Vermont Farm Viability Program 2011 Annual Report
2011 Vermont Farm Viability Program Advisory Board Chuck Ross (Chair), Secretary, Vermont Agency of Agriculture, Food and Markets Gary Braman, Loan Officer, USDA Farm Service Agency Rusty Forgues, Addison farmer, The Rusty John Farm Alex Ibey, Economic Development Specialist, Vermont Department of Economic Development Sarah Isham, Senior Agricultural Loan Officer, Vermont Economic Development Authority Douglas Lantagne, Dean, UVM Extension Hannah Noel, Highgate farmer, Maplewood Natural Organics Earl Ransom, Strafford farmer, Rock Bottom Farm & Strafford Creamery Bill Suhr, Shoreham apple grower, Champlain Orchards Gus Seelig, Executive Director, Vermont Housing & Conservation Board Vermont Farm Viability Program Vermont Housing & Conservation Board 58 East State Street, Montpelier, VT 05602 Ela Chapin, Program Director 802 828 2117 ela@vhcb.org Liz Gleason, Program Assistant 802 828 3370 liz@vhcb.org www.vhcb.org/viability.html Front cover photos, top to bottom: mobile hen house at Scholten Farm; Bread and Roses farmstand at farmers market; David Fried at Elmore Roots Nursery; sheep at Hennessey Farm; Mimi Arnstein in her farm stand. This report is made by the Secretary of the Vermont Agency of Agriculture, Food and Markets, in collaboration with the Vermont Housing & Conservation Board, pursuant to 6 V.S.A. 4710(f)
Vermont Farm Viability Program Dear Members of the General Assembly: January 31, 2012 We are pleased to present this annual report for the Vermont Farm Viability Program. Since 2003, the program has offered on-farm business planning, financial and technical assistance services to 336 farmers. Since 2009, the program has supported 49 agriculture-related businesses with financial and technical services, enhancing the development of Vermont s processing and distribution infrastructure. Ag-related grants and technical assistance awards have increased capacity at slaughterhouses and meat processing facilities, expanded food-grade grain processing facilities, and supported the expansion of businesses aggregating and marketing Vermont-grown vegetables, meats, cheeses and other products. In 2011, 40 farms were enrolled and 21 farms and 10 ag-related businesses received matching grants to expand or build new infrastructure, improve farm facilities, or start new value-added enterprises Since 2005, the program has awarded 99 grants totalling $405,000, leveraging more than $1.1 million in farm investments through loans, other grants and private funds. 95-100% of participating farmers report improvement in their financial analysis skills and business planning skills. This has been an exciting year during which, with support from the Vermont Ag Innovation Center, we added business planning and technical assistance offerings to meet the needs of farm businesses wishing to scale up their meat and vegetable production, helping to meet increasing and often year-round demand from processors, restaurants and retail outlets. Also with AIC funds we have partnered with the Vermont Food Venture Center and NOFA-Vermont staff to deliver expanded, one-on-one technical assistance to farm and food businesses throughout the state. We wish to thank the USDA Natural Resources Conservation Service for identifying funding for the Vermont Farm Viability Program in 2012. NRCS funds secured by Senator Leahy since 2005 have matched state funding provided by VHCB, paying for program services and administration. Funding from USDA Rural Development, the Castanea Foundation and the John Merck Fund is instrumental to the Implementation Grants Program. The Farm to Plate Strategic Plan and the Working Lands Enterprise Investment Bill lay out a comprehensive agenda for Vermont agriculture. The Vermont Farm Viability Program will play a role in the implementation of these efforts, as we continue to assist farmers and ag-related businesses to strengthen and expand their operations, increasing the production of food, fiber and fuel products to meet the growing demand both in-state and beyond. We look forward to another year serving Vermont s agricultural businesses. Please call us with any questions you may have. Sincerely, Chuck Ross, Secretary Gustave Seelig, Executive Director 58 East State Street Montpelier, VT 05602 802 828 2117 www.vhcb.org/viability.html A program of the Vermont Housing & Conservation Board established in collaboration with the Vermont Agency of Agriculture, Food & Markets
