Low-Cost, Low-Debt Farming Possible for Beginning Growers – DTN

    Farming was not a likely path for Nathan Vergin, a 26-year-old dairy producer in Albemarle County, Va. His father worked in information technology in Minnesota. The family owned a few acres, and Vergin enjoyed working with the family’s handful of animals. But it was a paying farm job that propelled him into a career. “When I worked full time at a sheep dairy, I realized farming was what I wanted to do,” he said.

    Today, Vergin manages a herd of 40 dairy cows.

    He has 200 consumer-customers who have invested in his cows and who also pay $28 per month to buy a gallon of milk per week. He’s reached this early point in his career with no owned land and little debt.

    His dream seemed nearly impossible until he happened to hear semi-celebrity organic farmer Joel Salatin, author of “Fields of Farmers,” speak. With profitable farming and publishing enterprises, Salatin also runs an internship program for would-be producers on his Polyface Farms, near Swoope, Va. After an interview, Vergin began working on Salatin’s farm as an apprentice in 2005. For six years, Vergin learned the ropes of rotational grazing, managing grass-fed-only livestock and farming with minimal infrastructure and equipment. Salatin paid Vergin for his work. Vergin rented the ground from Salatin that allowed him to begin his herd and a cow-share business.

    Vergin is not unlike many young farmers who dissociate farming from land ownership. Even so, he is tackling his new enterprise without the support and resources that often come the way of young operators from a farming family. The key to low-resource farming: low costs.

    “Land ownership and farming are two different businesses,” said Vergin’s mentor, Salatin. “When you put the capital cost of land into beginning farming, plus nonportable infrastructure, it becomes cost prohibitive,” he explains.

    Vergin is now renting 500 acres from a former dairy farmer. The land was an active dairy farm from the 1940s until 2004. Landowner Ben Thomas leases acreage to Vergin at $20 to $40 per acre. Vergin also rents structures from Thomas, including a milking parlor, holding area, shop, equipment shed, free stall and calf barn. Vergin manages Thomas’ beef cattle herd as part of the deal and rents equipment from him on an hourly basis.


    The arrangement makes it possible for Vergin to farm and, even more importantly, earn a living. “There’s 40 acres and a house down the road for sale for $6.5 million,” Vergin said, noting that buying land is not even an option for him right now.

    He’s able to make his small dairy herd pay well by direct-marketing his milk through a cow-share program. Customers pay a $50 annual fee to participate in the cow-share program and then pay $28 per month to get a gallon of milk per week. Customers have the option of picking the milk up from the farm or from delivery locations in the Charlottesville area. Vergin’s wife, Amy, typically handles milk deliveries. Vergin counts 200 families in his cow-share program and has a waiting list. He also sells milk to a local cheesemaker. The cows produce about 500 gallons of milk per week.

    Vergin’s financial investment has been minimal compared to the average farm. He borrowed money from family to buy his starting herd along with some used equipment. He took on some debt to rent acreage from Thomas but said that will be paid off in two years. Vergin’s dairy operation supports him and his wife, their three children and an intern.


    Farming without land ownership isn’t stress-free, despite the substantially lower debt load. Vergin said before he found the Thomas dairy, he had pasture rental lined up elsewhere and was about to move his dairy cattle there from land he had rented from Salatin. But that deal fell through just six weeks before he needed to turn the acreage back over to his mentor.

    “That was nerve-wracking,” Vergin remarks, with an anxious laugh. “At the time, I had a wife, one child and a second one on the way.”

    He managed to work out a last-minute deal with Thomas. Vergin said he appreciates his landlord’s willingness to offer advice, if asked, but to also back off and let Vergin pursue dairying his own way.

    Vergin doesn’t anticipate owning land any time in the near future.

    “If you get out of the idea you have to own land to farm, it opens a lot more opportunity,” he said, adding that he’s not opposed to owning land. “I’d like to own land one day,” he said, “but it has to make financial sense.”

    Nathan Joppeck, another young producer, has also found ways to cut the costs of starting out, though in his case, buying land was a near necessity. He raises grass-fed beef, pork, lamb, chicken and eggs alongside a small produce and maple syrup operation.

    “My dad and I split my grandparents’ farm,” he said. “If we had not bought it, there was a risk we might have lost the family farm.”

    Joppeck purchased his 60 acres seven years ago and has about 35 acres of pasture, a couple of acres in fruit and produce, and the rest in woods. To support his land purchase, Joppeck still works off the farm, though he plans to eventually farm full time.

    “That leads to a lot of early mornings and late nights,” he said. But he’s following Salatin’s advice of starting small. It creates an easier learning curve and also helps new farmers reach profitability more quickly, he said.

    Joppeck keeps purchases for equipment and supplies to a bare minimum when he starts a new venture, so he can pay off any debt with his first harvest. He also rents a large share of his equipment and hires out services like haymaking.

    While owning equipment might be more convenient, it’s often not practical for someone just starting out.

    “The first thing is to make sure you are making profits on your products from the get-go, but then those profits must be used to grow the business instead of relying on debt,” Joppeck contends.

    It’s a business model that works for Salatin, who follows the principles featured in his book: Start small, minimize capital expense and stay as portable as you can.

    Salatin owns 360 acres but manages a total of 1,200 acres of pasture and 800 acres in forest. He runs 1,000 head of cattle, expects to sell about 800 head of hogs this year and has 2,000 turkeys, 25,000 broilers and 4,000 laying hens.

    In the past decade, his profits have increased from $400,000 to $2 million. That money helps support 20 full-time employees and a thriving internship program for beginning farmers.

    Salatin said he’s never had a business plan but has always operated on one question: “How do you have low-capital, high-return enterprises as a small farmer?” Some of his answers: Major fencing and shelter expenses can be minimized by creating portable shelters and using electric fence. Portable, moveable shelters work well for poultry. He makes hoop houses for shelter out of nursery shade cloth and wood, uses electric fence to rotationally graze livestock and moves the animals daily to what he calls “fresh salad bars.”

    He also advocates avoiding machinery purchases unless you can keep it working year-round. “If you’re going to invest in machinery,” Salatin said, “it’s too expensive to let it sit idle.”

    Vergin avoids large equipment purchases and said, “It’s a lot cheaper to lease small stuff than to buy a $300,000 combine. For big-ticket items, collaborate, lease and rent, especially the things you only use once a year.”

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