July 4, 2025 • 51 mins
Are you considering a new agricultural venture? Then this is the video for you. Before you jump in, check out this video on the Intel for Ag website tool. Tim Reinbott talks with Mallory Rahe about this new exciting tool for small farmers, specialty crop farmers, and people interested in expanding their agricultural business.
👉 Intel for Ag Website Link: https://intelforag.org
Video Podcast Part One: https://youtu.be/wQkfF_TWzQs
Video Podcast Part Two: https://youtu.be/9UZ0Pkpx5i0
Transcript: 7-4-25 Tim's Take Episode 37 - Intel for Ag.doc
#Specialtycrops #farmersmarket #cafnr #moaes
Visit https://moaes.missouri.edu/ to learn more.
The Missouri Agricultural Experiment Station (MOAES) extends CAFNR research to nearly 14,000 acres across the state to meet regional research and demonstration needs of agricultural producers and natural resource managers. MOAES has a storied history of major impacts in advancing science in agriculture, food and natural resources — locally, nationally and globally. These CAFNR laboratories provide research faculty with a wide variety of real-world conditions to test and develop strategies for agricultural production based on the geographical and climatic differences of our diverse state.
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Episode Transcript
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(00:00):
[♫]
(Tim Reinbott) Welcome to Tim's Take! And today we have a very special guest, Dr. Mallory Rahe. She's
with... she's Associate Extension Professor and this: Agricultural Business and Policy Education
Director for MU Extension. That's a mouthful! (Dr. Mallory Rahe) Ah... thanks so much, Tim!
(00:24):
It's a pleasure to join you. (Tim) Well, thank you for coming! And what does that mean? That you're
the director of what? (Mallory) Uh... so our Ag Business and Policy team really looks at, um...
how we can support farmers and educate lenders and tax preparers on understanding the farm
finance side and farm business questions. Uh... we also look at, uh... different ag policies,
(00:49):
and our group tries to support our on-campus FAPRI team (the Food, Ag, and Policy Research Institute)
which looks at policies at a national level. We... we would like to take their information and make
it more accessible to folks here in Missouri. When there's a new Farm Bill, our team jumps on
sort of educating Missouri producers about those policy changes. (Tim) So really this is that arm
(01:13):
of Extension, it's not so much on production as it is in marketing, and... and... and how when it all
comes down to the end. (Mallory) Yes! Keeping good records, um... making sure you're... you're...
you really understand, uh... when you're ready to invest in your business and expand and grow
and don't get overleveraged, and all of that good stuff. We do a lot on budgeting and pricing your
(01:35):
products. (Tim) You know, my brother worked under you as a Farm Management Specialist in the in the
Delta region, and I'm an agronomist background, and he shot down so many of my great ideas because
it didn't pencil out! (Mallory) That's what we're here for. (Tim) That's what... yeah,
that's what you're here for. You're the... what? The bearer of bad news sometimes. Or,
(01:55):
you can help them get through those weeds! (Mallory) Yes. (Tim) And that's what we're
here about. (Mallory) Yes. (Tim) Because you have a very special program called Intel for
Ag? (Mallory) Yeah. It's a... it's a free online website that's really built to help producers
make more informed, stronger decisions about how they want to use their land and their property.
(02:18):
So this tool, I think, has wide applicability across the state, and I appreciate the chance
just to talk about it a little bit. Our goal is to get more people in the platform and using it.
You can... especially if you're interested in sort of a non-typical, non-commodity form of
agriculture. We've built a lot of resources to help educate producers and understand how viable
(02:42):
these operations might be. (Tim) So, some people may not like going to the web and getting all the
information. Can they talk to a real live person too? (Mallory) Absolutely! That's what we're here
for. (Tim) So it's either you, or maybe like my brother, the Farm Management Specialist, in...
in the different regions, or... ? (Mallory) Yes. Yes. I'm... I'm an easy point of contact. My name
is on the... the website, and I like to just kind of help direct people. Uh... we also have a... a
(03:06):
place where you can just submit your questions, and we get those and respond. So... (Tim) Well,
this is a... you... you shared with me some of your stats. Uh... 42% of all the farms in the
US are under 50 acres. (Mallory) Right. A lot of people don't realize that. (Tim) Because
we think of the large farmers, which are the bulk of the farm acres. (Mallory) Yes, and they
(03:27):
are... they provide the bulk of our, uh... farm production too. Right? (Tim) Of commodities or
livestock. (Mallory) They are critical to our farm system. This tool is not really meant for them.
This tool is meant for smaller acres. Or, if... if they have a piece of their operation that they are
looking to pivot and diversify, great! But... but this is not for, um... you know, the traditional
(03:51):
corn/soybean/wheat commodity farmer. (Tim) Unless they want to diversify. (Mallory) Yes. (Tim) So,
and we'll get to that in just a little bit. So you're... you're talking about... uh... I mean,
they could have 300 acres and still be part of this because... because they're... they're doing,
uh... direct sale beef, for example. That could be something. (Mallory) Right. We've
seen a lot of growth in, um... this concept of diver... diversifying here in Missouri, and your,
(04:16):
uh... your example of direct marketing beef is great. Agritourism. Often we see people combining
that with some vegetable production. We have a robust set of farmers' markets across the state,
and that gives... all of those opportunities are a chance for a producer to interact directly with
their end consumer and capture more of that margin of the product, and... and hopefully,
(04:41):
be more profitable as well. (Tim) Yeah, because I've heard customers say they would rather...
they're not as worried about if it's organic, for example, or non-organic. They're more worried
about knowing their... their producer. (Mallory) That's right! Think about a farmers' market. You
can walk up and literally talk to the person who created that product. You can ask them any
(05:03):
question you want about that product. How it was made. (Tim) Right. (Mallory) The ingredients. You
know, down... down to when. When exactly did you pick this beet? (Tim) Right! This morning or...
or last week. (Mallory) But that is a tremendous amount of information that does have value for
some consumers, and we're seeing more and more consumers who do see the value of that and want to
(05:26):
pay for that experience. (Tim) And you touched... started talking about experience, you touched on
also that some customers want to come to the farm. (Mallory) Yes! (Tim) And make the direct purchases
there. (Mallory) Yes. We saw a lot of growth in on-farm visits in the agritourism industry during
COVID when a lot of other entertainment options were kind of taken off. Um... and... and suddenly,
(05:50):
the abil... the ability to be outdoors was really highly valued, and we... a lot of people got to
Missouri farms for maybe the first time. Now, it's up to the agritourism operators to keep it
fresh and keep getting people to come back. (Tim) Right. (Mallory) And... and we see... that's when
we see a lot of entrepreneurship in that area, and they're... you know, they're adding maybe berry
(06:12):
production so that you can come, not just in the fall, but in the summer to pick berries as well.
There's adding the Christmas tree production, which takes years to mature, but then you're...
one more opportunity to get that family to come back to you, back to your farm, and have another,
um... sales transaction. (Tim) Or, you may attract them with one thing, let's say a sunflower patch.
(06:36):
I'm just thinking about that. And then... but then, also what you're really making your money
on is selling the produce. (Mallory) Yeah! Or... or the apple cider donuts. (Tim) Exactly! Yeah,
because I... I... I've seen folks value-add their... their stuff. Not just sell the... the,
uh... commodity... (Mallory) Right. (Tim) ...but also, uh... baking or... or making apple cider
(06:57):
out of it, as... as you mentioned. So, and then the other thing I... I noticed is that 44% go
out fairly quickly. (Mallory) This is not an easy business, and when you're small scale,
you often have constraints to your capital. You're... you have constraints to your labor. You
(07:18):
may be entirely relying on your... yourself, your family, your friends, which can work in the short
term until something happens. Um... and the more you diversify your operation, the more management
skills, the more you need to be thoughtful about positioning yourself to the customer so that you
(07:39):
don't overwhelm the customer with choices or get lost in the, "Oh, now I'm just like everybody
else, and my customer can't find me anymore." It takes a lot of skills. And what we have found when
we work with producers who are in this space, they often don't spend enough time thinking about the
economics of it. They get really excited about the dream and the goal, and you can kind of spend way
(08:06):
more money than you realize, or be underpricing your product to the point that the more you sell,
you're literally losing money because you haven't adequately factored in all of your
costs. (Tim) And this website can help with that. (Mallory) That's right! This website has a... a
bunch of different resources, but the... one of the areas I'm super passionate about is the market
(08:28):
intelligence piece. And this allows any farmer in the US to enter an address in the continental US,
um... and then choose a radius between 10 miles and 100 miles of that address, and it's going to
generate a report on who lives in that radius based on census data. So it's going to tell
(08:51):
you this many people. Um... this is their average median income. These are the nearest communities.
This is their estimated demand for local food in a broken out in a bunch of different categories like
fruits and vegetables and meat. And so it gives that producer a really... a quick look at who
is in my immediate area. How far out should I be trying to attract my customer? And also on there,
(09:17):
we have pricing tools that help a producer really look at their cost of production when
you get post-harvest. So, what are you putting into each of your products and from a packaging,
you know, other ingredients, your time and labor, processing equipment, so that you know your break
even price revenue and units. And then we also have a separate tool because we... we've developed
(09:43):
these things by working directly with producers, and they identify that, "Hey, this is my pain
point." So, we had a lot of people that just did not understand their cost of production for that
processed value-added item. Then as we worked with more producers, we had those producers that were
looking at scaling up, and maybe they want to go beyond their initial market, whatever that
(10:06):
was... a farmers' market or a CSA. And they were particularly interested in wholesale accounts,
but they were not sure how much they could afford to discount their price. The wholesaler wants
the discount. (Tim) Sure. (Mallory) The trade-off between that price discount and expected volumes,
and every market channel has different specific costs. If you want to sell to a grocery store,
(10:32):
you just need more regulations. You need to follow... you need to comply with more food
safety regulations. You need more certifications. All of those things have costs. So there's a tool
on this website that helps a producer walk through the market channels they're either currently in or
interested in, so that they can understand the additional cost to being in that market.
(10:54):
(Tim) Wow. That... that really covers a lot of material then, doesn't it? It really does. So back to the
location then, it tells you how many people you have and expected. Does it take in... in household
income? (Mallory) Yes, it does. It shows that. It also tells you age, um... race and ethnicity. It
just talks about those people. A lot of times what we find, successful businesses in this space need
(11:19):
to find their niche. Who is their target customer? And we know people's preferences for products vary
a lot by age, income, race, and ethnicity. And so the more you are cognizant of this, and the
more you can interact with potential customers, the more you can learn how to really position
(11:39):
your business to speak to that target customer. (Tim) Right. Wow, that's... you know, because
that's amazing. Because I always think you need to be near a large population to make something
like this work. (Mallory) No! No! (Tim) You can be in the most rural area of... of Missouri and
make something work? (Mallory) If you try hard. (Tim) If you... (Mallory) And... and you're...