vermont farm viability program PROGRAM MISSION The Vermont Farm Viability Program (VFVP) strives to enhance the financial success and long-term viability of Vermont agriculture. The VFVP provides financial and technical services to eligible Vermont farmers and agriculturally-related businesses. The program emphasizes the development of sound business plans in conjunction with technical advice from an individual or team of advisors, selected to match each individual farmer s or business needs. Assisting Farm Businesses During the approximately year-long process that culminates with the completion of a written business plan, the Program offers business planning assistance which includes in-depth financial analysis, analyzing marketing strategies, developing goals, and creating a plan to meet goals. Once business plans are complete, the VFVP offers further assistance in monitoring and implementing the goals of the business plan, including grants for capital projects when funding is available. During the implementation phase, participants may be referred to financing services, grant sources, or other programs that may be of assistance in meeting business plan goals. The Program enrolls between 35-50 farms each year. Assisting Value-Added Food and Farm Businesses: Developing Vermont s Processing, Storage and Distribution Infrastructure With funding from the USDA Rural Development and the Vermont Agricultural Innovation Center in 2011, the VFVP provided business planning and technical assistance services to farms producing value-added products and to value-added food businesses that provide processing, storage or distribution services to, or purchase products from, Vermont farmers. In addition, with private foundation funding, the VFVP offered grants for capital expenses related to infrastructure development to these same kinds of businesses. Since 2003, 336 farmers have completed business plans through VFVP. These businesses own or rent over 105,000 acres and provide the equivalent of over 1,100 full-time jobs. 2011 highlights: 40 farms developed business plans 44 farms received follow-up planning and technical assistance 15 farms received technical assistance awards 21 farms were awarded implementation grants 23 ag-related businesses received business planning services or grants ENROLLED FARMS 13 percent are dairy farms 28 percent produce vegetables 87 percent raise meat or livestock 23 percent are conserved 28 percent are certified organic 35 percent sell value-added products The Farm Viability Program is making a real difference for farmers across the spectrum from dairy to beef to vegetable farms and for value-added producers like cheese makers this program is giving farmers the benefit of an inside look at business planning decisions that can increase profits. As a result, farms are expanding, diversifying, and hiring help all good indicators for the industry and for Vermont s economy. Secretary Chuck Ross Agency of Agriculture, Food & Markets 2
Program Partners Business planning and technical assistance services are delivered on the farm or site of business, and are provided by contractors or by the following organizations as a part of the Vermont Farm Viability Program Network: UVM Extension provides a range of services to farmers, including Farm Viability programming. Extension Farm Viability staff are spread throughout the state and cover a wide variety of expertise, from conventional dairy to diversified farms. The UVM Extension Farm Viability Programs pair farmers with an adviser, working together to catalog assets, create a plan, incorporate ideas for new business ventures, and access financing. The Intervale Center provides farm viability assistance through their Success on Farms Program. They utilize skilled staff, business consultants and veteran growers to develop business plans with a diversity of farmers, including vegetable and fruit growers, dairy farms, livestock producers, and value-added producers. The program works to enhance not just the profitability of farms and value-added agricultural businesses, but also their social and environmental sustainability. NOFA-VT has been providing technical assistance to dairy, livestock, and fruit & vegetable producers since 1994, adding fruits, grains, and seeds along the way. With funding from VHCB, they expanded to add business planning services in 2003. NOFA works with organic producers, other producers interested in transitioning to organic, farmers exploring alternative energy or energy efficiency systems, and farmers pursuing value-added products. Land For Good offers education and assistance to owners and managers of working lands, entering farmers, and other-land use decision-makers throughout New England. LFG joins the Farm Viability Network in 2012 to provide specialized transfer planning expertise. Cheryl and JD DeVos, Ferrisburgh & Charlotte After conserving their farm in 2004, Cheryl and JD DeVos transitioned to organic with help from NOFAVT provided through the Farm Viability Program. In 2009, they reapplied to VFVP, this time to plan for a value-added organic milk bottling facility. A 2010 Farm Viability implementation grant will help them purchase equipment for the new enterprise: Green Mountain Organic Creamery, due to open in 2012. Chris Siegriest, Westford At Bread and Roses Farm, Westford native Chris Siegriest grows vegetables under the community supported agriculture (CSA) model. The business has grown to offer 70 full-sized shares and pursues a social mission as well: producing vegetables to fill 50 smaller shares for residents at a local senior housing development at a subsidized price. Chris completed a business plan with the Farm Viability Program in 2010, working with staff at the Intervale Center to focus on financial analysis. 3
