And yet, Featherstone Farm is as healthy and strong as ever, thanks to the efforts and contributions from community members and customers near and far. This brief report is part of our effort to be accountable to this community; to explain how we’ve used the “second and third chances” that you’ve given us, to shore up all aspects of Featherstone Farm’s foundations for long term stability and sustainability.
Since last winter we have been referring to the 2017 season as “Featherstone Farm 3.0”… a new (hopefully final!) paradigm for a business that has grown and changed so much over the years. As part of last year’s campaign we outlined (5) areas of focus and change in the “3.0 era”. This report will summarize steps we’ve taken in each of these areas.
This area is all about how we think of ourselves and our overall purpose at Featherstone Farm. After 2 decades of “startup atmosphere” (read: chaos!) and high minded idealism (read: distraction, albeit very well intentioned!), the Featherstone Farm 3.0 paradigm is all about focus on productive, profitable vegetable farming in a professional atmosphere.
I’m very pleased to say that the 3.0 paradigm shift has been very successful in this area so far. We have all managed to keep our “eyes on the prize” of normalizing operations and sticking to plan. The mantra “right thing, right time” has been the guide for all of our decision making; we have turned down or delayed opportunities and “distractions” of all kinds- even when we felt they were valuable and even important- rather than let them get us off track in any way.
I’ll be honest and say that this has been among the greatest challenges of the 3.0 paradigm for me, personally. In the current atmosphere of national (even state and regional) politics, it has been very tempting for me to get involved in advocating for immigrants, for the environment, for any number of other important causes. But avoiding “distractions” like this is commitment #1 at the top level of the 3.0 paradigm; I believe we are upholding this commitment well in 2017.
Here we have seen the strongest advances of all in the 3.0 paradigm.
The lack of sufficiently resourced, focused crop management was among the greatest shortcomings of the 2016 season (after the spring departures of 2 key Hort Team members). Rebuilding and resourcing this team was therefor among the most pressing imperatives of 2017, and here I believe we succeeded beyond expectations (and boy, did the health of the crops this season reflect this!!). Crop management- identifying, prioritizing and implementing the dozens of decisions about each succession planting of every crop on the farm- is now among the great strengths of Feathersone Farm.
But it is not just this the Hort Team that is to thank for all of the progress we made “in the field” this year; we have continued to build a great team of equipment operators, warehouse workers, repair shop techs and fieldworkers of all kinds, to get the results that we are now getting. All of these folks are working at a higher level than ever before, thanks to the accumulated knowledge and experience they have acquired in 3-4-5+ years of work here. We have continued to build and emphasize diverse leadership within the Spanish speaking parts of our crews, and this has yielded great results.
One part of the farm team that has taken a step backward in 2017, however, has been the business’s front office administration. Featherstone Farm lost long term financial co-ordinator Emily Babbit in the spring (wanted to be home full time with her young sons), and then 2 other PT staff in the early summer. The result was a months’ long pressure cooker for the 2 remaining FT front office people… but also an opportunity to re-make this part of the farm team into a more manageable, sustainable unit. This re-build will begin in earnest at the start of November, when the front office welcomes a new FT administrator to the team. We hope to see much more progress in this area of the business in the 3.1 era (2018 and beyond).
The start of the 3.0 era (spring of 2017) saw the single greatest drop in the number of acres managed by Featherstone Farm- and number of separate farms on which these fields are located- in the history of the business. Becoming leaner, more focused and more productive was and is a key part of the new paradigm. This season the farm managed approximately 15% fewer acres of vegetables and, in particular, of “non veg” crops like grains and hay.
Even more important, the farm entered a new era of investment in soil health. Featherstone Farm’s gradual move away from “best best” soil management practice over the years- for a variety of practical and even philosophical reasons- is one of the unfortunate legacies of the “2.0 era” here. In the fall of 2016 we made a complete break with this history and began once again to invest substantial time, energy and money in mineralizing soils with micro amendments (balanced microchemistry is the foundation for healthy microbiology, which in turn is the foundation for healthy, disease resistant crops). I am very pleased to say that this focus on soil health and soil building is proceeding nicely (I have never seen better fall cover cropping at FF, than we have established this year…). There is real risk in investing hundreds and hundreds of dollars per acre in micro amendments- many of which take 6-8+ years to have full effect in soil- when we have only year-to-year leases on many of these fields (see below). But we will continue to make these investments this fall and beyond; soil mineralization is one of the real commitments we have made to stability and sustainability in the 3.0 era.
The wide diversity crops of crops we raise at Featherstone Farm- warm season and cool season, vegetative and fruiting, quick maturing/volatile and slow growing/stable- is both a strength and weakness of our business model. Yes, it provides a certain level of risk management, when crop insurance is not available or relevant (see below). But the sheer complexity of all of these crops- and the mind boggling range of different needs and management considerations for each- also presents a huge challenge at all levels of a farm like Featherstone.