(11:59):
so... (Tim) But you got to have something that they like. (Mallory) You got to have something
that they like. You've got to be competitive. You've got to let people find you. And if the
more rural you are, the more you need to be a destination. Right? You... you've got to make
this a true experience. You've got to get people to come. And it's even better if you can kind
of link up with other destination spaces in your area. Right? The more rural you are though, this
(12:23):
tool will help you actually assess. Let's go back to farmers markets because this is what I think
is a very good opening place for someone to start marketing their product. Simply because, like you
and I are sitting here, I can look you in the eye as my potential customer, and I can also ask you
questions. "Hey, what brought you to the market today?" "What kind of products are you looking
(12:45):
for?" "How often do you eat beef?" "Are you looking to build this more into the center of your
plate?" "Let me talk about the values of my farm, and... and I'd really like to help you understand
how to... to get more beef on your table. And I want to know, are you interested in like a... a
whole? A half? Quarters? Do you... or smaller bundles?" Right? (Tim) Sure. (Mallory) Like,
(13:06):
"What... what kind of freezer space do you have?" And very quickly, you can elicit a
ton of customer research that's firsthand. Now, it's great if you have somebody else
there who can kind of keep doing sales but also like be taking notes. (Tim) Right. Right. Well,
I have a friend that does direct sales at farmers' market of beef. (Mallory) Mhm. (Tim) And he's very
(13:27):
interested, and he found out his customers are okay with grain finished beef as long as it's
not corn. (Mallory) Really? (Tim) Because of the GMO factor. (Mallory) Ah! (Tim) So he's looking at
non-GMO type of finishing. So that means he has to raise it himself or... or know his... his sources,
(13:47):
and so that... but... but again, that opens up new markets. (Mallory) Absolutely! (Tim) It makes him
special. (Mallory) Yes. I've also seen people market, um... grain-fed beef as "traditional
beef," right? You know, it's... it's about positioning the value of your product, being able
to talk about those values in a way that resonates with the customer. And in your example... well,
(14:07):
that isn't... that's a pivot that that producer can make. Right? May... maybe they can't pivot to
grass, but here... here they can pivot and... and satisfy customers. (Tim) Sure! But now,
so let's say I love, though, to raise beef. Or I love to raise blueberries, but I don't want to go
through this marketing stuff. Kind of like me. You met my brother a while ago. He's the ma...
(14:30):
he's the farm management. I'm the grower. But you... do you help connect people then to... to get these
larger groups together? (Mallory) Well, we're... not exactly. (Tim) Okay. (Mallory) What we like
to do is educate people about their options and encourage them to network locally because that's
like a really good place to start. And what I found is that in this specialty crop space,
(14:55):
a lot of times you will find producers that are very willing to work with somebody else,
to... to coach them, to give them some tips, to bring them on-farm, and show them, "Hey,
this is how I do things." And MU Extension does a lot of this. We... we set up programs,
and we bring people on-farm so that others in the community can learn from this particular mushroom
(15:17):
grower or apple orchard producer. And I think that's really great. And every producer has to be
really honest with themselves about what is within their desire. Like, what... what are their goals
for their business? What are they truly capable of doing? Because you're absolutely right. Not
everyone wants to be that face to face with the customer. (Tim) Right. Right. While others love
(15:40):
it! (Mallory) Others do. So if you don't love it, you need to look at some other market channel
opportunities, or you need to find ways to connect with those farmers who do love the public nearby.
A lot of agritourism operations sell products from other farms. They aggregate, and they want
to do that because it gives the customer more of a reason to browse and shop, and they see that
(16:05):
as the net benefit. They want to keep that person in their store longer, but they may not have the
capacity to grow everything in that store. So it's a win-win. (Tim) Like I might be growing,
uh... lots of berries, but then someone else could grow some fresh vegetables... (Mallory) Right!
(Tim) ...that we have year round too, so... yes! So that's great. Uh... but also, so that becomes
(16:28):
more of a destination then, doesn't it? (Mallory) Yeah! Gives people more of a reason. That... you
know, don't just come for the one item, just the berries! (Tim) Right! (Mallory) Come and...
and buy more. (Tim) Cuz... you know, you go into a local convenience store for one thing, you'll come
out with two or three. (Mallory) That's right. (Tim) It's the same principle. (Mallory) More if
you have your kids with you. (Tim) Yes! Or... or grandkids for me. Yes, yes. One thing that
(16:50):
you also mentioned was when you get a budget, pay yourself. (Mallory) Yes! (Tim) People forget that,
don't they? (Mallory) Oh, please! Yes. They forget it all the time, but that's one of
the... one of our mantras. We just really try to help people understand the value of their time
and the opportunity cost. Right? There's a lot of things you can do with your personal time, with
your land, with your equipment, your assets. Be creative. Be passionate about it, but don't forget
(17:16):
to truly account for those costs so that you're either well positioned to scale, or you can truly
decide when this is not the right fit for me. I... I cannot make a go of this. I need to pivot and
try something else. (Tim) You know, I've been to conferences where they'll have a farmer come in,
a very successful farmer. And more often than not, they take time for vaca... family vacations. They
(17:42):
have already calculated what their, um... health going to cost. You know, the health insurance.
What... what they can... what they can provide for their... for their workers. All of that has
to come into... into the play, so you have a good quality of life. (Mallory) Yes! There's so much
passion in agriculture. It's one reason why I... I love working in this space, although I'm no longer
(18:04):
farming myself, but I think we have also let a lot of burnout happen and a lot of, you know, mental
health and stress accumulate because not enough people have prioritized those things you just
talked about. And truly, I try to help farmers see their farm as a business, and that gets you
(18:27):
run out of the room some days. (Tim) Because it's a lifestyle too! (Mallory) Oh, sure! And... and
it's an identity, and it's a passion, but let's also try to treat it as a business so that it does
say... stay sustainable. And... and that's... when you do that, it's more easy to transition
that business to the next generation or another successor. But if we keep everything in the dark,
(18:51):
if we don't have good records, if we have no idea what's really going on financially... well,
that's when we see a lot of farms that don't successfully transition as well. (Tim) You know,
years ago when I was a kid, uh... a older couple were transitioning their... their farm to their...
the daughters and their... and their... and their families. And they made a comment, "Well, we just
(19:13):
did this for fun." You know, it was... it was fun to them. And profits, they probably made them,
but that that wasn't their forefront. (Mallory) That is true. We still see that today. You know,
there were a lot of people that sort of, um... decided to do a big lifestyle change during the
pandemic as well. Right? We... we heard a lot of stories and worked with people that, "Oh,
(19:33):
I'm here from California." Or, "I... I'm... I'm... quit my job in St. Louis so I could retire early.
Now I own this farm in the Ozarks." (Tim) "What do I do?!" (Mallory) Yeah! "What do... I'm excited,
but I don't know where to start." And again, having Intel for Ag was really helpful because we
could help them sort of, "Okay, you've got a lot of options. Here's some questions to work through.
(19:56):
Here's some concepts to consider. Spend some time on the website and then come back to us." Right?
Because there are... the... the right answer about what to do is a complex one that depends on a lot
of personal, but also like the actual production and financial, um... resources. (Tim) Because you
mentioned, 30% of farmers have 10 years or less farming. (Mallory) Yes! Was that number also
(20:22):
surprising? (Tim) Yes! Yes! You think somebody grew up in this, so... so you can enter into
the market. (Mallory) Right! We know there's big barriers. (Tim) Land cost. (Mallory) Yes. Yes,
that's a huge one. Uh... and it's why we have people come to us, and they don't have any land,
and they're super passionate. And they are like, "Yeah, I think I just need to go out and buy 70
(20:44):
acres." Not... no! Not necessarily. You know, let's talk about how you can step into this at
a smaller scale. How can you lease some land? How can you really just... what are you trying to do
with this? And let's maybe start a little bit smaller. (Tim) Yeah, I was surprised. I... I...
I was at one of these conferences, and a person was in a flower farm that they started it more
(21:08):
as a hobby for their kids. Get them something to do. And now that's their full-time business
on about an acre. (Mallory) Yes! (Tim) But it's all marketing. They... they know their markets,
and they also, they sell a lot to florist, and they know what the florists want. (Mallory) Yes!
Yes. (Tim) They did... they've most of... some of it's trial and error, but they've talked to
the florist. (Mallory) And that's a great point. If you're in this space, you have got to talk to
(21:31):
your customer. Farmers' market or if it's another business-to-business, you've got to be making the
rounds. Beating on doors. Having conversations with people to truly figure out in your area,
or if you're going to make the decision that I need to drive 30 miles or 50 miles,
learn about that market and figure out the best way to pivot. (Tim) Because years ago, uh... one
(21:53):
of... one of our retired faculty members started growing blueberries. (Mallory) Oh! (Tim) It was
over the hills and through the woods to get to there, and... and my dad said, "Yeah, it's the
destination." That's why... what... that's why you want to go. You can get blueberries in the
store if you want to, but half of it is driving, making a 30 minute drive and getting to pick your
own. (Mallory) Right. (Tim) That's what you... that's what people want. (Mallory) Right. That's
(22:15):
right. (Tim) And what he did, so he had... he had, uh... his blueberries, then he had Christmas
trees. So you see his Christmas trees growing over there, "Oh, I'm gonna come back!"
(Mallory) Exactly! That's how they get you! I mean, but... but truly, that is the value of... of having land,
and... and you know, we may not... if you grew up on a farm, you may not always perceive that value.
(22:37):
Or you may overlook that value of just being in a rural setting without a lot of traffic, just some
rolling hills, which we've got a lot of that here in Missouri, and it's beautiful! It's absolutely
beautiful. And it really can just reduce people's stress and just, ahhhh! (Tim) Well,
you know when I was a kid, I grew up on a farm, and we'd go camping. We slept in cuz this was our
(23:02):
first time to... that we could sleep in, you know! Where everybody else around us was up at the crack
of dawn! What would I want to do that for? I'm on vacation! But... but we take that for granted,
don't we? (Mallory) We do. (Tim) That other people want to experience that. (Mallory) Mhm. (Tim) You
know, you mentioned sometimes people want to scale up. Now I've heard as a entrepreneur,
you watch Shark Tank and those type of... type of things. It's that scaling up, that's where you can
(23:26):
fall... fall over the cliff, isn't it? (Mallory) Oh, yeah! I mean... (Tim) I mean, you're good
at... good at doing it as a supplemental income, but then trying to get it as your sole income,
that can be issues. (Mallory) Right. So one of the challenges is that as you are trying to scale,
you quickly outpace your labor available to you. And equipment in some of these specialty crop
(23:49):
industries can get very expensive very quickly. So that truly, to be at that scale, you either need
to... to find a custom harvester to work with you, or you need to get big enough that you can justify
and pay for that equipment cost. Because having 10 acres, you may need the same equipment as if
you had 50 or 60 or 70. (Tim) Right. And equipment share could be a a part of this. (Mallory) That's
(24:12):
right. That's right. That's another great reason to always get to know your neighbors if you're
new to... in agriculture or new to farming, find those other entrepreneurial people around you.
They're there. You may just have to look for them a little bit and drive a bit, but that's how you
open up the door to conversations about more, you know, equipment share and leasing. (Tim) And...
(24:33):
and you also talked about talking to other farmers. Are you worried about saturating
a market? (Mallory) Yes... yes. At a very local level. I'll go back to farmers' markets. Farmers'
market managers will turn vendors away when they have too many of the same kind because
they want to see vendors succeed, so each farmers' market can only support so many meat producers.
