Tag: Creative Destruction

Farm Store Closing

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We are making some major changes in our farm to keep the farm profitable and sustainable, and to reduce our work load. We are closing our farm store and self-service egg refrigerator at the end of the year. We have frozen chickens, convenience packs, honey, Everyday Miracles Salve and lamb available as long as supplies last. Next year we will be selling strictly wholesale to stores. We will continue to produce our pasture raised eggs and sell them in the stores that are currently carrying them and will likely add a few new stores.

Next year we will not be raising broiler chickens or turkeys, and we will not have eggs or other products for sale here at the farm.

Earlier this summer we felt that God might be directing us to stop raising broilers and turkeys and stop selling retail here on the farm. We decided to wait until Thanksgiving to make the final decision. As time went along we discovered more and more reasons why we should stop raising broilers and turkeys and close the farm store. We will not list them all, but the main reason is to reduce our work load. Farming is hard work and requires long hours. It is time to make some changes. We do not want our children to get discouraged and feel like a sign I saw recently which said: “Because of the heavy work load, the light at the end of the tunnel has been turned off!”

Luke asleep instead of playing mandolin
We have felt exhausted like this more than once this year!

Much of “Sustainable Agriculture” is not Profitable Or Sustainable
In explaining why we are closing our on-farm store, I think it is important to explain where agriculture is financially here in America – how we got where we are, and how we as sustainable farmers have been trying to make things work financially.

In a speech given on Oct. 21, 2007, former Federal Reserve chairman Alan Greenspan explained that the Federal Reserve has been involved in financial engineering in the U.S. using a technique called “Creative Destruction” to move people out of lower paying jobs such as farming, manufacturing, and the textile industry into higher paying jobs such as health care and education. The result has been that farming, which years ago was a profitable business enterprise, has become unprofitable for most farms. (See my article on Creative Destruction in the May 2008 newsletter at: http://www.jehovahjirehfarm.com/articles/2008/05/12/creative-destruction-related-to-farms/)

According to the USDA, most farms in the United States earn ALL THEIR HOUSEHOLD INCOME FROM OFF-FARM SOURCES! The USDA’s projection is that the median farm income for 2015 will be -$1,504! In other words, most farms are losing money, not making money. (http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-2015-farm-income-forecast.aspx)

Let that sink in. Do you know of any other profession where most of the businesses are not making any money for labor even in the good years? Most of the farmers in America are working for free. Actually, with a farm loss, many are paying to work for “free”. This is ridiculous and is not sustainable. Anything that is not sustainable will sooner or later come to an end. And then where will the food come from? Think of that the next time you see the bumper sticker – “No Farms, No Food”. The thing that so far has kept farmers going is their passion for farming. They love to farm and will do whatever is possible to keep on farming, even if it means farming for free. But sooner or later, the reality of what they are doing will dawn on them, or some event will happen that will force them to stop farming.

As our family evaluated whether we should continue to raise broilers and turkeys and operate our farm store, we realized that something had taken place in the sustainable agriculture movement that we did not see before. Since most farms were not really making money from farming, we were encouraged by people like Joel Salatin, sustainable agriculture seminar speakers, and county extension agents to sell our products directly to the public through farmers markets, CSA’s, and on-farm stores so that we could get the retail dollar for our products. That worked. It enabled farmers to get some money to put toward their living expenses. Other farms have added agritourism to keep their farm going.

What we as farmers did not fully realize is that by selling retail, we were actually adding a new business enterprise to our farm. When a store sells a product at retail price, they have a lot of labor, overhead, and other costs that go along with selling the product. The difference between the wholesale price and the retail price is not free money as many farmers tend to look at it. It takes a lot of time, planning, marketing, and preparation behind the scenes to sell directly to the consumer. What is happening is that the farmer is working for free on the farm to produce food for others, and then working a second job in retail (selling at farmer’s markets, a CSA, or on-farm store) which is actually providing their income.

Selling retail makes the farmer’s work load greater for another reason. The farmer has to have a variety of products to sell if he/she is going to attract customers to their farm market stand, CSA, or farm store. If a farmer had only one product, such as eggs or one kind of tomatoes, they would not sell very much. Each product or vegetable takes time to produce. Because of the limited retail market at each location, the farmer can’t take advantage of the economy of scale like large farms do in reducing the production cost per item. In a Weston A Price, Wise Traditions Magazine article titled “The Real Cost of Real Food”, one man shared how that with his 100 hens he would have to get $11.52 a dozen for his eggs in order to get paid $10 an hour to produce them. (http://www.westonaprice.org/health-topics/the-real-cost-of-real-food/) Because of the need for a variety of products, some sustainable farmers are producing products at a loss in order to have products to draw customers to their farm or farmer’s market stand. Those loss-leader products represent a lot of labor over the course of a year that never gets paid for, and means that the farmer has to work more even more hours at something that does make money.

