation among landowners is the first step toward essential investor participation.

Local Farmer-Owned Retail Food Brands

To generate consistent cash flows, local growers must reach local consumers in large numbers. To reach Omaha area consumers, my company is developing a three-level business model controlled by farmland owners and managed by younger farmers. The goal is to build local and regional farmer-owned retail food brands with the capacity to compete with imported (non-local) brands.

Since our small farms depend on beef markets, our Level One program starts with local grazing loops organized by row crop and beef producers. My business partners and I will work with the owners of contiguous and nearby farms to write preliminary business plans for each farm, and separate operating plans for the proposed grazing loop. In other words, four farm plans, one loop plan. A one-page planning summary is available.

For Level Two, grazing loop producers will be asked to incorporate their informal grazing operations to form “regenerative production units.” The unit landowners (the board members) will approve all farm management plans and marketing plans for commodities and farmer-owned retail brands. My company and its contractors will provide a full range of farm management and marketing services to each production unit landowner, the production unit, and to the unit farm manager.

On the production side, our goal is to use regenerative farming methods to reduce input costs and rebuild soil, water, and wildlife resources. These units will supply grain, hay, alfalfa, and cattle to conventional and specialty commodity buyers, and in time, to farmer-owned beef brands. On the marketing side, our goals are to attract local investors to production unit and marketing operations.

Level Three starts with private meetings to discuss production unit business plans with the leaders of area institutions (universities, hospitals, etc.), local elected officials, and the owners of restaurants and grocery stores. With support from my business partners, production unit landowners will lead these meetings.

Our objectives are to show how local farmer-owned brands can reduce local food costs while improving the profit outlook for locally owned farms, and for food processing operations that contract with production units.

In closing, successful farmer-owned retail brands supplied by landowner-controlled production units offer a new path to farmland succession within families that own or operate small farms.

Please read on and then call me to arrange an appointment. Thank you.