(24:59):
So many bakers. Vegetables are generally kind of the one area where the more the merrier,
but um... that's one example of market saturation. However, there's so much opportunity
to differentiate yourself in this space. That's why a lot of producers are very transparent and
willing to work with people because they don't see them as competition. They see it as, "Okay,
(25:21):
here's another opportunity to have a space, have a reason to get a customer out here to collaborate
and offer more." (Tim) Well, I even have some friends that... that at the farmers' market,
and they'll say, "I'll grow everything vegetable wise except tomatoes. I'll let the other folks
grow the tomatoes." (Mallory) Yes. Tomatoes are highly seasonal, um... unless you're super...
(25:46):
you're sophisticated enough to grow them in a high tunnel. And if you can, then you can capture a
huge market premium. (Tim) Early! Yes! (Mallory) Yes! It's like, how quick can you get that tomato
to that farmers market? The one that tastes way better than the grocery store. But if you're not
that good at growing tomatoes, and you're only producing them at the height of the summer when
everybody else also has tomatoes... (Tim) Why? (Mallory) Yeah. You might be losing money.
(26:10):
(Tim) Right! Right. Oh, yeah. Well, let's wrap it up for this segment, and we'll talk to you next time.
(Tim Reinbott) Well, welcome! Today we're continuing our interview with Dr. Mallory
Rahe about, um... well, entrepreneurship... (Dr. Mallory Rahe) Yes! (Tim) ...in... in
our agriculture. And they have this wonderful tool called Intel for Ag that's free online,
(26:35):
and you can... and you can use it if you want to try to... if you're getting into a specialty crop,
or you're trying to maybe grow your specialty crop. But also, they can... they have folks that
you can talk to also because you have questions sometimes, you or your... or your staff around the
state can always be helpful talking. (Mallory) Yes, that's right. (Tim) So... so we've talked
(26:57):
about a lot of things last time. Um... one of the things that I had a... had a colleague that sold
at the farmers' market, and she sold vegetables. And she told me, "We don't need more vendors. We
need more customers." And she really wished that there was a way that they could, what they don't
(27:17):
sell on that Wednesday or that Saturday, that they could... that they could market wholesale
to... to somebody. They could take it maybe to St. Louis or to... to... to larger places. Is there
help for that to try to make these connections? (Mallory) Well, it's not so much about helping
them make the right connection because we do see like shifts in markets all the time, but what we
(27:39):
try to help producers do is think through what is the right way to use my surplus? Of the market
channels I have, have I positioned my product well in them? Have I priced it accordingly? Have
I done enough customer research? And then, okay. Now as I grow, as I outgrow some of my markets,
(27:59):
or... or this market is, you know, declining... some of our farmers markets do struggle to attract
enough customers when... especially when they have to relocate, uh... or they get
a new market manager and some policies change, and... there's, you know, lots of reasons. But,
um... what you do with your seconds is a big question because my first question back to her,
(28:24):
it would be, "Can you afford to wholesale?" Let's make sure that we know that answer before you go
out and try to make contact and find somebody to talk to. (Tim) Because you'd be selling it
under... under your production price. (Mallory) Yes.Yes. Or, what price do you need for those seconds?
And that will help us understand what market may be most likely a good fit for you. We do
(28:47):
have produce auctions here in Missouri. That... that may be an avenue. Um... again, it comes
down to that price, however. Because if you need a higher price, then maybe it's time to look at some
value-added processing instead. That's another option. Or maybe you need to find a partnership
with a local restaurant that's not actually paying you a wholesale price because the right type of
(29:13):
restaurant for the right type of product, uh... let's talk about like a specialty heirloom tomato,
they're not going to sell those, you know, by the carton. Uh... they're going to slice those. Put a
few on each plate. It... it... it's a elevated meal, and they're willing to pay an elevated,
not wholesale, price. (Tim) But you need to be able to furnish that for an extended
(29:37):
period of time. (Mallory) That's right. That's right. That's when... so again,
I like to start on price. Let's talk about price and what you know about your customers, and then,
okay, your current market isn't working. We need to go learn about other market opportunities. But
it's not like an easy one-to-one match. It really goes back to how much can you grow? How consistent
(29:58):
are you? What are you willing to do? Are you just competing with everybody, or do you have something
really specialty? And then, what does it look like? What are your value-added opportunities
to throw in the mix? (Tim) Cuz I... one of the very successful growers in Wisconsin told us one
time that of his tomatoes he can't sell, he makes into salsa. (Mallory) Yeah! (Tim) But you better
(30:21):
have a good salsa. (Mallory) You need to have a competitive recipe because there's a million
salsas out there. (Tim) There is! There is! And is there... is there help to figure out where do I go to
get the... the label for it? The... the regulations? Because now you're... you have a... a product
that's going to have a few more regulations to... attached to it. (Mallory) Right. So, uh... I'm not
(30:42):
a food safety expert. (Tim) Oh, sure! (Mallory) We do have a Food Safety Food Science Division here
at Mizzou. (Tim) And they can help. (Mallory) They can help. But I'll say for our Missouri audience,
we don't have a uniform food safety code here, so the best thing to do is start with your local
health department because some... they... they have the ability to set more strict rules than the
(31:05):
state. And then depending on what product you're producing, you're going to want to talk to the
appropriate, um... state agency next. (Tim) But start with your county. (Mallory) Start with the
county. (Tim) That's per... that's... that's... that's great to know. You know, we mentioned
earlier, um... the pandemic. How people wanted to go get out. Go to the countryside. Go and,
(31:26):
but it also has changed, the pandemic, what was starting to be trend just pushed us they
say 15 years into the future. (Mallory) Oh! We have not seen such dramatic shifts in consumer
behavior that quickly in a very long time. And so, what's really been interesting is that it did,
(31:48):
the pandemic pushed a lot of people into buying locally for the very first time. Just like...
just like going to a farm for the first time. Some people were deeply scarred by going into
a local grocery store and not finding food. That was... that was a first in my lifetime
experience. (Tim) Yes! (Mallory) Right? And I think it made people a lot more concerned about,
(32:09):
um... our food supply system and this desire to have strong domestic food, uh... sources,
and... and that puts a spotlight on our local farmers. So a lot of people turned to say,
"Where can I find farmers?" (Tim) Well, and so how our farmers advertise has... makes a
(32:29):
difference too. (Mallory) Absolutely! (Tim) You know, what worked pre-pandemic's not working
now. (Mallory) Well, that's an interesting. You know, we see there's so many trends, also,
in the way that people get information. Right? And um... I think we're in the... we're in a period of
change, and things haven't quite settled out. So we offer classes on marketing in Extension,
(32:55):
and so we're doing a series right now, actually this month. And we were on the... the, um... webinar
with folks a week ago talking about what marketing channels are... work the best for you? And we had
quite a few people who said, "It used to be social media and now, ah! Facebook is so crowded. I make
(33:16):
a post. No one's seeing it like they used to." (Tim) Right. (Mallory) Um... "I'm no longer...
I'm... a lot of my friends are leaving Facebook. I'm not even sure Facebook is good for my
business." Whereas before, Facebook was really what a lot of people treated as their online front door
to their business. And... and so as a business owner, it's so important that you're really honest
(33:40):
with yourself about who is my target customer. Who am I trying to reach? And learning about where
they are. People are over, uh... print newspaper. That came... that... we've seen that time and
time again. There's a lot of producers who are just also flat out scared to spend on marketing,
which made Facebook attractive because it was completely free. (Tim) Right. (Mallory) You know,
(34:04):
these are people who don't even want to pay for a website, for example. But um... there's just...
there's such a shift in sort of what works across different areas of the state. Because, while we
had some people, this was a statewide webinar - we had people from all over. We had people saying,
"Oh, it doesn't work! It doesn't work!" Somebody else said "No, it completely works. Facebook in
(34:25):
my area is like the very best way to reach folks." And that is an example of just how different these
things can happen, uh... based on your target customer. (Tim) And age group! (Mallory) And
age group. And are you trying to sell hyper-local? Do you have online stores? You know, who is your
customer? (Tim) So like, you may have a front at a... at a farmers' market, but... but really
(34:52):
you'd rather have people come out. But you got to have your farmers' market so people know who
you are. (Mallory) Great customer exposure. (Tim) Yes. (Mallory) Yes. (Tim) But... but then there's
more later on. And then of course, that great experience will be spread by word of mouth,
too. (Mallory) Right! Right. But then it's like the extra cost of making sure people have a great
experience when they come on-farm, and not everybody likes to have the public in their
(35:15):
backyard at all hours. Because you may say that you can only come between this hour and this hour,
but once people have your address, they may show up at any time. (Tim) So does the, uh... you know,
the honor system, could that be part of it too, I suppose? (Mallory) Yes! Again, uh... roadside
stands are a very low cost way to... to sell products, but it is the honor system. And you
(35:40):
have to sort of be okay with that, and know that it's just like you-pick-berries. They always say,
"Don't eat the berries." (Tim) Right. (Mallory) But, you know it happens! (Tim) But I have a
friend who's retired from his job, and he's doing you-pick-blueberries, and he's encouraging me,
"Yeah, eat some!" You know, because he wants that experience to be good. If kids come there,
(36:03):
and they drop their bucket, that's okay! (Mallory) Yes, yes. (Tim) You... you... you've got to be
customer oriented. (Mallory) You really do. And some people have the personality for that,
and... and the time and the willingness to manage employees. A lot of our agritourism places, they
really have to staff up during their peak season, and that sometimes pushes a farmer into a brand
(36:24):
new space for the first time. "Oh, shoot! I've got all these high-schoolers that I need to like,
monitor and train and just... (Tim) Well, we have a friend who, uh... in the fall sells
pumpkins. (Mallory) Mhm. (Tim) And his philosophy is, "I'd rather sell them for $4 a piece,
and people can get several because they want to spend about $20... $25 to $30." Whereas, going
(36:46):
to another place, they get to buy two. (Mallory) Sure. (Tim) But... but he may be underselling it
if he really got his return to himself, he's not making anything. (Mallory) Yeah. (Tim) I mean,
there's... you got to look at that way, don't you? (Mallory) He could be using
those pumpkins as the loss leader for his farm. You know, to say, "Okay. Well, they know I have
(37:06):
the cheapest pumpkins in the county. They're going to come here. But then they're also,
I... that's okay with me that I lose a little on my pumpkins because I have a great farm store. I,
you know, I'm selling... I'm selling my beef right there as hamburger patties. I can move
hamburger patties all day long, and before, I had nowhere to sell all this beef." So it's a
win-win. (Tim) So a loss leader is you... you're willing to take a little bit of loss on it to get
(37:30):
your people there. (Mallory) Yes. (Tim) Stores do that, don't they? (Mallory) Of course! They do it
all the time. They're sophisticated. They have a ton of data, and they crunch this stuff all the
time. But the savvy farmer can learn a lot from grocery stores and watching the circular ads. And,
you know, it's like we said a minute ago, once you get somebody on your property, you've got them,
and now you want to keep them there and expose them to as many opportunities as...