Selling retail works, but we have been hearing from many sustainable farmers in the last several months how exhausted they are. They feel like they can never get everything done that needs to be done. Sheri Salatin, who with her husband Daniel (Joel Salatin’s son) manages Polyface Farm in Virginia, stated several weeks ago in a blog post: “I’ve been way too busy this year and to be brutally honest, if every year is going to be this hard, I’m ready to quit. No it’s not been a bad year. No, there was nothing tragic. I’m almost embarrassed to admit, because I know many out there who have had some major health concerns or lost loved ones this year. It has just been one of those years where… Let’s see, how can I explain it? Well, I have a list of things to get done every day and if I don’t plan my day and run it ‘just so’ not everything that I needed to get done that day will get done. And nothing on the list is optional for another day.” (http://polyfacehenhouse.com/2015/11/farm-wife-friday-a-farm-table-discussion/)

In the comments section, almost every response is from a farm woman who is feeling much the same way as Sheri.

What I have shared with you about what is happening in sustainable agriculture is negative and discouraging. I share it to help you understand why we feel it is important to close our retail sales and the extra work load that it creates. But we are not feeling negative or discouraged about our farm. Instead, we are looking forward to the future and staying sustainable. Selling eggs wholesale to stores is a profitable enterprise for us. We are getting paid for our farm labor. The name Jehovah-Jireh means “the Lord will provide”. We feel that one of the ways God has provided for us is by showing us how to make a living from our farm.

We are moving forward. We recently converted our pullet raising shelter into another hen shelter and bought some more organic hens. We are still caring for the same number of birds, and the labor is much the same, but the hens are producing an income whereas raising baby egg layers did not produce an income. The increase in egg income should more than offset the loss of on-farm sales. Our family feels like the light at the end of the tunnel has suddenly gotten brighter. We are looking forward to a break from a very, very busy summer and fall. Closing the farm store and some of our other farm enterprises will enable us to give more attention to the hens so that we can hopefully provide even better eggs for you. We will miss seeing those of you that come to the farm, but you will still be able to buy our eggs and BARC pet food in the stores. We plan to continue to keep in touch with the farm newsletter, and will probably send it out about three or four times a year.

You may also like to read:
The End of Organic Farming Might be Sooner Than We Thought by Cara Parks, Oct. 12, 2015 http://www.refinery29.com/2015/10/94908/small-organic-farm-businesses-unsustainable-agriculture

I’m Not Sorry — A November 2015 blog post by Shannon Hayes, pasture based farmer and author of The Grassfed Gourmet Cookbook: Healthy Eating and Good Living with Pasture-raised Foods http://theradicalhomemaker.net/tuesday-post/i-am-not-sorry/

Some local farms that use organic feed and raise broilers on pasture:
Rights of Man Farm, Ijamsville, Md. http://www.rightsofmanfarm.com/index.html
Nick’s Organic Farm, Buckeystown, Md. and Potomac, Md http://nicksorganicfarm.com/
Dayspring Farm, Middleburg, Va http://dayspringfarmva.com/

Winter Garden
This fall we are adding a “Winter Garden” to each of our hen shelters. Previous to this, at the south end of the hen shelters there was a fenced area with wood chips on the ground which we called the picnic area. It was a place where we could confine the hens when the pasture was too wet, there was snow on the ground, or the pasture conditions did not permit the hens to be on the pasture that day. It is an important management tool to keep the pastures from being destroyed. By covering the picnic area with a greenhouse, the hens can now enjoy dry bedding and the heat of the greenhouse on those cold winter days in January and February. In the Spring the plastic on the sides will be rolled up and the roof covered with white plastic giving them a large open air pavilion. Hens, like us, do not like the hot sun in the middle of a summer day. It will provide more shade for them to lounge around in while they wait for the cool of evening to come so they can range the pastures before bedtime.

Hens in the winter garden
The hens are already enjoying dust bathing, scratching and just being in the Winter Gardens.

A Sustainable Farm that Isn’t

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The hard, heart breaking reality that sustainable farming is not as sustainable as we once thought it was.

