Disclaimer: I full acknowledge that categorizing farms into three bins is a gross oversimplification. Nonetheless, I think it is an interesting exercise.
With two plus year under my belt at farming, and lots of experience meeting and working with other farmers, I've started to see a pattern emerging: family farms fit into three broad economic categories. The categorization of the farm might not be obvious at first glance to the outside observer/random farmers market shopper, but it's very important to the perceived and actual success of the farm. Without further ado, the three categories:
1. Old Money: These are the farms that have been passed down through family lines through generations. They tend to be on the larger side, and often go through many conversions over time to meet market demand. In this area, most of these older farms started off as dairies. A key difference from the other farms on this list is that these farmers didn't necessarily CHOOSE to be farmers, they just grew up in farming and stayed with it. The obvious advantage of these farms is that they are completely paid for and have lots of existing infrastructure. The family is used to the hard work of farming. Some of these farms are moving into a more direct market approach, while others have been doing direct marketing a long time through agro-tourism (eg pumpkin patches/corn mazes). In general, most of these farms are not my direct competition, because they're engaged in very different markets (eg. wholesale potatoes or berries). When these farms are in competition with me, they have the advantage of lower land/barn costs but may not necessarily be able/willing to try radically new things to meet market demand.
2. New Money: These farms are the ones I most often interact with. They are usually run by middle aged folks who have made a fair bit of money in their careers and decide to quit their jobs and buy a farm. They may put up a facade of amazing success, but be losing (potentially large amounts) of money behind the scenes. Like the old money, they have the advantage of reduced operating expenses if they're able to afford the land/infrastructure outright. These farms can further diverge into the (a) huge hobby farm that runs at a loss and is supported by savings/retirement/investments/other jobs, (b) farm that barely scrapes by and ends up putting farmers into near or actual poverty, (c) successful (not sure I've seen an example of this yet), or (d) failure/bankruptcy/etc. I don't have a problem with this type of farm for the most part, as I think it's admirable and understandable that people that have had success in other facets of life want to make their life more meaningful through farming. My only beef is when those that prop up their farm with other money end up as my competition, because that's not a level playing field and can end up driving down prices.
3. No money: These are your farms most often started by younger folks who are attracted to the idea of farming (often just like the new money farmers) but don't have the savings. They often start off by interning/apprenticing for a few years, move to leasing land, and then perhaps buy some land. Unlike the other two types of farms, land and infrastructure costs are a huge burden because they can't afford to own anything outright and have to either buy things on credit or make do with paying rent. Pretty much all of these farms take a direct marketing approach, as they can't afford enough land and equipment to make wholesaling work out. Some of the more successful no money farmers in this area started 20 or more years ago and have managed to make it work though a combination of good luck, relationships with land trusts (free land), and by building a brand and reputation over time in a market that wasn't as saturated as it is today, and of course high amounts of skill. These days, it's very rare for a true no-money farm to grow and become successful. There will almost always be another source of money behind the scenes (family, second job with high wages, etc).
So what's the point of this kind of characterization? Well, for one, I like to think about where I fit within this and how it affects my ability to compete and grow. As a no money farmer, it seems to me to be a losing proposition to try and compete with other farms in the new and old money category, because I'm never going to be able to produce the same food at the same cost as them. Rather, I have to figure out a way to emulate the success stories of the no money farmers. In general, I think that involves finding a niche where there is no competition and growing from there. Right now, I haven't found that niche. I'm not convinced I will, either, but I'm not ready to give up yet.
1. Old Money: These are the farms that have been passed down through family lines through generations. They tend to be on the larger side, and often go through many conversions over time to meet market demand. In this area, most of these older farms started off as dairies. A key difference from the other farms on this list is that these farmers didn't necessarily CHOOSE to be farmers, they just grew up in farming and stayed with it. The obvious advantage of these farms is that they are completely paid for and have lots of existing infrastructure. The family is used to the hard work of farming. Some of these farms are moving into a more direct market approach, while others have been doing direct marketing a long time through agro-tourism (eg pumpkin patches/corn mazes). In general, most of these farms are not my direct competition, because they're engaged in very different markets (eg. wholesale potatoes or berries). When these farms are in competition with me, they have the advantage of lower land/barn costs but may not necessarily be able/willing to try radically new things to meet market demand.
2. New Money: These farms are the ones I most often interact with. They are usually run by middle aged folks who have made a fair bit of money in their careers and decide to quit their jobs and buy a farm. They may put up a facade of amazing success, but be losing (potentially large amounts) of money behind the scenes. Like the old money, they have the advantage of reduced operating expenses if they're able to afford the land/infrastructure outright. These farms can further diverge into the (a) huge hobby farm that runs at a loss and is supported by savings/retirement/investments/other jobs, (b) farm that barely scrapes by and ends up putting farmers into near or actual poverty, (c) successful (not sure I've seen an example of this yet), or (d) failure/bankruptcy/etc. I don't have a problem with this type of farm for the most part, as I think it's admirable and understandable that people that have had success in other facets of life want to make their life more meaningful through farming. My only beef is when those that prop up their farm with other money end up as my competition, because that's not a level playing field and can end up driving down prices.
3. No money: These are your farms most often started by younger folks who are attracted to the idea of farming (often just like the new money farmers) but don't have the savings. They often start off by interning/apprenticing for a few years, move to leasing land, and then perhaps buy some land. Unlike the other two types of farms, land and infrastructure costs are a huge burden because they can't afford to own anything outright and have to either buy things on credit or make do with paying rent. Pretty much all of these farms take a direct marketing approach, as they can't afford enough land and equipment to make wholesaling work out. Some of the more successful no money farmers in this area started 20 or more years ago and have managed to make it work though a combination of good luck, relationships with land trusts (free land), and by building a brand and reputation over time in a market that wasn't as saturated as it is today, and of course high amounts of skill. These days, it's very rare for a true no-money farm to grow and become successful. There will almost always be another source of money behind the scenes (family, second job with high wages, etc).
So what's the point of this kind of characterization? Well, for one, I like to think about where I fit within this and how it affects my ability to compete and grow. As a no money farmer, it seems to me to be a losing proposition to try and compete with other farms in the new and old money category, because I'm never going to be able to produce the same food at the same cost as them. Rather, I have to figure out a way to emulate the success stories of the no money farmers. In general, I think that involves finding a niche where there is no competition and growing from there. Right now, I haven't found that niche. I'm not convinced I will, either, but I'm not ready to give up yet.
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