(37:55):
as you can. (Tim) So we're right in the middle of the egg pandemic. (Mallory) Yes! (Tim) So,
and we still see some home growers selling their eggs, their brown eggs, for $2.50 to $3. Are they
being... are they missing an opportunity when they could probably triple that price to sell
(38:15):
out? Or... or what? (Mallory) Well, let's go back to who is your target customer. Because
if you are a small egg producer, and you have loyal customers, and these customers have been
good to you, and you don't have to spend a lot of marketing, and it's fairly easy to sell your eggs,
and you have high trust with your customer base, and it's like, they might understand and want to
(38:41):
support a small increase, but if you were going to double your prices, you would lose them all.
Potentially. (Tim) Right. (Mallory) Some people are extremely price sensitive, and they don't want
to... no one wants to feel like they're getting gouged. Right? So I think given what we're seeing,
yes, producers don't want to be... now is not the time to be losing money as an egg producer. Like
(39:07):
there... there's no excuse for that, right? Uh... you're not trying to stay in business. Like this
is the time to make sure you're covering all of your expenses, but you've also got to be sensitive
to who your customers are. And if you truly want a higher price, then maybe you need to shift
markets. Doubling your price or tripling your price to your current customer could just make
them all disappear. (Tim) And you won't get them back. (Mallory) Yes. That's right. (Tim) Because
(39:29):
other people that have went into the egg business will... will take that business. (Mallory) That's
right. (Tim) Just on principle. (Mallory) Right. (Tim) That's just like my brother once mentioned,
uh... the grain farmers were... had... had a great year. And he said, "You know, this might not be
a bad year to give your landlord a little bit extra." (Mallory) Right. (Tim) "Because someday
you're going to be in a tight situation, and he might return the... the favor." (Mallory) Well,
(39:54):
and grain farmers are in that, who are leasing, are right now. And that... that
is exactly right. Customer relationships are so critical. Um... so when you're face
to face with your customer, whoever that is, if it's your landlord or your actual,
um... retail consumer, you've got to really be thinking about that relationship. (Tim) It... it
all boils down to relationships. (Mallory) Yes. (Tim) Whether it's a farmers' market. They're
(40:19):
coming to your... to your... to your farm to... to... to purchase, or even if you're,
uh... selling to someone wholesale, that they know they're getting a good product from...
from what you... you have. (Mallory) Right. Right. (Tim) So, anything else we want to talk about...
about this Intel? I mean, what else do you offer that we haven't touched on? (Mallory) Yeah! So,
(40:40):
um... we haven't really talked about the Business Startup tab, which is another,
um... feature that I've worked a lot on. So this is where, again, we built this website to try to
help people work through their questions at their own pace. And when... and outside of office hours,
right? So like, I'm very willing to answer the phone and answer emails. I get busy though,
(41:03):
too. And so, we had so many people that were interested in starting a farm, and they didn't
know where to start. Or interested in starting a value-added ag business. So on the website,
there are six different portals of tools. The Business Startup is one of those portals, and
from there, you can access, um... a short quiz. We don't collect any emails. We don't... we don't do
(41:26):
anything. It's... it's all anonymous. But answer a few questions in order to cut down the list of
questions to think about, print it off, and then kind of work your way through that what does it
truly take to start a business? From a license and legal perspective, and you know, thinking
about your product and your markets. A lot of the things we've been talking about, we actually have
(41:47):
set up as a checklist for people for the people who really want to be orderly. Now there's also
people who get excited about something, and then the next day they're in business. And
that's... that's good too. (Tim) That's the way I would be. That's the way I would be. And... and my
wife and I are opposites, and she's the one, "No, we're going to go through this thoroughly." Oh,
that's no fun. (Mallory) Yeah. Well, other tools on the website are meant for people like your
(42:10):
wife, who really want to think through, "Okay, I think I want to have an elderberry patch, but what
does it take?" You know, and so we have what we call, um... Management Capabilities Quiz. So it's
just 25 questions. Again, so you know, like no one sees the results except for you, but it helps
somebody think through the different components of these enterprises, so they can assess,
(42:37):
okay. Do I have the labor? Do I have the finances? Do... what's my marketing skill set look like? To
really identify, okay, can I succeed? Again, this isn't crystal ball, but it's to help guide people
towards, okay. Here's an area of weakness. Maybe it is marketing. Or maybe it's really my land
(42:58):
availability. We have a different tool here that, um... produces Land Suitability Maps by different
crops. (Tim) Oh, wow. (Mallory) So you just do the drop down, pick the crop you want, and it
pulls up a map of Missouri and shows suitability for that crop across the state. You're the...
the production guy, the agronomist, right? (Tim) Right. (Mallory) Like, that's when I say, "Hey,
(43:21):
talk to the agronomist." But just because you want to do it, doesn't mean you can. (Tim) Well,
you know, growing up in the Bootheel, we had pecan trees. And I, moving up here and this...
these soils, I wanted pecan trees! And the forestry folks said they don't do well up here. But
I'm growing one anyway! I've harvested like zero pecans off my place because they were right!
(43:47):
Because, you know, there's... there's reasons. (Mallory) Right. (Tim) So... so there's... so we
have to do our homework. (Mallory) Right. Right. And... and that's what this tool is meant to do.
It's to help people kind of do their homework, to kind of reflect on, you know, themselves,
their land, their markets, and... and be more informed as they're looking to get in
this space or expand. (Tim) And is... is it just for growing something? Or could people
(44:11):
make something? (Mallory) Well, um... that's an interesting question. I think we really tailor
this towards farms. (Tim) Okay. (Mallory) So, yes. I'm going to stick with farms. (Tim) Okay,
yeah. You're... you're... you're... if... and if you're making something, it's with the pro...
produce that you've grown. (Mallory) Yes. Now, our Break Even Tool, um... which helps people kind of
(44:34):
identify all the costs of the product they're producing so they're selling it appropriately
to cover those costs, this is really useful for that grower who is buying from someone else and,
you know, pulling ingredients in. Or I... I like to tell people when they're working on that,
if they don't know how to price their tomatoes, for example, for their salsa very well, you know,
(44:56):
look at what it would cost you to buy that tomato from someone else. And sometimes,
you're better off not growing that tomato. (Tim) Right! (Mallory) Grow cucumbers. Grow pumpkins.
Do something else. But if you have a killer salsa recipe that just really sells, find a good grower
and let them grow that tomato for you. (Tim) Because you may need a specific tomato to make
(45:19):
it... (Mallory) Yes. (Tim) ...really be the way it's supposed to be. (Mallory) Right. (Tim) And
earlier you mentioned the produce auctions. Now that's... that is your
ultimate wholesale. (Mallory) Well, it's... I would call it a more accessible wholesale. Like,
we have large, terminal, wholesale markets in the United States. The closest one here is in Chicago.
That's for super big farmers, right? Our... most... most specialty crop farmers in our state
(45:44):
are not going to go to those terminal markets. (Tim) No. (Mallory) So I see our produce auctions
as a great middle ground because they are... they operate, um... you can find all of them online. We
have a link to it from our website, trying to help raise awareness. And... and truly like any market,
you need to learn more before you just sign up and... and do it. So I've visited some of these,
(46:07):
and they're fascinating transactions! And you can buy just one or two sometimes of hang... like one
or two hanging baskets, and then they're going to sell the entire rack. Right? (Tim) Right.
(Mallory) Um... and... and that is a great place to just educate yourself on, okay. What is the
wholesale price? Recognizing that these prices are highly seasonal. So there's just a lot of
(46:33):
work that you need to do in the price discovery area if you really want to succeed. (Tim) And
do you all have that... that... that data, like that price of that hanging basket in April versus
mid-April versus May? (Mallory) Well, it's interesting you brought that up because we're
trying to work on it. But a lot of our auctions in Missouri record everything by hand, and so there's
(46:55):
not an easy way to digitize that. Um... so what we've done is we've taken the USDA federal data,
like the... the... the ag marketing service reports from the 11 large terminal markets. We do,
um... we make that more accessible to growers, and we have a dashboard for that. And working with
(47:18):
producers since we put that data up, we found that producers were already using that in some cases,
which we were excited to hear! And when we ask them, "How are you using it?" They say,
"Oh! Well, I look at that and then I either double or triple it in order to set my price." (Tim) Oh,
really? (Mallory) Because they know that those are prices that a large farm at a tremendous scale,
(47:39):
and if you look at those prices too, you can gauge seasonality over the time. And I... I just had a
grower ask me for that information. I just pulled it for him. He's looking to go into blueberries,
and he said, "Hey, can you show me? What was the... what was the price today?" And I was like,
"Well, this isn't really applicable. You wouldn't be selling blueberries today in future years."
But you go to the Chicago market and, yeah. It was quoting prices for blueberries from
(48:02):
Chile and Peru. (Tim) Oh, wow. (Mallory) So as a local grower in Missouri, you don't want
to base your blueberry prices off of the prices of a producer in Chile and Purdue... Peru make,
right? (Tim) Right. (Mallory) Like, that just does not make sense. (Tim) So is your
you-pick, let's say I'm talking about blueberries, is that then your ultimate, uh... retail then?
The... the you-pick? Because they... I would think they'd pay a little bit more because
(48:25):
they're getting experience, and they're getting a fresh product, and they probably get to see the
grower. (Mallory) Yes. Yes. And that's a great way to, um... one advantage of you-pick is you don't
have to have the labor. Right? You're basically outsourcing the labor to your customer, and you're
charging them a premium for the experience. Um... (Tim) I love that! (Mallory) However,
you have to be willing to like, let them go through the orchard and do things wrong,
(48:48):
and pick... pick blueberries that maybe weren't ready and... and eat a bunch and knock some off
and spill back... buckets and all of that. I think the ultimate for a blueberry grower would be in
the value-added space though. (Tim) Oh, really? (Mallory) Yeah. (Tim) To sell, maybe you have
a bakery there! (Mallory) Yeah! (Tim) So maybe you have your... you come to my farm for this,
this, and this, and we have blueberry muffins. (Mallory) There you go! And on a... on a per
(49:12):
blueberry basis, you should be getting the highest price at that level, but you-pick is a great way
to move more blueberries. (Tim) But that's just a way... that's just probably the evolution of
your... of... (Mallory) Yes! (Tim) You start with a few products, and then you start going more and
more. (Mallory) Producers have to stay nimble. The customer is changing. Uh... the competition is
(49:33):
changing. Uh... you... you got to try things, and you've got to learn and adapt. Take good records,
reflect, and keep changing. (Tim) And maybe your customer... let's say you're selling to
a restaurant that only has local foods, having that relationship with them is important too,
isn't it? (Mallory) Absolutely! (Tim) Where you can get a premium, whether it's that tomato that
(49:54):
they want for their slices, or if it's the... the meat product. (Mallory) Yes. (Tim) And... and...
and they, because I know they'll often say, "This is from X and X farm." (Mallory) Right!
They're... they want to be transparent about that because they know their customer values
that. (Tim) Right. And then that... then if you're that farm, you're... you're probably selling to
(50:15):
direct farm... direct too on your farm? (Mallory) You could be. Um... again, it... it... it goes
back to sort of your what... how much product are you trying to move? (Tim) Sure. You know, Tim.