My heart ached as I stood at the edge of a field on another farm and looked at what had once been Salatin style pull pens, used for raising pasture-raised chickens. The pens laid smashed together on a pile in the woods. That style of chicken pen is named after the man who promoted the design and method. The pens at one time had been two feet high and 10 feet wide by 12 feet long. The pens are called pull pens because they are pulled across the pasture by moving them one pen length a day. It is a very labor intensive system. Almost every farm here in America that starts raising chickens on pasture uses this method. The method is romanticized and made appealing to new farmers.

A pile of smashed Salatin style chicken pens
A pile of smashed Salatin style chicken pens that had at one time been used for raising chickens on pasture. It represents the smashed dreams of two sustainable farmers, and the unsustainability of what is supposed to be sustainable agriculture.

The pasture where the pasture-raised chickens had been raised
Turning around from where the above picture was taken, this is the view of what had once been the pasture where the pasture-raised chickens had been raised. The farm was located in Maryland State Park property. After the sustainable farm failed, the land (about 50 acres) has become a wasteland filled with noxious weeds, thorns, and poison ivy. About four years ago the Maryland Forest Service planted it in trees to reforest the land, never to be farmed sustainably again. The last crop that a farm grows is trees. (We have not yet been able to prove to the world that sustainable farming is the answer to feeding the world and that we are more sustainable than big corporate agriculture. We have more work to do.)

The farm, Full Circle Farm here in Maryland, went out of business over 10 years ago. The pile of chicken pens represents not only the labor of the farmers and their wasted funds, but it also represents the smashed dreams and hopes of a man and a woman who had been told that the system that they were using was the answer to conventional confinement agriculture. They thought they were practicing sustainable agriculture that would last and endure long after the conventional, confinement, big corporation chicken houses had gone out of business for being unsustainable.

Little did they know, as beginning farmers, that the method that they were using was not sustainable and that few people who would try it would be able to make a living wage with it. Most of them would quit after a few years.

I am writing this in hope that the many farmers and want to be farmers who subscribe to this newsletter do not make the same mistakes that I made and that Full Circle Farm made. I used to think that it was me that was having the problems and that others were being successful. I kept hearing glowing reports about how great everything was on other farms. But as I have observed things over the years, and from reading articles in Stockman Grass Farmer Magazine, I have pieced together that the profits were not there that those giving the glowing reports made it sound like it was. From my perspective, the reason that many sustainable pasture based chicken farms are no longer in business is not the farmer’s fault, but the fault of the system that they used. If you are experiencing some of these failures, it is not you, it is the system you are using. Chickens will not be super healthy just because they stand, sit, and sleep on the cold wet ground with grass on it 24/7. If we are going to have sustainable pasture based farms and last long after the conventional, confinement chicken houses have gone out of business, we need follow a different method.

There are a number of reasons why pull pens are not a sustainable method of raising chickens on pasture.

  • It requires too much labor for the few number of chickens that the farmer is raising to make a living wage. The pens have to be moved once or twice a day or the chickens will sit in their own filth. If you have 20 inexperienced apprentices running around your farm working basically for free, building and pulling pens is good grunt work to keep them busy.
  • The chickens are not protected enough from the heat, the cold, the rain and wet ground, and from predators. I will not go into details, but it is not a humane method. The death loss is too high. Every chicken that dies represents a loss of profit. The overhead costs and feed invested in the dead chickens are still there.
  • Because of the high labor input, it is difficult to have enough time in a week to raise, process, and market enough birds to be able to make a full time income. In other words, the hourly wage is below minimum wage. That is why most farms using the pull pen method stay part time or shut down. It is not profitable. They have to have off farm income to live on. For a sustainable farm to be sustainable, the labor input has to be low enough for the number of birds raised, to be able to raise enough chickens with a normal day’s work to make a living. Those that have promoted this method of pasture based farming have made it sound like the animals do most of the work. That is not true.
  • Pull pens are a micro version of confinement chicken rearing, only it’s on pasture. The chickens have very little space to move in their small pen.

Likely, unbeknown to the farmers at Full Circle Farm, there was another significant factor that may have contributed to them not being able to sell enough chickens to make a go of farming and be sustainable. The farmer who had taught them the method of raising chickens on pasture had a big name recognition and was illegally delivering chickens that were not USDA inspected across state lines into Maryland to customers relatively close to Full Circle Farm. At that time period in Maryland, Full Circle Farm could only sell their chickens at their farm because their chickens were processed under Federal exemption and were not USDA inspected. People had to go to their farm; the chickens could not be delivered to drop points like the other farmer was illegally doing. It is one thing for a farm to compete with a legal competitor, but it would have been very difficult for them to compete with a competitor with name recognition that was doing things illegally to provide what the customers wanted and taking business away from them.

