Portraits of the New Entrepreneurs
Farmers and ranchers share first-hand stories of what it's like to manage a business
Compiled by staff
Published: Oct 5, 2010
By Lynn Marcinkowski Woolf and Mike Wilson
Our October, 2010 cover story (p. 22-26) takes a closer look at how farmers and ranchers are adding new revenue streams to reduce volatility and add income. Here are more first-person accounts from people who are on the front lines of business management. Feel free to contact them for advice.
Filling a Need for Rural Wireless
The federal government announced its "Connecting America" broadband plan earlier this year, to improve access to high speed, "always on" Internet. Pat Harmet, a grain and hog producer in Cropsey, Ill., initiated his own broadband plan back in 2001. He and a partner launched Cropsey Area Wireless internet, or CAWi.
"It started as a service to the community," he says. He was frustrated with the slow speed of dial-up service, and the difficulties in accessing web sites or uploading large files. There were no other options for broadband for residential customers. His first customers were nearby friends. Today, he serves more than 300 customers in seven communities.
Pat Harmet, Cropsey, Ill.
When he started CAWi, Harmet says Internet Service Providers (ISPs) weren't interested in providing residential wireless service to rural communities. The technology was expensive and out of reach of the residential market.
Harmet raises 700 acres of corn and soybeans and has a 4,800 head wean-to-finish hog operation. "For every acre I farm, 16 people want that acre. For every pig I raise, minus 6 people want to raise that pig. And even fewer wanted to get into residential wireless," he says.
Harmet began investigating technologies, drawing upon his engineering degree and experience. His partner has computer expertise.
"It started slowly as we searched the Internet for the equipment and technology to make it work," he says.
His local co-op let him install a radio transmitter for the line-of-sight service on its elevator. He now has six transmitters throughout the communities he serves.
Then and now, Harmet handles all aspects of the business, including installations, monitoring, customer service and billing.
"In a small business, you wear all the hats. Being a farmer, I'm used to that," he says.
The equipment has improved significantly since he first started and is much more reliable, so that helps reduce trouble-shooting time. He wears a headset when driving to and from farm chores, so he can take customer calls. He remotely monitors the service from his home computer and uses QuickBooks for accounting. When farm work needs to take priority, Harmet's partner takes over.
CAWi has provided about $12,000 each for Harmet and his partner over the last few years. But the business is now at a crossroads. If it grows, they may need to hire employees. Some companies have expressed interest in buying them out. "I'm happy to have done it and been part of it," says Harmet. "Personally, I'd rather farm more acres."
Contact Harmet at pat@harmetfarms.com
Ranchers Band Together to Sell Direct
What happens when you produce high quality beef but want to diversify your marketing alternatives? You band together with others and set up a co-op business to sell direct.
That's how Colorado Homestead Ranches came to pass. This co-op of six cow-calf operations - all family ranches – sell about 20% of their cattle through their own processing plant, Homestead Meats, in Delta, Colo. It's a direct marketing operation complete with its own retails store and sales at farmers markets, restaurants, groceries and online (www.homesteadmeats.com).
"We established Homestead Meats in 1995 as a way to capitalize on the quality of the cattle we were growing," says Robbie LeValley, a co-owner and President of the Colorado Cattlemen Association. "We had heard a presentation from the Oregon Country Beef cooperative and wanted to base our business on their model - to sell direct to consumers."
Robbie LeValley, Colorado Homestead Ranches
The ranchers began processing 40 head a year but now sell beef from 400 head annually. There's been increased demand because of the local food movement. "People are certainly more interested in where their food comes from, so our business model fits that interest," she adds.
And because people want to know how their food is produced, the ranchers share their growing guidelines on the website for all to see. They note that the cattle are fed without the use of antibiotics or growth hormones. They stress that animals are grown on family ranches and are 'humanely shipped' to their own processing plant, which is USDA inspected.
"We're much more connected to the consumer," LeValley says. "We were raising quality cattle before and continue to now, but having that direct connection makes us more aware of what the consumer wants."