I got all excited! Now I want more and more and more! (Mallory) But every market you go into has
a different set of costs, and it... and it takes time. It all takes time and energy to maintain
(50:36):
and market and... yeah. (Tim) All right. Well, this has been fantastic! Now I'm ready to retire
from this and start my own farm again! So... (Mallory) Just please go to Intel for Ag first,
Tim, and do some due diligence. (Tim) I'll get my wife to do that, and she... and then she can tell
me what to do. (Mallory) Okay! [laughing] (Tim) Well, thank you so much. Is there anything that
you want to add right before we leave? (Mallory) No. Thank you so much! (Tim) All right. Well,
(50:58):
this has been it for Tim's Take. We had a great time. And... and before you start on a... on a
entrepreneur project, check out Intel for Ag. They can solve a lot of your issues before we
start. We'll see you next time from Tim's Take. That was fun! (Mallory) That was fun!
[♫]
[♫]
(Tim Reinbott) Welcome to Tim's Take! And today we have a very special guest, Dr. Mallory Rahe. She's
with... she's Associate Extension Professor and this: Agricultural Business and Policy Education
Director for MU Extension. That's a mouthful! (Dr. Mallory Rahe) Ah... thanks so much, Tim!
(00:24):
It's a pleasure to join you. (Tim) Well, thank you for coming! And what does that mean? That you're
the director of what? (Mallory) Uh... so our Ag Business and Policy team really looks at, um...
how we can support farmers and educate lenders and tax preparers on understanding the farm
finance side and farm business questions. Uh... we also look at, uh... different ag policies,
(00:49):
and our group tries to support our on-campus FAPRI team (the Food, Ag, and Policy Research Institute)
which looks at policies at a national level. We... we would like to take their information and make
it more accessible to folks here in Missouri. When there's a new Farm Bill, our team jumps on
sort of educating Missouri producers about those policy changes. (Tim) So really this is that arm
(01:13):
of Extension, it's not so much on production as it is in marketing, and... and... and how when it all
comes down to the end. (Mallory) Yes! Keeping good records, um... making sure you're... you're...
you really understand, uh... when you're ready to invest in your business and expand and grow
and don't get overleveraged, and all of that good stuff. We do a lot on budgeting and pricing your
(01:35):
products. (Tim) You know, my brother worked under you as a Farm Management Specialist in the in the
Delta region, and I'm an agronomist background, and he shot down so many of my great ideas because
it didn't pencil out! (Mallory) That's what we're here for. (Tim) That's what... yeah,
that's what you're here for. You're the... what? The bearer of bad news sometimes. Or,
(01:55):
you can help them get through those weeds! (Mallory) Yes. (Tim) And that's what we're
here about. (Mallory) Yes. (Tim) Because you have a very special program called Intel for
Ag? (Mallory) Yeah. It's a... it's a free online website that's really built to help producers
make more informed, stronger decisions about how they want to use their land and their property.
(02:18):
So this tool, I think, has wide applicability across the state, and I appreciate the chance
just to talk about it a little bit. Our goal is to get more people in the platform and using it.
You can... especially if you're interested in sort of a non-typical, non-commodity form of
agriculture. We've built a lot of resources to help educate producers and understand how viable
(02:42):
these operations might be. (Tim) So, some people may not like going to the web and getting all the
information. Can they talk to a real live person too? (Mallory) Absolutely! That's what we're here
for. (Tim) So it's either you, or maybe like my brother, the Farm Management Specialist, in...
in the different regions, or... ? (Mallory) Yes. Yes. I'm... I'm an easy point of contact. My name
is on the... the website, and I like to just kind of help direct people. Uh... we also have a... a
(03:06):
place where you can just submit your questions, and we get those and respond. So... (Tim) Well,
this is a... you... you shared with me some of your stats. Uh... 42% of all the farms in the
US are under 50 acres. (Mallory) Right. A lot of people don't realize that. (Tim) Because
we think of the large farmers, which are the bulk of the farm acres. (Mallory) Yes, and they
(03:27):
are... they provide the bulk of our, uh... farm production too. Right? (Tim) Of commodities or
livestock. (Mallory) They are critical to our farm system. This tool is not really meant for them.
This tool is meant for smaller acres. Or, if... if they have a piece of their operation that they are
looking to pivot and diversify, great! But... but this is not for, um... you know, the traditional
(03:51):
corn/soybean/wheat commodity farmer. (Tim) Unless they want to diversify. (Mallory) Yes. (Tim) So,
and we'll get to that in just a little bit. So you're... you're talking about... uh... I mean,
they could have 300 acres and still be part of this because... because they're... they're doing,
uh... direct sale beef, for example. That could be something. (Mallory) Right. We've
seen a lot of growth in, um... this concept of diver... diversifying here in Missouri, and your,
(04:16):
uh... your example of direct marketing beef is great. Agritourism. Often we see people combining
that with some vegetable production. We have a robust set of farmers' markets across the state,
and that gives... all of those opportunities are a chance for a producer to interact directly with
their end consumer and capture more of that margin of the product, and... and hopefully,
(04:41):
be more profitable as well. (Tim) Yeah, because I've heard customers say they would rather...
they're not as worried about if it's organic, for example, or non-organic. They're more worried
about knowing their... their producer. (Mallory) That's right! Think about a farmers' market. You
can walk up and literally talk to the person who created that product. You can ask them any
(05:03):
question you want about that product. How it was made. (Tim) Right. (Mallory) The ingredients. You
know, down... down to when. When exactly did you pick this beet? (Tim) Right! This morning or...
or last week. (Mallory) But that is a tremendous amount of information that does have value for
some consumers, and we're seeing more and more consumers who do see the value of that and want to
(05:26):
pay for that experience. (Tim) And you touched... started talking about experience, you touched on
also that some customers want to come to the farm. (Mallory) Yes! (Tim) And make the direct purchases
there. (Mallory) Yes. We saw a lot of growth in on-farm visits in the agritourism industry during
COVID when a lot of other entertainment options were kind of taken off. Um... and... and suddenly,
(05:50):
the abil... the ability to be outdoors was really highly valued, and we... a lot of people got to
Missouri farms for maybe the first time. Now, it's up to the agritourism operators to keep it
fresh and keep getting people to come back. (Tim) Right. (Mallory) And... and we see... that's when
we see a lot of entrepreneurship in that area, and they're... you know, they're adding maybe berry
(06:12):
production so that you can come, not just in the fall, but in the summer to pick berries as well.
There's adding the Christmas tree production, which takes years to mature, but then you're...
one more opportunity to get that family to come back to you, back to your farm, and have another,
um... sales transaction. (Tim) Or, you may attract them with one thing, let's say a sunflower patch.
(06:36):
I'm just thinking about that. And then... but then, also what you're really making your money
on is selling the produce. (Mallory) Yeah! Or... or the apple cider donuts. (Tim) Exactly! Yeah,
because I... I... I've seen folks value-add their... their stuff. Not just sell the... the,
uh... commodity... (Mallory) Right. (Tim) ...but also, uh... baking or... or making apple cider
(06:57):
out of it, as... as you mentioned. So, and then the other thing I... I noticed is that 44% go
out fairly quickly. (Mallory) This is not an easy business, and when you're small scale,
you often have constraints to your capital. You're... you have constraints to your labor. You
(07:18):
may be entirely relying on your... yourself, your family, your friends, which can work in the short
term until something happens. Um... and the more you diversify your operation, the more management
skills, the more you need to be thoughtful about positioning yourself to the customer so that you
(07:39):
don't overwhelm the customer with choices or get lost in the, "Oh, now I'm just like everybody
else, and my customer can't find me anymore." It takes a lot of skills. And what we have found when
we work with producers who are in this space, they often don't spend enough time thinking about the
economics of it. They get really excited about the dream and the goal, and you can kind of spend way
(08:06):
more money than you realize, or be underpricing your product to the point that the more you sell,
you're literally losing money because you haven't adequately factored in all of your
costs. (Tim) And this website can help with that. (Mallory) That's right! This website has a... a
bunch of different resources, but the... one of the areas I'm super passionate about is the market
(08:28):
intelligence piece. And this allows any farmer in the US to enter an address in the continental US,
um... and then choose a radius between 10 miles and 100 miles of that address, and it's going to
generate a report on who lives in that radius based on census data. So it's going to tell
(08:51):
you this many people. Um... this is their average median income. These are the nearest communities.
This is their estimated demand for local food in a broken out in a bunch of different categories like
fruits and vegetables and meat. And so it gives that producer a really... a quick look at who
is in my immediate area. How far out should I be trying to attract my customer? And also on there,
(09:17):
we have pricing tools that help a producer really look at their cost of production when
you get post-harvest. So, what are you putting into each of your products and from a packaging,
you know, other ingredients, your time and labor, processing equipment, so that you know your break
even price revenue and units. And then we also have a separate tool because we... we've developed
(09:43):
these things by working directly with producers, and they identify that, "Hey, this is my pain
point." So, we had a lot of people that just did not understand their cost of production for that
processed value-added item. Then as we worked with more producers, we had those producers that were
looking at scaling up, and maybe they want to go beyond their initial market, whatever that
(10:06):
was... a farmers' market or a CSA. And they were particularly interested in wholesale accounts,
but they were not sure how much they could afford to discount their price. The wholesaler wants
the discount. (Tim) Sure. (Mallory) The trade-off between that price discount and expected volumes,
and every market channel has different specific costs. If you want to sell to a grocery store,
(10:32):
you just need more regulations. You need to follow... you need to comply with more food
safety regulations. You need more certifications. All of those things have costs. So there's a tool
on this website that helps a producer walk through the market channels they're either currently in or
interested in, so that they can understand the additional cost to being in that market.
(10:54):
(Tim) Wow. That... that really covers a lot of material then, doesn't it? It really does. So back to the
location then, it tells you how many people you have and expected. Does it take in... in household
income? (Mallory) Yes, it does. It shows that. It also tells you age, um... race and ethnicity. It
just talks about those people. A lot of times what we find, successful businesses in this space need
(11:19):
to find their niche. Who is their target customer? And we know people's preferences for products vary
a lot by age, income, race, and ethnicity. And so the more you are cognizant of this, and the
more you can interact with potential customers, the more you can learn how to really position
(11:39):
your business to speak to that target customer. (Tim) Right. Wow, that's... you know, because
that's amazing. Because I always think you need to be near a large population to make something
like this work. (Mallory) No! No! (Tim) You can be in the most rural area of... of Missouri and
make something work? (Mallory) If you try hard. (Tim) If you... (Mallory) And... and you're...