The black market of illegal pasture raised chickens coming from Pennsylvania and Virginia into Maryland and Washington DC continues. If you are a farmer that is doing this, please stop. If you are buying this black market chicken, please stop. If the illegal chicken and illegal raw milk does not stop coming across state lines, it will endanger the sustainability of all pasture based farms.

For sustainable agriculture to be sustainable, the farmers have to stay in business. As sustainable farmers, we need to look out for each other and help each other and not take business from other sustainable farms by doing things illegally or misrepresenting our products as something that they are not. If you are a consumer, do not hurt the sustainability of the sustainable farms in your area by supporting the big guys (or the little guys) who are doing things illegally or are misrepresenting their products. One of the most common misrepresentations is a farm giving customers the impression that their chickens and eggs are organic when they are actually not feeding their chickens organically and are feeding non-organic feed. Non-organic feed is much cheaper than organic feed. Contrary to what you might think, a pastured chicken actually eats more feed than a confinement raised bird because they get more exercise and because they need to keep themselves warm during cool weather and on cold nights. It is important that the feed is organic.

Sustainable agriculture is a team effort of farmers and consumers. If we do not make sustainable agriculture sustainable, big business, confinement, “pasture raised” animal operations will be what is sustainable.

Related articles from past newsletters on this subject:
Sustainable Farming – The Farmer Has to Stay in Business
Our Quest for a Better and More Humane Way to Raise Chickens on Pasture
Our Quest for a Better and More Humane Way to Produce Eggs on Pasture

For those who are farmers
Here in the United States, much of the information that we have been given about raising chickens on pasture is outdated by 20 years or more. There have been a lot of advancements in the last 20 years that we as small growers have not kept up with. Europe with their free-range chickens, and the larger poultry breeders have a lot of beneficial information for us to learn from. Raising chickens on pasture is a lot more high tech in meeting their nutritional and other needs than we have been led to believe. Small mistakes in nutrition and management can end up costing a farmer a lot of money and may mean the difference between making a living and going broke. Here are some valuable resources that have been beneficial to us:
The following three books available from 5M Books – http://www.5mbooks.com/agricultural-books/poultry-books/poultry-signals-training.html
Poultry Signals
Broiler Signals
Laying Hens

Online Resources:
Ross 308 Broiler Handbook
ISA Brown Egg Layer Alternative Management Guide
ISA Brown Nutrition Management Guide
Hy-Line Brown Egg Layer Red Book – A Management Guide

Creative Destruction Related to Farms

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When I (Myron) was young, the United States produced a lot of extra food that was exported to many countries. The U.S. was called the breadbasket of the world. But times have changed. The number of farms have decreased, population has increased and we now import almost 50% of our food. What has perplexed me is that the government doesn’t seem to care that each year we have to import a greater portion of our food. Part of our national security is our ability to produce our own food and not have to rely on other countries for our food. There are many things we can live without, but we can’t live without food.

Recently, I found out the reason why farms have been declining in America. It is part of financial engineering by the Federal Reserve in an attempt to create a higher standard of living for Americans. The economic theory is called "Creative Destruction". The philosophy of creative destruction also explains why the U.S. government changed regulations for domestic manufacturing and clothing factories so that it became too costly to produce their products in the U.S. The result has been that most of our manufacturing segment has moved oversees. Before we go any further, I want to make it clear that the concept of creative destruction is not a conspiracy theory of someone speculating on the motives of the Federal Reserve. It is a philosophy that the Fed has clearly stated it is using. The following are former Federal Reserve chairman Alan Greenspan’s own words from a speech given on Oct. 21, 2007:

"We have been doing things different for quite a long period of years. And many of them turned out to be awful. So I think that the issue always rests in capitalist market economy which as you point out has its roots and its necessities in creative destruction because remember it is only creative destruction that creates higher standards of living.

"Because by definition creative destruction is essentially moving the capital from less productive obsolescent industries to cutting edge technology related industries and by definition the moving a body of capital from the low output per man hour type industries to higher man hour output industries and that obviously raises the average and its only the average increase in productivity which generates higher standards of living. There is no other way that we have found and that includes having oil in the ground or gold somewhere. Adam Smith is right it is essentially the wealth of nations is determined by productivity and productivity can be advanced only in broad economies such as those which we deal with by a form of competitiveness and that generates creative destruction.