Her best advice for others? Hire the expertise you need before moving ahead. "The smartest thing we did was to hire someone who knew the meat industry as manager of the packing plant and the business," she says. "We knew we were good at producing quality beef; Dale Dexter, our manager, is good at taking our beef and turning it into a product the customer really appreciates."
Contact LeValley at levalleyranch@aol.com
Profiting From Paranoia
You might say Leonard Mosher profits from paranoia, and it all started with the ultimate doomsday scenario, Y2K.
"For me it's simple: Find out what the customer wants and provide it," says Mosher, who started growing organic wheat and millet 10 years ago when the year 2000 caused consumer panic. "My customers are the ones out there who might be a little paranoid about the economy."
Mosher sells his grain in air-tight gasket-sealed buckets in local markets, and ships railcars of grain to other states and Canada for feeding organic livestock. "I found out there's two markets out there - one for organic, the other for those who do their own home food storage," says Mosher. "A lot of them are you might call doomsday people, but one of my customers was a big time attorney who wanted to know how he could buy it in truckloads."
Both organic and conventional farmers could benefit from filling out the 25-page farm plan required by organic certifiers, says Mosher. The document spells out all inputs, applications and projected yields; organic inspectors use it as a performance benchmark after the growing season.
"It's a wake up call because it really makes it clear what it is you do," says Mosher. "Many farmers don't really sit down and look at the whole picture. This gives you an in-your-face look at your total operation."
Mosher, who lives in Wyoming but farms in Nebraska, markets a lot of his grain on his own by attending trade shows and handling queries from his website, www.wheatandgrain.com. "The website helps communicate what my product is all about and what potential customers need to do to buy from me," he explains. The most popular link? Recipes from customers who grind their own wheat.
Mosher's next goal is to explore the growing market for de-hulled millet. He's discovered that this grain is popular with Muslim and Middle East customers. "It's all about finding out what the customer wants," he concludes.
Contact Mosher at info@wheatandgrain.com
Feed Sales Support Cattle Operation
David Ernst says his feed business and farming operation are at an awkward stage - a good place to be because both are growing.
Ernst, 27, farms 400 acres of corn and soybeans and 150 acres of hay in New Douglas, Ill. He also has a cow-calf and feeder-calf operation. A few years back he was looking for a sideline business to work around his farming operation. "I thought feed sales were up my alley because I have an Ag business minor and an animal science major," Ernst says. He graduated from Western Illinois University in 2005. "Then, the opportunity presented itself."
He met a Kent Feeds district sales manager at the Illinois Beef Expo in early 2007 and became a feed representative later that fall.
"I knew it was good feed. It was a name brand and nobody in my area was selling it. That sold it for me," he says.
A major benefit is buying feed for his operation at wholesale rates. The job wasn't easy at first. He made a lot of cold calls, driving around the countryside. But he traveled with a company sales expert who helped explain the different feed programs and benefits.
Ernst already had the facilities he needed for the venture. He stores bagged feed in a corner of his 40 x 60-foot machine shed. He also uses a former milking barn for pet food storage. Ernst unloads the feed using his tractor loader and a pallet fork and makes deliveries with his pickup. He sometimes combines orders with a college roommate, who is also a Kent representative and lives about 45 miles away. Some customers have bulk deliveries direct to their farms.
One downside to any side business attached to a farm is time conflicts. Ernst has had to get out of the field every now and then to service customers. He says the administrative end is straightforward - calling in the orders and bringing the bill with the deliveries. He did have to establish a pay-on-delivery policy for new customers he doesn't know.
Ernst sees good potential for selling horse feed. He's less than 50 miles from St. Louis, Mo.
"A lot of people are moving into this area and the first thing they do is get a horse or two," he says. He also has customers who own boarding facilities.
Ernst hopes to continue growing his farming operation, too, including his feeder cattle operation.
"Time is a big factor now," he says regarding both businesses.
Contact Ernst at davidernst@frontiernet.net
From Venture Capitalist to Custom Farming
Joel Pribyl is a young farmer who has learned a thing or two about starting new businesses.