Program Evaluation and Impacts Program participants evaluate the program after their business plan is complete, and at the end of their second year, following additional work with their advisor to update and implement their business plan. For farmers that completed plans in 2010, average gross income increased 38% (over $12,000) in the year after completing their business plan. For farmers enrolled in 2010, 97-100% report their financial analysis skills and business planning skills have improved since enrolling in the program. Farmers interviewed after their first or second year of the program said satisfaction with their overall business management ability rose from 31% before the program to 88% afterwards. Satisfaction with their ability to generate income rose from 31% to 69%, and their ability to understand the direction they would like the business to take increased from 28% to 84%. Farmers and ag-related businesses that receive a grant also complete an in-depth survey after their project is complete. Survey results show that the implementation grants program helps farm and ag-related businesses implement business plan goals, increase profits, improve access to financing, and create new jobs, while leveraging the investment of other funding sources for these improvements: 89% of phone survey respondents said that without grant funding, the project either would never have happened, happened later, or happened at a much slower rate. 92% of phone survey respondents stated that the implementation grant contributed to making their business more profitable. Eleven phone respondents offered additional details on job creation, reporting at least 35 FTE positions were created on these eleven farms, an increase of 3.2 FTE jobs per business! Irene Recovery Efforts In the wake of Tropical Storm Irene, the VFVP redirected $60,000 to UVM Extension for disaster recovery planning to affected farms. Eighty farms were contacted. Half reported damages and received shortterm recovery assistance. Six severely damaged farms are working on disaster recovery plans with UVM advisors. The Farm to Plate plan lays out ambitious goals for Vermont s food system over the coming 10 years, and has established a critical new piece of infrastructure, the Farm to Plate Network. VFVP Director Ela Chapin will play a role in the development of this new network as the first chair of the Farm to Plate Technical Assistance Working Group, and as a member of the Farm to Plate Network steering committee. The VFVP will play a role in implementing key objectives relative to the goals and strategies of the Farm to Plate Strategic Plan, including: Training for scaling up: Provide specialized scaling-up technical assistance and business planning services for farmers and value-added food entrepreneurs seeking to serve larger markets Support infrastructure improvements at slaughter and meat processing facilities. Increase custom and mobile slaughter capacity. Improve producers ability to access retail market outlets that require GAP or other forms of food safety certification. Increase the number of farmers participating in technical assistance and business planning services, especially related to diversification strategies, farm transfers, and retirement planning. Increase local egg production to meet 50% of local demand by 2020. Double in-state goat milk production to serve the value-added cheese industry. 4 Farm Viability staff convened two meetings in 2011 to address the coordination of recovery-related technical assistance in the wake of Tropical Storm Irene. Meeting in September and November, with a third meeting scheduled for this March, federal, state and regional ag development leaders met to share information, resources, and identify gaps in technical assistance to the farm community. Outcomes of these meetings to date have included new partnerships; collaborations in outreach to recovering farm businesses; the identification of particular issues that the VAAFM, State Legislature or other authorities may need to address; and improved awareness among farm service providers of various resources available to farmers. Farm to Plate Strategic Plan Implementation
Funding The Farm Viability Program is funded by a combination of state, federal, and private sources. State of Vermont funds through VHCB and federal sources from USDA Natural Resource Conservation Service, USDA Rural Development, and the Vermont Agriculture Innovation Center fund business planning and technical assistance services for farmers and ag-related businesses. In 2011, the Farm Viability implementation grants program was supported with generous private foundation funds from the Castanea Foundation and the John Merck Fund. Professional Development for the VT Farm Viability Network Each year the FarmViability Program provides significant professional development opportunities to farm and food business advisors, at regular meetings of the Vermont Farm Viability Network as well as at occasional special trainings or conferences. In 2011, the following trainings sessions were provided for farm service providers and consultants: Food Safety: Training on GAPs requirements for small farms Food Safety: Presentation by new UVM Extension food safety specialist Londa Nwadike Disaster Recovery Resources: presentation, roundtable, and coordination discussion Technical Assistance: Panel presentations from various technical assistance consultants Technical Assistance: Updates on the Vermont