"As I say in the book I’ve just written there is a very significant problem here of the destruction part. Because remember when you move the capital from the lesser productive industries to the more, you also have to move people. And its always been a major problem in the fact that there are losers as well as winners and how to handle that problem is always been critical and necessary in order to maintain a viable market system. But the truth of the matter is there is no other system which has worked as well." (From the website: http://www.womensgroup.org/Per-Jacobsson-Foundation-Lecture.htm?eventID=941)

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, in a speech to the governors of the southern states, said the following:

"The destructive side of capitalism’s creative destruction is evident in lost jobs. Let me share a few numbers for the states you govern. The number of workers in apparel manufacturing in your states decreased 80 percent between 1990 and 2005. In the same 15-year period, payrolls fell 18 percent at paper manufacturers and 15 percent for furniture makers. The number of farm workers decreased 6 percent, and the number of mine workers declined 5 percent. That is pretty painful stuff. And it is not ancient history. It all occurred within a time frame that is fresh in the memory of everyone in this room—between 1990 and 2005.

"And yet, despite these employment losses, each state in the Southern region now has a larger job base than it did in 1990. North Carolina, for example, has created 1 million net new jobs since 1990. Texas’ employment has risen by more than 3 million since 1990.

"Why? Because the creative side of creative destruction outpaced the destructive side. Your economies replaced lost jobs in declining sectors with new ones in emerging, higher-value-added sectors. Between 1990 and 2005, the number of data processing and Internet service provider workers in Southern states increased 65 percent. Professional services workers grew 63 percent. Financial services employees increased 31 percent. Retail employment grew 23 percent. By 2005, the financial and real estate services sectors employed as many Southern workers as the manufacturing sector. Lodging and food services accounted for the same share of the Southern workforce as construction.

"Health care sector employment in the South alone grew by 2.3 million from 1990 to 2005. Let me put that in perspective: For every manufacturing job lost in the Southern states between 1990 and 2005, the health care sector created 2.4 new jobs."  (from the website http://www.dallasfed.org/news/speeches/fisher/2007/fs070825.cfm)

Time will tell if creative destruction is the greatest thing the Federal Reserve ever did, or if it will turn out, to use Alan Greenspan’s words, "to be awful". There are a number of questions that comes to my mind.  Is creative destruction sustainable in the long run when we give up industries, food and clothing, that are basic necessities of life? If creative destruction is sustainable, why do we need 2.4 new health care workers for every manufacturing job that was lost? Is our health decreasing so fast from eating cheap food that we need that many more health care workers? Do politicians really believe that increasing the health care industry is more sustainable for the US economy in the long run than producing food?

Cathy and I are of the opinion that the intentional creative destruction of local farms and the government’s encouragement of eating cheap food has been a mistake. However, rather than focus on the negative, on our farm we are rowing against the flow of creative destruction to provide you with nutritious, nutrient dense, healthy, local food that is difficult to find, but which is important for your health. This year we encourage you to eat local for your health and the financial health of the local farms who are rowing against the flow of creative destruction.

World Food Crisis

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An indicator that the intentional creative destruction of local farms was a bad idea is that there is a growing shortage of food worldwide. The food shortage is only partially caused by biofuel production. The total world production of food is not enough. The poorest countries are being hit the hardest because they can’t afford the higher cost of food. The price of rice has increased from $460 a ton to over $1000 in just a few month’s time. That also means that humanitarian relief can now feed less than half as many people as before with the same amount of money. Twelve countries have had food riots, and the prime minister of Haiti was run out of office because of their food shortage.

Our dependence on other countries for food is greater than most people realize. Most people have no idea the total volume of food that they consume each year. Nor do they realize how difficult it would be for each family to produce all the food that their family needs for the entire year if they had to. I know we didn’t realize how difficult it was until we started farming. We raise almost all the meat we eat. We produce all the eggs we want. Our two cows provide most of the milk, butter, ice cream, and yogurt we eat. We have a large garden, and Cathy freezes and cans lots of vegetables. You would think that we were almost self sufficient, but we are not! We still spend around $6,000 at the grocery store or for other off farm food purchases for our family of eight. That amount includes total grocery store purchases which includes toilet paper, detergents, etc. Producing everything  you eat for an entire year is difficult.

There is a slogan that applies to the present food crisis: "Think globally, act locally". The more food we produce and consume locally, the less food that has to be imported and taken from poorer countries who can’t compete with us price wise for the food. If we eat more potatoes and less rice, it means more rice will be available for others. We encourage you to consider doing some gardening this year. If you have not yet started a garden or even just a few tomato plants, it is not too late to do it.