Tell a Tale Farm May 25, 2024 Phil Prevosto 1030 Boardman Hill Road Rutland, VT 05777 Prepared For: Phil Prevosto with Assistance from Mike Ghia, UVM Extension Farm Business Planner, with funding provided by UVM Extension through a grant from the Vermont Farm Viability Enhancement Program Additional Technical Assistance Provided by Mara Hearst Table of Contents Section Page Executive Summary 1 Financial Summary 1 Farm Description Location, Description, Products and History 1 Farm Infrastructure and Landbase 1 Farm Markets 2 Analysis Management Analysis, “SWOT” Analysis, Risk Assessment 2 Market Analysis 4 Planning and Implementation with Timeline 6 Capital Requirements 7 Appendix A: Financial Statements Balance Sheet-January 2023 Balance Sheet-January 2024 Income Statement- 2023 Cash Flow Statements and Projections Scorecards Family Living Budget Sheet Appendix B: Natoora Crop Planning Farm Locator Map Executive Summary Tell a Tale Farm is a small, diversified vegetable and herb farm using organic practices, owned and operated by Phil Prevosto. This is a young, start-up operation, currently on leased land scattered in Rutland County, VT. Phil has identified markets and crops that will allow him to rapidly grow his business. The farm will be moving in the direction of more crop specialization and a large shift from relying primarily on local retail markets to primarily wholesale markets, mainly out-of-state. The purpose of this plan is to provide for this ambitious growth with a thoughtful approach. The longer-term plan is for continued growth that will facilitate the ability of Phil to purchase farm real estate to allow for more security, infrastructure development, and efficiency. Financial Summary 2023 represented only the second year in business for Tell a Tale Farm. 2023 will be remembered for its continuous rain and flooding. While the farm did not receive any flooding, between 50- 70% of the crops were lost due rain-borne diseases and water-logged soils. Despite these extreme challenges, Phil was able to produce about $70,000 in crops from approximately 2 acres, and was modestly profitable for the year. In 2023, the operation ended with a profit, with an accrual adjusted Net Farm Income from Operations of $33,937. The farm had an Operating Profit Margin of 4%, the Return on Farm Assets (ROA) was 9% and the Return on Equity (ROE) was 9%. Total Farm Asset are 37,250, Farm Liabilities $0, and Farm Net Worth of $37,250. Further detail is provided in the Planning Section and the Financial Worksheets in Appendix A. Farm Description Farm Structure, Location, Description, Products, and History: Founded in 2022, Tell a Tale Farm is a sole proprietorship. Prior to starting his own operation, Phil studied agriculture at Green Mountain College, and also worked for other vegetable and fruit farmers in the region. Tell a Tale farm is a small, diversified farm growing bedding plants, mixed vegetables, herbs and fruit using organic practices. The farm specializes in bagged and bunched greens, ginger, tumeric, winter squash, watermelons and heirloom tomatoes. The farm is currently based at the Boardman Hill Farm on Boarman Hill Road in Rutland Town where Phil currently also lives. Infrastructure and Land Base: In 2022 and 2023, the farm consisted of 2 leased acres, one acre at Boardman Hill Farm, and another acre at another farm along Creek Road above the flood plain of the Otter Creek in Rutland Town. In 2024, the farm will also expand to a 3 acre site in Shrewsbury. At Boardman Hill Farm, Phil has access to some shared equipment and facilities. On Creek Road, he leases two high tunnels and also utilizes a caterpillar tunnel. In Shrewsbury, he also has access to a tractor, wash and pack and cold storage. Markets: Tell-a-Tale markets through diverse retail and wholesale channels. These include the Rutland Farmers Market, the Rutland Area Food Co-Op, and the VFFC Farmacy Project. In 2024, the farm will begin to shift to predominantly wholesale and food service markets. This will include dropping the local CSA for 2024 and bedding plant market for 2025 to focus more on wholesale. The biggest market change for 2024 is that Tell a Tale has contracted to provide a variety of crops to NATOORA a distributor serving New York City. See Marketing section below for a detailed description of the market outlets and the plans for 2024. Management Analysis and Risk Management SWOT Analysis Strengths: customer support and relations education and work background in organic farming greens production young age and able bodied work ethic community engagement diverse products ginger + turmeric repeat customers vision leadership/ crew management Weaknesses: housing long term land security lack of capital organization, particularly around paperwork and record-keeping lack of labor lack of reliable transportation work-life balance reliance on one market (Natoora)for half of sales, making vulnerable lack of equipment lack of infrastructure lack of website Opportunities: aging vegetable and fruit