(11:59):
so... (Tim) But you got to have something that they like. (Mallory) You got to have something
that they like. You've got to be competitive. You've got to let people find you. And if the
more rural you are, the more you need to be a destination. Right? You... you've got to make
this a true experience. You've got to get people to come. And it's even better if you can kind
of link up with other destination spaces in your area. Right? The more rural you are though, this
(12:23):
tool will help you actually assess. Let's go back to farmers markets because this is what I think
is a very good opening place for someone to start marketing their product. Simply because, like you
and I are sitting here, I can look you in the eye as my potential customer, and I can also ask you
questions. "Hey, what brought you to the market today?" "What kind of products are you looking
(12:45):
for?" "How often do you eat beef?" "Are you looking to build this more into the center of your
plate?" "Let me talk about the values of my farm, and... and I'd really like to help you understand
how to... to get more beef on your table. And I want to know, are you interested in like a... a
whole? A half? Quarters? Do you... or smaller bundles?" Right? (Tim) Sure. (Mallory) Like,
(13:06):
"What... what kind of freezer space do you have?" And very quickly, you can elicit a
ton of customer research that's firsthand. Now, it's great if you have somebody else
there who can kind of keep doing sales but also like be taking notes. (Tim) Right. Right. Well,
I have a friend that does direct sales at farmers' market of beef. (Mallory) Mhm. (Tim) And he's very
(13:27):
interested, and he found out his customers are okay with grain finished beef as long as it's
not corn. (Mallory) Really? (Tim) Because of the GMO factor. (Mallory) Ah! (Tim) So he's looking at
non-GMO type of finishing. So that means he has to raise it himself or... or know his... his sources,
(13:47):
and so that... but... but again, that opens up new markets. (Mallory) Absolutely! (Tim) It makes him
special. (Mallory) Yes. I've also seen people market, um... grain-fed beef as "traditional
beef," right? You know, it's... it's about positioning the value of your product, being able
to talk about those values in a way that resonates with the customer. And in your example... well,
(14:07):
that isn't... that's a pivot that that producer can make. Right? May... maybe they can't pivot to
grass, but here... here they can pivot and... and satisfy customers. (Tim) Sure! But now,
so let's say I love, though, to raise beef. Or I love to raise blueberries, but I don't want to go
through this marketing stuff. Kind of like me. You met my brother a while ago. He's the ma...
(14:30):
he's the farm management. I'm the grower. But you... do you help connect people then to... to get these
larger groups together? (Mallory) Well, we're... not exactly. (Tim) Okay. (Mallory) What we like
to do is educate people about their options and encourage them to network locally because that's
like a really good place to start. And what I found is that in this specialty crop space,
(14:55):
a lot of times you will find producers that are very willing to work with somebody else,
to... to coach them, to give them some tips, to bring them on-farm, and show them, "Hey,
this is how I do things." And MU Extension does a lot of this. We... we set up programs,
and we bring people on-farm so that others in the community can learn from this particular mushroom
(15:17):
grower or apple orchard producer. And I think that's really great. And every producer has to be
really honest with themselves about what is within their desire. Like, what... what are their goals
for their business? What are they truly capable of doing? Because you're absolutely right. Not
everyone wants to be that face to face with the customer. (Tim) Right. Right. While others love
(15:40):
it! (Mallory) Others do. So if you don't love it, you need to look at some other market channel
opportunities, or you need to find ways to connect with those farmers who do love the public nearby.
A lot of agritourism operations sell products from other farms. They aggregate, and they want
to do that because it gives the customer more of a reason to browse and shop, and they see that
(16:05):
as the net benefit. They want to keep that person in their store longer, but they may not have the
capacity to grow everything in that store. So it's a win-win. (Tim) Like I might be growing,
uh... lots of berries, but then someone else could grow some fresh vegetables... (Mallory) Right!
(Tim) ...that we have year round too, so... yes! So that's great. Uh... but also, so that becomes
(16:28):
more of a destination then, doesn't it? (Mallory) Yeah! Gives people more of a reason. That... you
know, don't just come for the one item, just the berries! (Tim) Right! (Mallory) Come and...
and buy more. (Tim) Cuz... you know, you go into a local convenience store for one thing, you'll come
out with two or three. (Mallory) That's right. (Tim) It's the same principle. (Mallory) More if
you have your kids with you. (Tim) Yes! Or... or grandkids for me. Yes, yes. One thing that
(16:50):
you also mentioned was when you get a budget, pay yourself. (Mallory) Yes! (Tim) People forget that,
don't they? (Mallory) Oh, please! Yes. They forget it all the time, but that's one of
the... one of our mantras. We just really try to help people understand the value of their time
and the opportunity cost. Right? There's a lot of things you can do with your personal time, with
your land, with your equipment, your assets. Be creative. Be passionate about it, but don't forget
(17:16):
to truly account for those costs so that you're either well positioned to scale, or you can truly
decide when this is not the right fit for me. I... I cannot make a go of this. I need to pivot and
try something else. (Tim) You know, I've been to conferences where they'll have a farmer come in,
a very successful farmer. And more often than not, they take time for vaca... family vacations. They
(17:42):
have already calculated what their, um... health going to cost. You know, the health insurance.
What... what they can... what they can provide for their... for their workers. All of that has
to come into... into the play, so you have a good quality of life. (Mallory) Yes! There's so much
passion in agriculture. It's one reason why I... I love working in this space, although I'm no longer
(18:04):
farming myself, but I think we have also let a lot of burnout happen and a lot of, you know, mental
health and stress accumulate because not enough people have prioritized those things you just
talked about. And truly, I try to help farmers see their farm as a business, and that gets you
(18:27):
run out of the room some days. (Tim) Because it's a lifestyle too! (Mallory) Oh, sure! And... and
it's an identity, and it's a passion, but let's also try to treat it as a business so that it does
say... stay sustainable. And... and that's... when you do that, it's more easy to transition
that business to the next generation or another successor. But if we keep everything in the dark,
(18:51):
if we don't have good records, if we have no idea what's really going on financially... well,
that's when we see a lot of farms that don't successfully transition as well. (Tim) You know,
years ago when I was a kid, uh... a older couple were transitioning their... their farm to their...
the daughters and their... and their... and their families. And they made a comment, "Well, we just
(19:13):
did this for fun." You know, it was... it was fun to them. And profits, they probably made them,
but that that wasn't their forefront. (Mallory) That is true. We still see that today. You know,
there were a lot of people that sort of, um... decided to do a big lifestyle change during the
pandemic as well. Right? We... we heard a lot of stories and worked with people that, "Oh,
(19:33):
I'm here from California." Or, "I... I'm... I'm... quit my job in St. Louis so I could retire early.
Now I own this farm in the Ozarks." (Tim) "What do I do?!" (Mallory) Yeah! "What do... I'm excited,
but I don't know where to start." And again, having Intel for Ag was really helpful because we
could help them sort of, "Okay, you've got a lot of options. Here's some questions to work through.
(19:56):
Here's some concepts to consider. Spend some time on the website and then come back to us." Right?
Because there are... the... the right answer about what to do is a complex one that depends on a lot
of personal, but also like the actual production and financial, um... resources. (Tim) Because you
mentioned, 30% of farmers have 10 years or less farming. (Mallory) Yes! Was that number also
(20:22):
surprising? (Tim) Yes! Yes! You think somebody grew up in this, so... so you can enter into
the market. (Mallory) Right! We know there's big barriers. (Tim) Land cost. (Mallory) Yes. Yes,
that's a huge one. Uh... and it's why we have people come to us, and they don't have any land,
and they're super passionate. And they are like, "Yeah, I think I just need to go out and buy 70
(20:44):
acres." Not... no! Not necessarily. You know, let's talk about how you can step into this at
a smaller scale. How can you lease some land? How can you really just... what are you trying to do
with this? And let's maybe start a little bit smaller. (Tim) Yeah, I was surprised. I... I...
I was at one of these conferences, and a person was in a flower farm that they started it more
(21:08):
as a hobby for their kids. Get them something to do. And now that's their full-time business
on about an acre. (Mallory) Yes! (Tim) But it's all marketing. They... they know their markets,
and they also, they sell a lot to florist, and they know what the florists want. (Mallory) Yes!
Yes. (Tim) They did... they've most of... some of it's trial and error, but they've talked to
the florist. (Mallory) And that's a great point. If you're in this space, you have got to talk to
(21:31):
your customer. Farmers' market or if it's another business-to-business, you've got to be making the
rounds. Beating on doors. Having conversations with people to truly figure out in your area,
or if you're going to make the decision that I need to drive 30 miles or 50 miles,
learn about that market and figure out the best way to pivot. (Tim) Because years ago, uh... one
(21:53):
of... one of our retired faculty members started growing blueberries. (Mallory) Oh! (Tim) It was
over the hills and through the woods to get to there, and... and my dad said, "Yeah, it's the
destination." That's why... what... that's why you want to go. You can get blueberries in the
store if you want to, but half of it is driving, making a 30 minute drive and getting to pick your
own. (Mallory) Right. (Tim) That's what you... that's what people want. (Mallory) Right. That's
(22:15):
right. (Tim) And what he did, so he had... he had, uh... his blueberries, then he had Christmas
trees. So you see his Christmas trees growing over there, "Oh, I'm gonna come back!"
(Mallory) Exactly! That's how they get you! I mean, but... but truly, that is the value of... of having land,
and... and you know, we may not... if you grew up on a farm, you may not always perceive that value.
(22:37):
Or you may overlook that value of just being in a rural setting without a lot of traffic, just some
rolling hills, which we've got a lot of that here in Missouri, and it's beautiful! It's absolutely
beautiful. And it really can just reduce people's stress and just, ahhhh! (Tim) Well,
you know when I was a kid, I grew up on a farm, and we'd go camping. We slept in cuz this was our
(23:02):
first time to... that we could sleep in, you know! Where everybody else around us was up at the crack
of dawn! What would I want to do that for? I'm on vacation! But... but we take that for granted,
don't we? (Mallory) We do. (Tim) That other people want to experience that. (Mallory) Mhm. (Tim) You
know, you mentioned sometimes people want to scale up. Now I've heard as a entrepreneur,
you watch Shark Tank and those type of... type of things. It's that scaling up, that's where you can
(23:26):
fall... fall over the cliff, isn't it? (Mallory) Oh, yeah! I mean... (Tim) I mean, you're good
at... good at doing it as a supplemental income, but then trying to get it as your sole income,
that can be issues. (Mallory) Right. So one of the challenges is that as you are trying to scale,
you quickly outpace your labor available to you. And equipment in some of these specialty crop
(23:49):
industries can get very expensive very quickly. So that truly, to be at that scale, you either need
to... to find a custom harvester to work with you, or you need to get big enough that you can justify
and pay for that equipment cost. Because having 10 acres, you may need the same equipment as if
you had 50 or 60 or 70. (Tim) Right. And equipment share could be a a part of this. (Mallory) That's
(24:12):
right. That's right. That's another great reason to always get to know your neighbors if you're
new to... in agriculture or new to farming, find those other entrepreneurial people around you.
They're there. You may just have to look for them a little bit and drive a bit, but that's how you
open up the door to conversations about more, you know, equipment share and leasing. (Tim) And...
(24:33):
and you also talked about talking to other farmers. Are you worried about saturating
a market? (Mallory) Yes... yes. At a very local level. I'll go back to farmers' markets. Farmers'
market managers will turn vendors away when they have too many of the same kind because
they want to see vendors succeed, so each farmers' market can only support so many meat producers.
(24:59):
So many bakers. Vegetables are generally kind of the one area where the more the merrier,
but um... that's one example of market saturation. However, there's so much opportunity
to differentiate yourself in this space. That's why a lot of producers are very transparent and
willing to work with people because they don't see them as competition. They see it as, "Okay,
(25:21):
here's another opportunity to have a space, have a reason to get a customer out here to collaborate
and offer more." (Tim) Well, I even have some friends that... that at the farmers' market,
and they'll say, "I'll grow everything vegetable wise except tomatoes. I'll let the other folks
grow the tomatoes." (Mallory) Yes. Tomatoes are highly seasonal, um... unless you're super...
