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. Our Massena place is rented to an experienced beef cow-calf family. I am still in the process of converting our Bennington ground from small grains to permanent pasture.

I want to lease these farms with purchase options to young farm families that stay in the beef 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.

ERS and USDA research shows that small farms make up over 90 percent of all U.S. farms. However, as a group, they earn only 35 percent of the gross income from farming while larger farms earn the rest.

We know of no business model that has been shown to increase landownership rates among smaller crop and livestock commodity producers. As it is now, smaller farmers most often sell to larger farmers to settle debts, estates, and fund retirement.

Farmland Succession

To measurably increase farmland succession among small farmers, we need far more farm-level income. The first step toward sustainable farm profits is to increase farm sizes – without selling land or taking on more debt.

Toward this end, 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.”

Close cooperation among landowners is the first step toward essential investor participation. Although cooperatives have a long history in agriculture, usually in food processing and sometimes in distribution and marketing of farmer-owned brands, we cannot find research that shows how farmer and investor-financed cooperatives have increased land ownership rates among the above-mentioned 90 percent.

Local Farmer-Owned Retail Food Brands

As a first step toward new income, my company is developing a three-level business model controlled by farmland owners and managed by younger farmers.

Our goal is to build local and regional farmer-owned food brands with the capacity to compete with imported (non-local) brands.

Since our own farm income depends 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, producers will be invited to consider incorporating “regenerative production units” that will supply grain, hay, alfalfa, and cattle to conventional and specialty commodity buyers, and in time, to farmer-owned beef brands. Production units are small farm management and marketing companies that contract with Massena Farms to provide a range of information and organizational services.

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 and farmers will lead these meetings.

The meeting objective is 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.