grower population product availability that customers can’t find from other growers Ludlow, Killington, Woodstock, and Rutland Restaurants. roadside visibility on Rutland plot a gap in the Rutland County organic fruit and veg scene being an anchor tenant for the Rutland farmer’s market winter greens production smaller wholesale contracts with food processors. contracted for the 2024 growing season to supply Rutland Area Food CO-OP with all their bedding plants for plant sales aprox $8,000-$12,000 one of the youngest Farmers in Rutland County (age 25) Natoora market Value-added ginger and turmeric Threats: weather deer lack of insurance health—complete reliance on one person to run the operation land and housing insecurity Phil is solely responsible for the management of the farm. He has also been the primary source of labor. In 2024, to facilitate significant growth in the business, the budget includes 4 full time employees from May-October and 2 employees in November. One of Phil’s key objectives in participating in the Farm Viability Program is to help him become more organized and to help him improve his record-keeping and other systems. Towards this end, Technical Assistance funds from the Farm Viability Program were used to hire Quickbooks Pro, Mara Hearst, to help Phil set up Quickbooks and train him how to use it. Mara will continue to assist Phil as he becomes accustomed to using it. Phil has also acquired a file cabinet for records and has learned how to put Excel to use for records as well. Phil now dedicates 3 hours per week towards office management. Phil will be adding farm insurance in 2024. As a part of the plan, Phil is adding acreage and also adding equipment to allow him to facilitate significant growth and efficiency in the business. A very large portion of the growth that the business will come from just one market, Natoora, which will represent just over half of projected sales for 2024. Somewhat off-setting the risk of being so heavily reliant on one market is the fact that a large portion of the sales will be of greens and other short-term crops. If the Natoora market becomes unreliable or unavailable, Phill will have some ability to pivot to other markets or other crops. In the worst case, Phill will be able to plow in these short-term crops and then cut back on his biggest expense, labor. Phil will be looking at continuing to diversify his markets as he continues to grow the business. Growing consumer interest in turmeric and ginger for their health benefits also offers opportunities for significant expansion of the production of these crops. Phil also sees possibilities to produce value-added products using these crops to further increase income and marketing opportunities. Natural Resource Mgmt. Analysis: Phil is dedicated to an ecologically sensitive approach to agriculture. The farm is also small in size allowing for close management of natural resources. Phil has been working with Becky Maden at UVM Extension on nutrient management. At this point, there are no identified natural resource concerns. Market Analysis & 2024 Sales Projections NATOORA$118,398 Project Sales- In 2024 Tell A Tale Farm will take on NATOORA as a primary wholesale account. NATOORA is a food aggregate located in Brooklyn, NY that supplies high end restaurants throughout New York City and surrounding boroughs. Tell A Tale Farm has been contracted out to grow Pea Shoots, Asian Greens, Agretti, Sauce Tomatoes, Italian Beans, Basil, Romanesco Squash, and Baby Butternuts. Those are crops that have been locked in and quantities and prices have already been set. Along with those crops NATOORA has also expressed interest to be updated weekly on other available crops with possibilities of purchase, so total sales could increase. The relationship was developed in the fall of 2023 with a cold call to the company and a sample package dropped off to their office in Brooklyn. After the cold call, Phil learned that a fellow Green Mountain College Alumni is in charge of NorthEast purchasing. Phil is now further building the relationship with NATOORA through this alumni relationship. Tell A Tale Farm is distributing to NATOORA using Myers Produce dropping off at their Hatfield, MA location. According to NATOORA, they are starting Tell A Tale Farm with a “small” contract for the 2024 season to see how the relationship works. The plan is to be able to supply them the highest quality product throughout 2024 and be as flexible as possible so that the relationship develops into a long term situation where we would see an increase of sales come 2025, 2026, 2027, etc. VFFC FARMACY PROGRAM $8,000 Projected Sales- The FARMACY program is a farm collective CSA model program serving 250 families in Rutland County. Tell A Tale Farm has been a part of the program since 2022 giving us our first experience in the wholesale quantity, quality, and marketing aspects of the business. In 2024 Tell A Tale Farm will primarily grow greens, watermelon, cucumbers, and ginger for the Farmacy Program. The