(25:46):
you're sophisticated enough to grow them in a high tunnel. And if you can, then you can capture a
huge market premium. (Tim) Early! Yes! (Mallory) Yes! It's like, how quick can you get that tomato
to that farmers market? The one that tastes way better than the grocery store. But if you're not
that good at growing tomatoes, and you're only producing them at the height of the summer when
everybody else also has tomatoes... (Tim) Why? (Mallory) Yeah. You might be losing money.
(26:10):
(Tim) Right! Right. Oh, yeah. Well, let's wrap it up for this segment, and we'll talk to you next time.
(Tim Reinbott) Well, welcome! Today we're continuing our interview with Dr. Mallory
Rahe about, um... well, entrepreneurship... (Dr. Mallory Rahe) Yes! (Tim) ...in... in
our agriculture. And they have this wonderful tool called Intel for Ag that's free online,
(26:35):
and you can... and you can use it if you want to try to... if you're getting into a specialty crop,
or you're trying to maybe grow your specialty crop. But also, they can... they have folks that
you can talk to also because you have questions sometimes, you or your... or your staff around the
state can always be helpful talking. (Mallory) Yes, that's right. (Tim) So... so we've talked
(26:57):
about a lot of things last time. Um... one of the things that I had a... had a colleague that sold
at the farmers' market, and she sold vegetables. And she told me, "We don't need more vendors. We
need more customers." And she really wished that there was a way that they could, what they don't
(27:17):
sell on that Wednesday or that Saturday, that they could... that they could market wholesale
to... to somebody. They could take it maybe to St. Louis or to... to... to larger places. Is there
help for that to try to make these connections? (Mallory) Well, it's not so much about helping
them make the right connection because we do see like shifts in markets all the time, but what we
(27:39):
try to help producers do is think through what is the right way to use my surplus? Of the market
channels I have, have I positioned my product well in them? Have I priced it accordingly? Have
I done enough customer research? And then, okay. Now as I grow, as I outgrow some of my markets,
(27:59):
or... or this market is, you know, declining... some of our farmers markets do struggle to attract
enough customers when... especially when they have to relocate, uh... or they get
a new market manager and some policies change, and... there's, you know, lots of reasons. But,
um... what you do with your seconds is a big question because my first question back to her,
(28:24):
it would be, "Can you afford to wholesale?" Let's make sure that we know that answer before you go
out and try to make contact and find somebody to talk to. (Tim) Because you'd be selling it
under... under your production price. (Mallory) Yes.Yes. Or, what price do you need for those seconds?
And that will help us understand what market may be most likely a good fit for you. We do
(28:47):
have produce auctions here in Missouri. That... that may be an avenue. Um... again, it comes
down to that price, however. Because if you need a higher price, then maybe it's time to look at some
value-added processing instead. That's another option. Or maybe you need to find a partnership
with a local restaurant that's not actually paying you a wholesale price because the right type of
(29:13):
restaurant for the right type of product, uh... let's talk about like a specialty heirloom tomato,
they're not going to sell those, you know, by the carton. Uh... they're going to slice those. Put a
few on each plate. It... it... it's a elevated meal, and they're willing to pay an elevated,
not wholesale, price. (Tim) But you need to be able to furnish that for an extended
(29:37):
period of time. (Mallory) That's right. That's right. That's when... so again,
I like to start on price. Let's talk about price and what you know about your customers, and then,
okay, your current market isn't working. We need to go learn about other market opportunities. But
it's not like an easy one-to-one match. It really goes back to how much can you grow? How consistent
(29:58):
are you? What are you willing to do? Are you just competing with everybody, or do you have something
really specialty? And then, what does it look like? What are your value-added opportunities
to throw in the mix? (Tim) Cuz I... one of the very successful growers in Wisconsin told us one
time that of his tomatoes he can't sell, he makes into salsa. (Mallory) Yeah! (Tim) But you better
(30:21):
have a good salsa. (Mallory) You need to have a competitive recipe because there's a million
salsas out there. (Tim) There is! There is! And is there... is there help to figure out where do I go to
get the... the label for it? The... the regulations? Because now you're... you have a... a product
that's going to have a few more regulations to... attached to it. (Mallory) Right. So, uh... I'm not
(30:42):
a food safety expert. (Tim) Oh, sure! (Mallory) We do have a Food Safety Food Science Division here
at Mizzou. (Tim) And they can help. (Mallory) They can help. But I'll say for our Missouri audience,
we don't have a uniform food safety code here, so the best thing to do is start with your local
health department because some... they... they have the ability to set more strict rules than the
(31:05):
state. And then depending on what product you're producing, you're going to want to talk to the
appropriate, um... state agency next. (Tim) But start with your county. (Mallory) Start with the
county. (Tim) That's per... that's... that's... that's great to know. You know, we mentioned
earlier, um... the pandemic. How people wanted to go get out. Go to the countryside. Go and,
(31:26):
but it also has changed, the pandemic, what was starting to be trend just pushed us they
say 15 years into the future. (Mallory) Oh! We have not seen such dramatic shifts in consumer
behavior that quickly in a very long time. And so, what's really been interesting is that it did,
(31:48):
the pandemic pushed a lot of people into buying locally for the very first time. Just like...
just like going to a farm for the first time. Some people were deeply scarred by going into
a local grocery store and not finding food. That was... that was a first in my lifetime
experience. (Tim) Yes! (Mallory) Right? And I think it made people a lot more concerned about,
(32:09):
um... our food supply system and this desire to have strong domestic food, uh... sources,
and... and that puts a spotlight on our local farmers. So a lot of people turned to say,
"Where can I find farmers?" (Tim) Well, and so how our farmers advertise has... makes a
(32:29):
difference too. (Mallory) Absolutely! (Tim) You know, what worked pre-pandemic's not working
now. (Mallory) Well, that's an interesting. You know, we see there's so many trends, also,
in the way that people get information. Right? And um... I think we're in the... we're in a period of
change, and things haven't quite settled out. So we offer classes on marketing in Extension,
(32:55):
and so we're doing a series right now, actually this month. And we were on the... the, um... webinar
with folks a week ago talking about what marketing channels are... work the best for you? And we had
quite a few people who said, "It used to be social media and now, ah! Facebook is so crowded. I make
(33:16):
a post. No one's seeing it like they used to." (Tim) Right. (Mallory) Um... "I'm no longer...
I'm... a lot of my friends are leaving Facebook. I'm not even sure Facebook is good for my
business." Whereas before, Facebook was really what a lot of people treated as their online front door
to their business. And... and so as a business owner, it's so important that you're really honest
(33:40):
with yourself about who is my target customer. Who am I trying to reach? And learning about where
they are. People are over, uh... print newspaper. That came... that... we've seen that time and
time again. There's a lot of producers who are just also flat out scared to spend on marketing,
which made Facebook attractive because it was completely free. (Tim) Right. (Mallory) You know,
(34:04):
these are people who don't even want to pay for a website, for example. But um... there's just...
there's such a shift in sort of what works across different areas of the state. Because, while we
had some people, this was a statewide webinar - we had people from all over. We had people saying,
"Oh, it doesn't work! It doesn't work!" Somebody else said "No, it completely works. Facebook in
(34:25):
my area is like the very best way to reach folks." And that is an example of just how different these
things can happen, uh... based on your target customer. (Tim) And age group! (Mallory) And
age group. And are you trying to sell hyper-local? Do you have online stores? You know, who is your
customer? (Tim) So like, you may have a front at a... at a farmers' market, but... but really
(34:52):
you'd rather have people come out. But you got to have your farmers' market so people know who
you are. (Mallory) Great customer exposure. (Tim) Yes. (Mallory) Yes. (Tim) But... but then there's
more later on. And then of course, that great experience will be spread by word of mouth,
too. (Mallory) Right! Right. But then it's like the extra cost of making sure people have a great
experience when they come on-farm, and not everybody likes to have the public in their
(35:15):
backyard at all hours. Because you may say that you can only come between this hour and this hour,
but once people have your address, they may show up at any time. (Tim) So does the, uh... you know,
the honor system, could that be part of it too, I suppose? (Mallory) Yes! Again, uh... roadside
stands are a very low cost way to... to sell products, but it is the honor system. And you
(35:40):
have to sort of be okay with that, and know that it's just like you-pick-berries. They always say,
"Don't eat the berries." (Tim) Right. (Mallory) But, you know it happens! (Tim) But I have a
friend who's retired from his job, and he's doing you-pick-blueberries, and he's encouraging me,
"Yeah, eat some!" You know, because he wants that experience to be good. If kids come there,
(36:03):
and they drop their bucket, that's okay! (Mallory) Yes, yes. (Tim) You... you... you've got to be
customer oriented. (Mallory) You really do. And some people have the personality for that,
and... and the time and the willingness to manage employees. A lot of our agritourism places, they
really have to staff up during their peak season, and that sometimes pushes a farmer into a brand
(36:24):
new space for the first time. "Oh, shoot! I've got all these high-schoolers that I need to like,
monitor and train and just... (Tim) Well, we have a friend who, uh... in the fall sells
pumpkins. (Mallory) Mhm. (Tim) And his philosophy is, "I'd rather sell them for $4 a piece,
and people can get several because they want to spend about $20... $25 to $30." Whereas, going
(36:46):
to another place, they get to buy two. (Mallory) Sure. (Tim) But... but he may be underselling it
if he really got his return to himself, he's not making anything. (Mallory) Yeah. (Tim) I mean,
there's... you got to look at that way, don't you? (Mallory) He could be using
those pumpkins as the loss leader for his farm. You know, to say, "Okay. Well, they know I have
(37:06):
the cheapest pumpkins in the county. They're going to come here. But then they're also,
I... that's okay with me that I lose a little on my pumpkins because I have a great farm store. I,
you know, I'm selling... I'm selling my beef right there as hamburger patties. I can move
hamburger patties all day long, and before, I had nowhere to sell all this beef." So it's a
win-win. (Tim) So a loss leader is you... you're willing to take a little bit of loss on it to get
(37:30):
your people there. (Mallory) Yes. (Tim) Stores do that, don't they? (Mallory) Of course! They do it
all the time. They're sophisticated. They have a ton of data, and they crunch this stuff all the
time. But the savvy farmer can learn a lot from grocery stores and watching the circular ads. And,
you know, it's like we said a minute ago, once you get somebody on your property, you've got them,
and now you want to keep them there and expose them to as many opportunities as...
(37:55):
as you can. (Tim) So we're right in the middle of the egg pandemic. (Mallory) Yes! (Tim) So,
and we still see some home growers selling their eggs, their brown eggs, for $2.50 to $3. Are they
being... are they missing an opportunity when they could probably triple that price to sell
(38:15):
out? Or... or what? (Mallory) Well, let's go back to who is your target customer. Because
if you are a small egg producer, and you have loyal customers, and these customers have been
good to you, and you don't have to spend a lot of marketing, and it's fairly easy to sell your eggs,
and you have high trust with your customer base, and it's like, they might understand and want to
(38:41):
support a small increase, but if you were going to double your prices, you would lose them all.
