Friday Takeaway: Broke Down
The Daily Hampshire Gazette, May 25, 2018, by Caroline Pam.
It’s only May, but it’s gotten up to 80 degrees, and we’re already hustling like it’s July. At best, this time of year is full of amazing potential — but there are so many things that can go wrong.
Over 100 varieties of hot peppers went in the ground today, and we’re harvesting thousands of radish, kale and bok choy bunches in the heat. But what’s got me sweating is the worry that we’ll run out of money before the cash starts coming in.
We’ve got 15 people picking, packing and planting vegetables Monday through Friday, and food is shuttling from the fields in Whately to the washroom in Sunderland all day long.
Only three weeks into the growing season, and both our harvest vehicles just landed in the shop. The one we call “Harrison Ford” appears to be down for good; “Beyoncé” just needs brakes and some Bondo putty so that its rusty body might pass inspection.
Like many farms, we have a motley collection of old pickup trucks and cargo vans that we purchase used and drive hard. High mileage is no biggie since they don’t hit the highway, but heavy loads down bumpy roads all day, every day, takes its toll. Turns out the timing chains on the old police van I bought in September just ran out of time.
It’s a cliché to say farming is unpredictable. And this kind of equipment breakdown affects all kinds of businesses. That doesn’t make it any easier to stomach an unforeseen $10,000 bill at the point in the season when payroll outpaces payments rolling in.
It’s taken a lot of years to figure out how to predict the farm’s cash flow needs and line up loans to get us through the spring planting push. And our needs keep growing since we’re ordering a year’s worth of custom-printed sriracha bottles and salsa jars at the same time as the farm’s fertilizer and seeds.
Even when we score a grant, like we did for a new USDA high tunnel this year, it means first securing financing to buy it and build it before you see a dime. So if it weren’t stressful enough pushing to get the frame up and covered in time to plant the heirloom tomatoes, I’m also panicked we’ll use up our operating loan before the reimbursement comes.
As soon as the crops start cranking, and our crew is full time in the field, our buyers have 30 days before the tide reverses and cash starts flowing in. This means that by the end of June, we stop drawing new funds from the operating line and start a strict plan of repayment so it’s paid in full by the end of the year. Often we get to December before we’re caught up. Some years we never catch up.
In times like these, we break out the credit cards, and triage the bills to hold a few that can wait until tomato sales hit the bank. Or we do a sriracha sale to drum up some big orders. The most important strategy is flexibility and forecasting — and a good relationship with our lenders.
Of course, it also helps to grow nice vegetables. That’s a whole other story. But it’s also the whole point.
I never thought I’d be interested in learning how to manage a business and finances until it became necessary to our goal of growing good food — just as my husband, Tim, never intended to be the machine guy who fixes tractors and cultivators, but that’s what’s required to bring the fava beans and fennel to life.
We’ve gotten a bit more scientific with our systems, but it’s still a leap of faith. So, we just show up every day to weed the carrots, plant the cucumbers, seed the cabbage, and harvest the collards. And keep an eye on the bank account.
Caroline Pam owns and operates Kitchen Garden Farm in Sunderland with her husband, Tim Wilcox. The farm grows organic vegetables, makes award-winning sriracha and salsa and hosts an annual hot pepper festival, Chilifest, in September.