farm will increase sales for Farmacy from $6,147 to $8,000 by increasing the number of weekly deliveries and increasing our quantity availability to Farmacy. FINAILLIE FERMENTS $3920 Projected Sales- FINAILLIE FERMENTS is a Vermont food producer based in Brattleboro, VT focusing on fermented foods, primarily pickles, kimchi, and sauerkraut. Tell A Tale Farm developed the relationship in the fall of 2023 after producing an excess of Daikon Radishes and Carrots. The relationship started from a cold call ( a direct message on instagram with photos of the daikons). In 2024 FINALLIE FERMENTS committed to buying daikon radishes, cucumbers, carrots, garlic, ginger, and turmeric. DIVIDED SKY FOUNDATION $10,830 Projected Sales- The Divided Sky Foundation is a drug rehab facility located in Ludlow, VT located 18 minutes from Tell A Tale Farm’s wash pack station. This relationship was developed in the fall of 2023 after a farmers market interaction with the head of dining at Divide Sky. There were 2 deliveries in the fall of 23. Divided Sky has committed to Tell A Tale Farm for all of their loose and bunched greens, tomatoes, summer squash, and zucchini for the 2024 season. VT FARM CATERING $11,580 Project Sales- VT FARM CATERING is farm to table based catering service based in Pittsfield, VT. This relationship was developed in the fall of 2023 also from a farmers market encounter with VT Catering. They were impressed with the quality, variety, and availability of the farm’s crops deep into winter. Tell A Tale Farm supplied greens and winter squash for a Christmas catering event put on by them. VT Farm Catering has committed to using Tell A Tale Farm as their main supply for greens, tomatoes, and other seasonal produce. CSA Projected Sales $0- Tell A Tale Farm will not continue with our weekly CSA. Instead the farm will offer a prepay debit system that can be used at the stand on Saturdays at the Rutland Farmers Market. This will free up more time throughout the week so that the farm can focus more on wholesale production and field maintenance. Phil might explore the idea of re-establishing a CSA in the future but wants to wait until Tell A Tale Farm has long term land security. RAFC Projected Sales $17,000- RAFC is the Rutland Area Food Co-op located in downtown Rutland, VT. RAFC was one of Tell A Tale Farms first customers and has grown to be a reliable source of marketing and community engagement. In 2023 the farm solidified its place in RAFC as being a primary supplier of bagged and bunched greens, along with some other specialty crops; watermelon, asian greens, ginger, turmeric, and winter squash. The farm did $10,000 in sales in 2023 to RAFC. Numbers would have been higher if it were not for significant crop loss due to the rain and floods. RUTLAND FARMERS MARKET Projected Sales $51,000- Tell A Tale Farm has been a part of the Rutland Farmers Market located in Depot Park in downtown Rutland since 2022. During the first year at market with a single booth, the farm did $21,000 in sales. It was the first year in production and Phil was farming a little under an acre. In 2023 the farm added another booth at the market giving it a larger presence and increased sales to $31,701 with had 2 acres of production. In 2022 there was only one Saturday market get rain. In 2023, there were 13 Saturdays with torrential downpours resulting in an overall decline of market sales for everybody. But at the same time, in 2023 with the larger presence at market and attending the indoor winter farmers market, Tell A Tale Farm is now recognized as an anchor farm at the market and the reliable stand with all bagged and bunched greens needs. Not only is Tell a Tale the only farm at market with the most reliable greens production, the farm is also known for watermelons, asian greens production, heirloom italian varieties, and exotics like ginger and turmeric. Increasing production in 2024 combined with all of the marketing work done throughout the fall/winter will increase sales. Being the young farmer in the area and being able to introduce customers to new produce and educate them has and will continue to increase customer return and create a loyal following. BEDDING PLANTS Projected Sales $12,000- In 2023 Tell A Tale Farm started renting out a heated greenhouse space for seedling production. To cover the cost of propane the farm started selling bedding plants at the Rutland Farmers Market and through an online marketplace. It turned out to be very good business and of high demand for the area. Being only 1 of 2 farms that are selling bedding plants at the farmers market, the farm sold out of inventory ahead of schedule. In 2024 Tell A Tale Farm will increase production of seedlings to sell through the Rutland Farmers Market, Online Marketplace, and as the sole supplier for the RAFC who’s previous bedding plant supplier has retired. Bedding plant production will end in 2024 as we are being spread to thin and need any greenhouse space for our own crops. The farm will focus on increase