Potentially. (Tim) Right. (Mallory) Some people are extremely price sensitive, and they don't want
to... no one wants to feel like they're getting gouged. Right? So I think given what we're seeing,
yes, producers don't want to be... now is not the time to be losing money as an egg producer. Like
(39:07):
there... there's no excuse for that, right? Uh... you're not trying to stay in business. Like this
is the time to make sure you're covering all of your expenses, but you've also got to be sensitive
to who your customers are. And if you truly want a higher price, then maybe you need to shift
markets. Doubling your price or tripling your price to your current customer could just make
them all disappear. (Tim) And you won't get them back. (Mallory) Yes. That's right. (Tim) Because
(39:29):
other people that have went into the egg business will... will take that business. (Mallory) That's
right. (Tim) Just on principle. (Mallory) Right. (Tim) That's just like my brother once mentioned,
uh... the grain farmers were... had... had a great year. And he said, "You know, this might not be
a bad year to give your landlord a little bit extra." (Mallory) Right. (Tim) "Because someday
you're going to be in a tight situation, and he might return the... the favor." (Mallory) Well,
(39:54):
and grain farmers are in that, who are leasing, are right now. And that... that
is exactly right. Customer relationships are so critical. Um... so when you're face
to face with your customer, whoever that is, if it's your landlord or your actual,
um... retail consumer, you've got to really be thinking about that relationship. (Tim) It... it
all boils down to relationships. (Mallory) Yes. (Tim) Whether it's a farmers' market. They're
(40:19):
coming to your... to your... to your farm to... to... to purchase, or even if you're,
uh... selling to someone wholesale, that they know they're getting a good product from...
from what you... you have. (Mallory) Right. Right. (Tim) So, anything else we want to talk about...
about this Intel? I mean, what else do you offer that we haven't touched on? (Mallory) Yeah! So,
(40:40):
um... we haven't really talked about the Business Startup tab, which is another,
um... feature that I've worked a lot on. So this is where, again, we built this website to try to
help people work through their questions at their own pace. And when... and outside of office hours,
right? So like, I'm very willing to answer the phone and answer emails. I get busy though,
(41:03):
too. And so, we had so many people that were interested in starting a farm, and they didn't
know where to start. Or interested in starting a value-added ag business. So on the website,
there are six different portals of tools. The Business Startup is one of those portals, and
from there, you can access, um... a short quiz. We don't collect any emails. We don't... we don't do
(41:26):
anything. It's... it's all anonymous. But answer a few questions in order to cut down the list of
questions to think about, print it off, and then kind of work your way through that what does it
truly take to start a business? From a license and legal perspective, and you know, thinking
about your product and your markets. A lot of the things we've been talking about, we actually have
(41:47):
set up as a checklist for people for the people who really want to be orderly. Now there's also
people who get excited about something, and then the next day they're in business. And
that's... that's good too. (Tim) That's the way I would be. That's the way I would be. And... and my
wife and I are opposites, and she's the one, "No, we're going to go through this thoroughly." Oh,
that's no fun. (Mallory) Yeah. Well, other tools on the website are meant for people like your
(42:10):
wife, who really want to think through, "Okay, I think I want to have an elderberry patch, but what
does it take?" You know, and so we have what we call, um... Management Capabilities Quiz. So it's
just 25 questions. Again, so you know, like no one sees the results except for you, but it helps
somebody think through the different components of these enterprises, so they can assess,
(42:37):
okay. Do I have the labor? Do I have the finances? Do... what's my marketing skill set look like? To
really identify, okay, can I succeed? Again, this isn't crystal ball, but it's to help guide people
towards, okay. Here's an area of weakness. Maybe it is marketing. Or maybe it's really my land
(42:58):
availability. We have a different tool here that, um... produces Land Suitability Maps by different
crops. (Tim) Oh, wow. (Mallory) So you just do the drop down, pick the crop you want, and it
pulls up a map of Missouri and shows suitability for that crop across the state. You're the...
the production guy, the agronomist, right? (Tim) Right. (Mallory) Like, that's when I say, "Hey,
(43:21):
talk to the agronomist." But just because you want to do it, doesn't mean you can. (Tim) Well,
you know, growing up in the Bootheel, we had pecan trees. And I, moving up here and this...
these soils, I wanted pecan trees! And the forestry folks said they don't do well up here. But
I'm growing one anyway! I've harvested like zero pecans off my place because they were right!
(43:47):
Because, you know, there's... there's reasons. (Mallory) Right. (Tim) So... so there's... so we
have to do our homework. (Mallory) Right. Right. And... and that's what this tool is meant to do.
It's to help people kind of do their homework, to kind of reflect on, you know, themselves,
their land, their markets, and... and be more informed as they're looking to get in
this space or expand. (Tim) And is... is it just for growing something? Or could people
(44:11):
make something? (Mallory) Well, um... that's an interesting question. I think we really tailor
this towards farms. (Tim) Okay. (Mallory) So, yes. I'm going to stick with farms. (Tim) Okay,
yeah. You're... you're... you're... if... and if you're making something, it's with the pro...
produce that you've grown. (Mallory) Yes. Now, our Break Even Tool, um... which helps people kind of
(44:34):
identify all the costs of the product they're producing so they're selling it appropriately
to cover those costs, this is really useful for that grower who is buying from someone else and,
you know, pulling ingredients in. Or I... I like to tell people when they're working on that,
if they don't know how to price their tomatoes, for example, for their salsa very well, you know,
(44:56):
look at what it would cost you to buy that tomato from someone else. And sometimes,
you're better off not growing that tomato. (Tim) Right! (Mallory) Grow cucumbers. Grow pumpkins.
Do something else. But if you have a killer salsa recipe that just really sells, find a good grower
and let them grow that tomato for you. (Tim) Because you may need a specific tomato to make
(45:19):
it... (Mallory) Yes. (Tim) ...really be the way it's supposed to be. (Mallory) Right. (Tim) And
earlier you mentioned the produce auctions. Now that's... that is your
ultimate wholesale. (Mallory) Well, it's... I would call it a more accessible wholesale. Like,
we have large, terminal, wholesale markets in the United States. The closest one here is in Chicago.
That's for super big farmers, right? Our... most... most specialty crop farmers in our state
(45:44):
are not going to go to those terminal markets. (Tim) No. (Mallory) So I see our produce auctions
as a great middle ground because they are... they operate, um... you can find all of them online. We
have a link to it from our website, trying to help raise awareness. And... and truly like any market,
you need to learn more before you just sign up and... and do it. So I've visited some of these,
(46:07):
and they're fascinating transactions! And you can buy just one or two sometimes of hang... like one
or two hanging baskets, and then they're going to sell the entire rack. Right? (Tim) Right.
(Mallory) Um... and... and that is a great place to just educate yourself on, okay. What is the
wholesale price? Recognizing that these prices are highly seasonal. So there's just a lot of
(46:33):
work that you need to do in the price discovery area if you really want to succeed. (Tim) And
do you all have that... that... that data, like that price of that hanging basket in April versus
mid-April versus May? (Mallory) Well, it's interesting you brought that up because we're
trying to work on it. But a lot of our auctions in Missouri record everything by hand, and so there's
(46:55):
not an easy way to digitize that. Um... so what we've done is we've taken the USDA federal data,
like the... the... the ag marketing service reports from the 11 large terminal markets. We do,
um... we make that more accessible to growers, and we have a dashboard for that. And working with
(47:18):
producers since we put that data up, we found that producers were already using that in some cases,
which we were excited to hear! And when we ask them, "How are you using it?" They say,
"Oh! Well, I look at that and then I either double or triple it in order to set my price." (Tim) Oh,
really? (Mallory) Because they know that those are prices that a large farm at a tremendous scale,
(47:39):
and if you look at those prices too, you can gauge seasonality over the time. And I... I just had a
grower ask me for that information. I just pulled it for him. He's looking to go into blueberries,
and he said, "Hey, can you show me? What was the... what was the price today?" And I was like,
"Well, this isn't really applicable. You wouldn't be selling blueberries today in future years."
But you go to the Chicago market and, yeah. It was quoting prices for blueberries from
(48:02):
Chile and Peru. (Tim) Oh, wow. (Mallory) So as a local grower in Missouri, you don't want
to base your blueberry prices off of the prices of a producer in Chile and Purdue... Peru make,
right? (Tim) Right. (Mallory) Like, that just does not make sense. (Tim) So is your
you-pick, let's say I'm talking about blueberries, is that then your ultimate, uh... retail then?
The... the you-pick? Because they... I would think they'd pay a little bit more because
(48:25):
they're getting experience, and they're getting a fresh product, and they probably get to see the
grower. (Mallory) Yes. Yes. And that's a great way to, um... one advantage of you-pick is you don't
have to have the labor. Right? You're basically outsourcing the labor to your customer, and you're
charging them a premium for the experience. Um... (Tim) I love that! (Mallory) However,
you have to be willing to like, let them go through the orchard and do things wrong,
(48:48):
and pick... pick blueberries that maybe weren't ready and... and eat a bunch and knock some off
and spill back... buckets and all of that. I think the ultimate for a blueberry grower would be in
the value-added space though. (Tim) Oh, really? (Mallory) Yeah. (Tim) To sell, maybe you have
a bakery there! (Mallory) Yeah! (Tim) So maybe you have your... you come to my farm for this,
this, and this, and we have blueberry muffins. (Mallory) There you go! And on a... on a per
(49:12):
blueberry basis, you should be getting the highest price at that level, but you-pick is a great way
to move more blueberries. (Tim) But that's just a way... that's just probably the evolution of
your... of... (Mallory) Yes! (Tim) You start with a few products, and then you start going more and
more. (Mallory) Producers have to stay nimble. The customer is changing. Uh... the competition is
(49:33):
changing. Uh... you... you got to try things, and you've got to learn and adapt. Take good records,
reflect, and keep changing. (Tim) And maybe your customer... let's say you're selling to
a restaurant that only has local foods, having that relationship with them is important too,
isn't it? (Mallory) Absolutely! (Tim) Where you can get a premium, whether it's that tomato that
(49:54):
they want for their slices, or if it's the... the meat product. (Mallory) Yes. (Tim) And... and...
and they, because I know they'll often say, "This is from X and X farm." (Mallory) Right!
They're... they want to be transparent about that because they know their customer values
that. (Tim) Right. And then that... then if you're that farm, you're... you're probably selling to
(50:15):
direct farm... direct too on your farm? (Mallory) You could be. Um... again, it... it... it goes
back to sort of your what... how much product are you trying to move? (Tim) Sure. You know, Tim.
I got all excited! Now I want more and more and more! (Mallory) But every market you go into has
a different set of costs, and it... and it takes time. It all takes time and energy to maintain
(50:36):
and market and... yeah. (Tim) All right. Well, this has been fantastic! Now I'm ready to retire
from this and start my own farm again! So... (Mallory) Just please go to Intel for Ag first,
Tim, and do some due diligence. (Tim) I'll get my wife to do that, and she... and then she can tell
me what to do. (Mallory) Okay! [laughing] (Tim) Well, thank you so much. Is there anything that
you want to add right before we leave? (Mallory) No. Thank you so much! (Tim) All right. Well,
(50:58):
this has been it for Tim's Take. We had a great time. And... and before you start on a... on a
entrepreneur project, check out Intel for Ag. They can solve a lot of your issues before we
start. We'll see you next time from Tim's Take. That was fun! (Mallory) That was fun!
[♫]
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