Ag Development Program Management Analysis: clarifying management roles and decision-making strategies Financial Analysis: Financial Planning Tricks and Tools This grant will not only benefit my business, but also many other small scale farms in Vermont. Clark Parmelee Clark Parmelee, a 2010 VTC Dairy Management graduate, began working on dairy farms in the Randolph area at the age of 13 and has been actively involved in agriculture ever since. During his time at VTC, Clark began raising broilers, pork, and beef on his parent s farm. His goal is to scale up production in order to create a viable, diversified farm providing full-time employment. Clark began helping neighbors to slaughter their chickens in 2010 and quickly realized there was high demand for small-scale poultry processing in the Randolph area. He used a $5,000 Farm Viability Ag Business grant to purchase a mobile poultry processing unit. Clark worked closely with the meat inspector at the Agency of Agriculture and the UVM Extension food safety specialist to ensure that the operation would be clean and safe. By mid-september, Clark had processed poultry for at least 25 small-scale producers, mostly in the Randolph area. Clark plans to begin marketing in 2012 to slowly scale up operation of the mobile unit. 5
Implementation Grants to Farmers Following completion of a business plan, farmers enrolled in the Farm Viability Program become eligible for implementation assistance in order to put their business plan into practice. Since 2005, the program has awarded 99 implementation grants for capital projects totaling $405,000 and 88 implementation awards for technical assistance. This $405,000 in grant funds has leveraged approximately $1,178,074 more in farm investments through loans, other grants and private funds. In 2011, VFVP awarded 21 farms with implementation grants totaling $95,000 and 15 farms with technical assistance awards totaling $40,050. Agricultural Infrastructure Grants In 2009, in partnership with the Castanea Foundation, the program began making awards for business plan implementation grants to agriculture-related businesses involved in the processing, marketing or distribution of local food. In 2009, four awards were made to meat processing businesses totaling $40,000. In 2010, awards targeted the grain processing industry as well as meat and poultry processing, and five awards were made totaling $65,000. In 2011, ten awards totaling $88,520 were made. In the three years this assistance has been available, $193,520 in awards to processors has leveraged an additional $600,000. Looking Ahead to 2012: Need & Demand Demand for business planning, implementation technical assistance and implementation grants continues to surpass the VFVP s capacity. There is a growing interest in the program from farms transitioning in ownership or farm type, beginning farmers, and in farms pursuing value-added products, as well as a high demand for assistance and grants for infrastructure improvements in the value-added food sector as well as on farms. The VFVP will strive to meet that need in 2012. In the coming year, the VFVP will continue to partner with the Vermont Sustainable Jobs Fund to enroll businesses in the Vermont Agricultural Development Program and, through funding from the Ag Innovation Center, will collaborate with NOFA-VT, the University of Vermont and the Intervale Center to increase meat production and processing capacity in the state by providing technical assistance and feasibility analysis to new and existing enterprises, and sponsoring trainings that bring together Vermont meat producers and processors. 2011 Agricultural Infrastructure Grants $9,250 grant to Vermont Salumi for sausage and cured meat processing equipment to increase production level $5,825 grant Putney Mountain Winery for sparkling cider production equipment to increase efficiency of cider production $16,250 grant to Vermont Refrigerated Storage for a digital inventory management and accounting system benefiting farmers selling to large markets who are in need of tracking for food safety plans. $10,000 grant to The Royal Butcher for excavation, foundation, and plumbing for a slaughterhouse addition to increase efficiency and throughput of this critical facility. $10,995 grant to Westminster Meats to purchase a vacuum packing machine to increase meat and poultry processing efficiency. $10,000 grant to the Mad River Food Hub to support the purchase of equipment to outfit their meat processing room and commercial kitchen. 6 $5,000 grant to Clark Parmelee of Parmelee Farm to purchase a mobile custom poultry processing unit to provide slaughter services to producers raising fewer than 1,000 meat birds per year. $2,300 grant to Sharon Beef to purchase a thermal printer to add value to the end product for their clients as well as improve plant efficiencies. $10,000 grant to Grow Compost to help implement an Aerated Static Pile Management system to increase the efficiency of their operation and improve product quality. $8,900 grant to Holton Farms towards construction of a cold-storage unit for more effective and safer crop storage, and a commercial kitchen to process products from their farm as well as others for inclusion in their CSA.