greens production to make up for the lack of bedding plants sales. POTENTIAL 2025 MARKETS Green Markets in NYC. Tell A Tale Farm has been applying to markets in NYC where we try to do 2 markets a week in the city. With conversations with other growers from the area that did these markets they said it was a regular $8000 day on a slow day. With potential sales numbers like that we would drop our local farmers markets and focus just on our wholesale production and production for NYC markets. We would specialize in leafy greens, heirloom tomatoes, asian and italian speciality greens, garlic, fresh ginger, and turmeric. We will also bring with us other local products to showcase VT agriculture, i.e. VT maple, ramps, fiddleheads, grass-fed beef, and flowers. Our ability to be in a cooler growing environment then most of the other farms that are located in NJ, PA, and southern NY, gives us the ability to produce cooler loving crops at parts of the year when the other warmer farms are not able to produce them. We would aim to be at NYC markets from Easter Weekend- Thanksgiving. Planning and Implementation Increasing Sales Primarily through Wholesale and Food Service Markets: As described in the Marketing Section, the farm intends to grow from $68,000 in sales in 2023 to about $233,000 in sales in 2024 primarily fueled by new wholesale and food services markets. Expecting to be successful in this effort, the plan for 2025 and beyond will be to further increase production and sales, building on what is achieved in 2024. The plan is to also look for other wholesale markets to maintain a diversified market and not be too heavily reliant on one buyer. End the CSA and Bedding Plant Sales: Reprioritizing to the wholesale markets, the CSA will be dropped for 2024, and Bedding Plant Sales will be ended for 2025. This will allow for more time and greenhouse and field space for crops for the wholesale markets. Add land in Shrewsbury: Phil is friends with the farmers at Alchemy Gardens in Shrewsbury who have decided to cease farming and have offered access to the land, infrastructure and a tractor at their site. This will allow Tell a Tale to grow from 2 acres to 5 acres in 2024. Add Hired Labor: In the first year of the farm, Phil did all of the work himself. In his second year (2023), he did most all of the labor, only utilizing some casual labor. In order to triple the size of the business in 2024, hired labor will be critical. 4 full-time laborers have been budgeted for 2024. Increase Turmeric and Ginger Production and Add Value-Added Products: Both turmeric and ginger are experiencing increasing consumer interest due to reported health benefits. They are also relatively new crops for Northeast growers. Phil has demonstrated success in growing and selling both crops. He will continue to scale up both crops. In the future, when he has access to proper facilities, he would like to add value-added products using these crops such as infused honey and maple candied ginger. Further exploration of these opportunities will continue during Year 2 of the Viability Program enrollment. Capitalization Requirements and Time Table: Below is a list of the capital requirements projected for the next three years. In the spring of 2024, Phil successfully applied to the VT Farm Fund for a loan for the BCS Tractor and low tunnels. The payments on this loan are in the projections. The projections also include an estimate of the payments for an FSA loan to cover the remainder of the 2024 capital needs. Additionally, in the spring of 2024, Natoora gave Phil a $9000 grant, $3800 of which was used to purchase the basket weeders and additional low tunnel, with the remainder used for operating capital. PURCHASE COST IDEAL YEAR CUB TRACTOR $3,000 2024 TWO WHEEL BCS TRACTOR $10,000 2024 BASKET WEEDER $1,445 2024 TILMOUR POWER OX $2,950 2024 FINGER WEEDER $2,274 2024 TORISON WEEDER $1,044 2024 3 FARMERS FRIEND TUNNEL 16X100 $14,676 2024 MARKET VAN $10,000 2024 $45,389 30x140 Greenhouse $31,744 TBD Farm Property $200-500k 2025 60+HP Tractor with Bucket $20-30k 2025 Water Wheel Transplanter $4,000 2026 Manure Spreader $3,000 2026 Appendix A Appendix B NATOORA AGREEMENT Product Format / case 2024 price Agretti (Bunch) BU/ LB? $12.00 San Marzano Tomatoes LB $3.00 Beans, Romano - Green LB $3.50 Beans, Romano - Yellow LB $3.50 Beans, Yellow Wax LB $3.50 English Peas $3.90 Fava Leaves BU/ LB ? $11.00 Fava Beans LB $3.50 Pea Shoots LB $10.00 Zucchini, Gold Bar LB $2.00 Zucchini - Costata Romanesca LB $2.00 Bunched Greens - Asian (Mizuna Red / Green) LB $9.00 Pepper – Leibesapfel LB $3.00 Peppers, Jimmy Nardello "Yellow" LB $3.00 Basil, Genovese (Bunch) LB $8.00 Onions, Fresh - Tropea LB $1.90 Peppers, Habanada LB $3.00 Winter Squash, 898 LB $1.50 Fiddleheads LB $12.00 Ramps LB $10.00 Note: This is a portion of a larger crop planning spreadsheet which lays out by week, the expected units that will purchased by NATOORA of each crop. This is being used as a guide for both a planting schedule and also for cash flow.