He began working construction jobs after graduating from tech school 13 years ago, when his father informed him there wouldn't be enough income from the family's South Dakota farm to support two families.
That business blossomed and continues today, even though Pribyl's father retired from farming a few years ago.
"When we have a week off from farming there's always a construction job where you can earn a dollar," says Pribyl, who grows corn, soybeans, cows and alfalfa. "It lets me stay busy and helps me keep other people busy." The construction work also helps cash flow. "Most of my main customers now are other farmers, neighbors and friends - people I can do work for in the winter to schedule around farming," he says.
Joel Pribyl, South Dakota
Two years ago he and a couple partners started an LLC with a plan to jointly own farm machinery. His partners have kids transitioning to college with hopes of returning to farm later on. The LLC led to the partners adding custom farming as another side business.
Pribyl began to drop construction jobs that took him out of his neighborhood, and instead bought a baler and began custom baling jobs to go with custom planting and harvesting.
What's emerged is a young farmer with a diversified stream of income that suits Pribyl's skills and comfort zone, as well as his desire for off-farm investments. "My biggest challenge now is trying to manage my time," he says. "We would like to grow the custom farming business to provide a place for my partner's son if he wants to return to farming after school."
Pribyl is also a venture capitalist. Two years ago he and six partners ponied up $10,000 for a separate business that returned a tidy profit. Another investment in a local turkey processing plant fared poorly, but now Pribyl and 20 others have put together a $1 million nest egg for a new off-farm business venture.
"I've got several different revenue opportunities besides farming," he says. "To me you have to be diversified - you can't put it all in one place, and that means off-farm ventures."
Contact Pribyl at zeus76@yahoo.com
Top Ranking Launches Hunting Business
Jack Winkleman began his hunting business gradually - as a way to control who hunts on his 2,000-acre farm near Kirksville, Mo. That all changed in 2008 when "Outdoor Life" magazine ranked Kirksville first in its Top 10 Whitetail Town list - the best place to live for whitetail deer hunters.
"You can't book a room in town for years now during hunting season," says Winkleman, 66. He and his two sons, Patrick, 41, and Josh, 26, grow corn, beans, oats, wheat and hay and have a cow-calf operation.
They had occasional hunters over the years, even allowing one hunter to lead guided hunts. The Outdoor Life ranking raised the possibility of building a guided hunting business in their cropland, grass and timber areas.
Pat Winkleman, left, and father, Jack, Kirksville, Mo.
"We found out what people were willing to pay and thought 'We better take a look at this,' "Winkleman says he told his sons.
"Both Patrick and Josh have a passion for deer and turkey hunting and Patrick is a walking encyclopedia when it comes to hunting," he says.
One ad was placed in Outdoor Life after the ranking and their business grew. Patrick now leads guided hunts in fall and spring for deer and turkey during firearms, primitive arms and bow-and-arrow seasons. Josh will join as a guide after he returns in February from his tour in Afghanistan. Josh is serving as part of his Army ROTC tuition scholarship obligation.
The Winklemans include some lodging with their hunts. Several long-time hunters helped build a four-person hunting lodge in 1995 in exchange for hunting rights. They also have access to a 16-person hunting lodge in Kirksville, with another landowner. They hope to soon add meals to the package, with Josh's wife doing the catering.
"We think the business will soon bring a substantial income. It could turn into a six-figure business," he says.
Winkleman says there has been a learning curve. They've had to secure liability insurance and be careful to follow all hunting regulations. They also developed a strict safety policy to which all hunters must agree to and sign.
Winkleman knows his family is fortunate to farm in the middle of a prime hunting area.
"As time goes on, I appreciate more and more what my father did to put this farm together. If I can pass this on as a viable farming and hunting operation to my sons, I don't think it gets any better than that." Contact Winkleman at jdwink@cableone.net
Lynn Marcinkowski Woolf, Milton, KS. is a frequent contributor to Farm Futures.
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