In the 3.0 era we have limited and/or eliminated certain crops- onions and potatoes, parsnips and rutabagas, among them- in an effort to become “leaner and more focused” at the Hort Team level… to give more attention to getting good at disease management in cabbage, for example, or pest prevention in peppers. And we have emphasized different practices in the field (isolating cauliflower, for example, or growing cabbage in “8 blocks”) that will help us prevent and manage many of the “issues” that plagued us in the 2.0 era (foliar diseases, insects etc etc).
I am very pleased to report that these investments are paying off handsomely in the first year of the 3.0 era. Not only do fields look and feel better managed than ever, the objective data we are collecting on productivity and crop health are quantifying the gains nicely. We are doing much better in the first year of the 3.0 paradigm, in large part because we have reduced the ambition of what we are undertaking (scale and diversity, both).
This last area of the “3.0 Stages and Plan” outline is where we have seen the least progress in 2017, but where significant opportunity remains in 3.1 and beyond (starting with this winter planning…). In particular, I am sorry to report that two very significant efforts of last winter (November 2016-March 2017) came to naught.
First, my research into Whole Farm Revenue Insurance (what we thought to be a reasonable alternative to crop insurance) determined that it is not useful for the FF model of diverse vegetables, for a variety of complex reasons. Had we had this insurance in 2016, the premium would have been over $70k, but our “payout” less than $15k, despite the losses. WFR is truly a catastrophic loss type policy, and would not have helped in a “near catastrophe” like 2016 (many analogies here to the current health insurance debate, I think: simply having a high deductible healthcare policy does not necessarily prevent a family from going bankrupt, as the deductibles, co-pays and non-covered expenses pile up…).
Second, months and months of work this winter to secure purchase agreements for two separate pieces of farmland were scuttled when the USDA’s Farm Service Agency (the public “lender of last resort”) did not approve Featherstone Farm’s loan application. I am convinced that we could have had this denial overturned on appeal, had we had the time and people to do a “deep dive” into the inscrutable formulas by which the FSA shoe horned FF’s complex financials into the simple two page document that the office uses to assess farm business plans (80-90% of which are row crop or dairy focused). But maddeningly, this loan denial came in April, when all of us were simply too busy (especially with Emily’s departure imminent) to appeal. I will be initiating a new loan application effort in November (2018), and will be much more attentive to the FSA formula issue this time around.
The “holy grail” of a comprehensive, all encompassing farm IT operating system remains a goal at Featherstone Farm… perhaps for 3.1 or 3.2 (next 2-3 years?). In 2017, the loss of key office staff made it simply impossible to make any progress toward researching such a system, much less implementing one.
Finally, the farm’s efforts to stabilize and rebuild its CSA membership- particularly its winter program- met with mixed success. Summer membership numbers were again down substantially, perhaps reflecting the relative poor showing of crops in the wet summer of 2016 (if so, we would hope for a rebound effect in 2018, coming off such a strong box program this season). Winter numbers are stable (not contracting), and could well return to growth in the future, if/when we are able to introduce new crops and choices into the program (local apples and eggs, and/or walnuts and citrus from family farmers we know in CA). We will be working this winter to lay the foundations for these new crops for the 2018-19 winter (FF 3.1 and beyond…). And we will be working on developing a “CSA core group” or similar farm business advisory group, to assist with strategic decision making long term.
On the whole the Featherstone Farm 3.0 plan is well on its way to success. The pace of implementation may be lagging behind expectations in places (office / admin). But the main thrust of the plan- better crop outcomes driven by better planning, resourcing and management, and by downsizing / better focus- is right on track. Prospects for 2018 and beyond are bright.
There remains the critical question of how these changes are translating into better profitability and financial stability, as they were all designed to do. I can give short, medium and long term responses on this.
Short term- this month, and looking back a bit over the season- I can say for sure that the farm has been working remarkably close to projections, from labor by payday to wholesale sales per crop per week. In some cases the predictions have been uncannily accurate; I can say for sure that all of us are getting very good at projecting and implementing cashflow, in particular payroll in operations (and controlling OT costs). Finally, we will end the fieldwork season in early November with the most valuable vegetable inventory in storage- root crops, cabbage and winter squash- in the history of the farm business.
Mid term (this winter closing out 2017 financials, and preparing for the 2018budget / crop year), I will be working with the farm’s CPA beginning late October, to analyze the 2017 crop year performance financially. I am optimistic that we will see both profitability and working capital return to near 2015 levels. This would be a remarkable achievement if we can accomplish it; a turnaround this quick would have been very difficult to imagine a year ago. But of course the actual numbers and analysis remains to be done.
The long term reality is that Featherstone Farm still faces a number of very significant financial challenges, from 7 figure debt to lack of land ownership. Addressing these challenges will require many years- and several 2017 type successful seasons in the field, with no 2016 type back stepping. As the 3.0 plan notes, taking on diverse ownership equity will very likely be a big part of the solution… once we have our front office staff / operating system / balance sheet “issues” resolved to some degree (see above). Full recovery from the farm’s (2) “natural disasters” –and the “man made” crisis of over reach and self inflicted growing pains- will take many years. But I am more optimistic than ever about the prospects for success, given the enjoys from customers, CSA shareholders, and community members near and far.