Jeremy and Leslie Michaud and family with Agriculture Secretary Chuck Ross Kingdom Creamery Churns Out Yogurt & Ice Cream: Now one of the largest family-operated dairy processors in New England The Michaud family has operated Clair-A-Den Farm in East Hardwick for over seventy years. Three generations have grown and diversified the farm to its current size of 700 acres, with just over 1,000 cows, a 6,000-tap sugaring operation, and an on-farm composting business. The Michaud family has continuously pursued new ideas to expand their farm s horizons in order to ensure the long-term profitability of their farm for future generations. Though the family had already expanded and diversified their business, Jeremy and Leslie Michaud felt that to continue to succeed in the face of fluctuating milk prices they needed to diversify their core milk business. When the nearby Vermont Milk Company went on the market in 2009, Jeremy and Leslie jumped at the opportunity. They turned to the Vermont Farm Viability Program to write a business plan that would evaluate the market demand and feasibility of a creamery and help secure financing to start Kingdom Creamery of Vermont, a valueadded yogurt and ice cream facility using milk from Clair-A-Den Farm. Jeremy and Leslie worked closely with Rosalie Wilson, a business advisor in the Farm Viability network who specializes in sales and marketing, to develop the plan and secure a loan to start the pro- cessing facility. After completing market research, they realized a niche for several products made on a mid-sized scale: soft-serve mix, Vermont-made premium ice cream, and Vermont-made yogurt. The Creamery opened in October of 2011 and is selling product in more than 50 stores across Vermont. Operating the processing facility allows the Michauds to return a higher milk price to the farm than selling in bulk, which increases and stabilizes income for the farm, and the Creamery has hired three additional employees since its inception. T he Farm Viability Program and the consultant helped take a wild idea and bring it to earth, give it substance and turn it into a reality. Kingdom Creamery of Vermont could not have been accomplished as effectively on our own. Leslie Michaud 7
Pete Colman, Vermont Salumi Leaders in Vermont s food system have exciting things to say about artisanal cured meats and Rowan Jacobsen of Vermont Public Radio believes that Salumi (aka charcuterie or cured meats) is the obvious next frontier in Vermont s food revolution. Pete Colman (at left, below, with partner Sumner Crowel) plans that his new business, Vermont Salumi, will fill this niche. Vermont Salumi was launched in January of 2011, informed by Pete s five years of making prosciutto as a hobby a skill learned from time spent in Italy with his father s family and friends. When he began looking into opening a business making only cured meats, though, he found that the The Farm Viability Program helped our business on several levels.we were able to develop a website that helped significantly improve our marketing operations, a business plan that helped under pin a new tractor purchase and several enter prise expansions, and improve our bookkeeping, database, and human resource management. Andy Jones Intervale Community Farm The business planning process helps you take a really good look at your business and gives you an idea of things to come. With a solid plan and reasonable requests for funding I have not had trouble accessing capital. Pete Colman Sitting on the sandy soils of the Champlain Valley, the Intervale Community Farm is in its 21st year a feat that couldn t have been achieved without the spunk and determination of farm manager Andy Jones. In 2008, the farm faced a critical junction and sought out the Vermont Farm Viability Program for in depth, one-on-one planning. In order to preserve the relationship the farm had built with the community, the business planning process helped to usher in a cooperative system with the farm s customers. regulatory requirements to sell dry-aged meat and the turn-around time of the product (it can take several months to a year or more for cured meats to be ready) were prohibitive. With the help of a business planner from the Vermont Farm Viability Program, Pete was able to examine the costs and benefits of a cured meat business and create a plan for getting there. Vermont Farm Viability Program Vermont Housing & Conservation Board 58 East State Street, Montpelier, VT 05602 www.vhcb.org/viability.html 802 828 2117 8