Leaping Bear Farm April 26, 2023 Justin Bramhill and Vanessa Rose 153 Plowden Road Putney, VT 05346 https://www.leapingbearfarm.com/ Prepared For: Justin Bramhill and Vanessa Rose 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 2 Table of Contents Section Page Executive Summary 1 Financial Summary 1 Farm Description Location, Description, Products and History 1 Farm Infrastructure and Landbase 2 Farm Markets 2 Analysis Management Analysis, “SWOT” Analysis, Risk Assessment 2 Market Analysis 4 Planning and Implementation with Timeline 5 Capital Requirements 6 Appendix A Financial Statements Balance Sheet-January 2020 Balance Sheet-January 2023 Income Statement- 2022 Cash Flow Statements and Projections Scorecards Family Living Budget Sheet Appendix B: Farm Locator Map 1 Executive Summary Leaping Bear Farm is a small, organic poultry and microgreens farm located on leased land in Putney and Westminster, VT, owned and operated by Justin Bramhill and Vanessa Rose. Founded in 2019, the focus of the farm is organic broiler chickens and eggs. The farm sells whole chickens as well as parts, and also produces a chicken broth from less marketable chicken parts. The microgreens business provides supplementary income mainly in the winter months, but is quite profitable at its current scale. Markets are both wholesale and retail as well as to restaurants. The farm is currently a part time business, and not yet profitable. But both Justin and Vanessa would like the farm to be profitable, and to replace their off-farm income with income from the farm and make their full living farming. Eventually, Justin and Vanessa would like to own their own farm property. Substantial growth will be needed to achieve these goals. The purpose of this plan is to facilitate modest growth to begin to scale up the farm in the direction of the size and scale that it will need to be in order to accomplish this. By the end of 2023, the farm will be modestly profitable and positioned for further growth. Financial Summary The current finances of the farm reflect that the farm is very much still in a start-up phase. The farm has not yet achieved profitability, a circumstance that this plan aims to change. Justin and Vanessa support themselves from off-farm income. In 2022, the operation ended in a loss, with an accrual adjusted Net Farm Income from Operations of -$11,722. The operation had an Operating Profit Margin of -109%, the Return on Farm Assets (ROA) was -105% and the Return on Equity (ROE) was -267% in 2022. Total Farm Asset are $52,919, Farm Liabilities $29,244, and Farm Net Worth of $23,675. Further detail is provided in the Planning Section and the Financial Worksheets in Appendix A. Farm Description Farm Structure, Location, Description, Products, and History: Leaping Bear Farm started in 2019 as a sole proprietorship under Justin’s ownership. However, at the time of writing this plan, Justin and Vanessa have recently created an LLC-partnership and are currently working with an attorney on an operating agreement, and development of capital accounts. The main farmstead is located on a rented farm on Plowden Road in Putney, VT where the couple lives, and Justin also works as a caretaker. However, since there is a limited land base at the Putney farm, starting in 2023, Leaping Bear will also be leasing a field from another organic farmer in Westminster, VT where most of the poultry will be raised during the growing season. Leaping Bear Farm was started with a focus on pasture raised and organically fed whole chickens and eggs, which are now certified organic. Justin added microgreens towards the end of the first season as a way to grow fresh produce through the winter. In 2 June 2019, he started vending at the Putney Farmers Market and has been there ever since. Justin and Vanessa met at the start of the 2021 growing season and have been working together to develop Leaping Bear Farm into a sustainable business. Vanessa’s design experience enabled them to create a custom logo, revamp their online presence and packaging and create an inviting farmers market booth. In 2022, they also added homemade canned chicken bone broth utilizing their chicken backs and necks, which has quickly become a top seller. They are planning to raise 1600+ broilers and have a flock of 600 layers this season. Infrastructure and Land Base: The farm in Putney offers between 6-8 acres of pasture, in addition to a barn where broiler chicks can be brooded, and a high tunnel where layers can be overwintered. A small portable shed is currently utilized for the microgreens operation. In 2023, Leaping Bear will begin to lease an additional 7 acres from High Meadows Organic Farm nearby in Westminster, VT. As a part of this plan, they will be purchasing new portable housing for both layers and broilers to facilitate the expansion of both of those operations. Through 2022, all of the meat chickens were processed at Sweet Pickins Farm in Putney. However, as of 2023, Sweet Pickins is no longer interested in processing old spent laying hens, and are also limiting the amount of broilers that can be processed. This necessitates that Leaping Bear start looking for alternatives. They are currently looking at building their own on-site processing facility, and this idea will be developed further during Year 2 of the Farm Viability planning process. Currently, the broth is produced and canned in their home kitchen. However, in 2023,sales are expected to reach the cottage exemption cap of $10,000. Thus, to grow this enterprise further, there will need to be a move to a commercial kitchen. At this point, none of the regional food business incubators have the approval or the equipment to be process meat products. It is likely that it will be necessary for Leaping Bear to invest in its own processing facility and equipment to grow the broth part of the business. This will be researched further in 2023 as a part of the Farm Viability Planning Process. Markets: Leaping Bear is now at three farmers markets (Brattleboro, Putney and Londonderry) which gives them year-round market access. They wholesale to the Brattleboro and Putney Food Co-ops, local restaurants including the Putney Diner and Paradise Bakery, The Putney Food Shelf, and multiple local active farm stands. All markets are projected to grow under this plan. Management Analysis and Risk Management Strengths: • Vanessa’s graphic design background • Justin’s education and apermaculture/regenerative design background • Relative youth • Justin’s kids like being a part of the farm/helping out • Off-farm job income and savings • Farm’s support from the community • Connection with poultry processor with which have priority • Ability to work well together • Justin’s experience in managing people/employees/contractors/employees/students • customers mostly responding to our products with enthusiasm Weaknesses: • lack of farm capital • first generation farmers • using leased land that is limiting the potential and ability to scale up • layout of leased land at home farm is exhausting to manage • Juggling the demands of other jobs • Lack of farm labor other than Justin and Vanessa • Have some farm debt and student loan debt • Need to improve bookkeeping and accounting knowledge • Limited on expansion of the chicken broth by the lack of a licensed processing facility Opportunities: • Lack of significant local competition for all of the farm products • Getting into more food co-ops and farm stores • the momentum of the local, organic, regenerativefood movement • Vanessa consulting in farm marketing and graphic design • Building Putney Farmers’Farmers’ Market back up • being plugged into multiple farmers market communities across southeastern VT gives resiliency • Leasing additional land for expansion • Developing on farm processing • Expanding production for all products, particularly eggs Threats: • housing market and farm affordability • more and more people are wanting tot use the poultry processor • limited in amount of birds the processor can handle per week, and the processor no longer doing layers. • Predators of chickens • Bird Flu • Climate change • Policy changes and increased regulations • IInflation of costs, particularly grain 4 Justin and Vanessa share most of the tasks of the farm production and marketing. Justin is the primary bookkeeper and financial manager. Funds from the Farm Viability Program have been used to pay for assistance from Carlson Consulting to help Justin increase his knowledge of Quickbooks, and to improve his utilization of QB for the farm’s record-keeping and financial management. Justin will be working on tracking individual enterprises separately so profitability and needed improvements can be better tracked and assessed. Vanessa takes the lead on marketing, putting her professional skills and experience in this area to work for the farm. Still being in the start-up phase, Justin and Vanessa are learning annually what is needed for efficient and profitable production. The purchase of new, pre-made portable housing and bulk grain storage will go a long way towards improving the efficiency of the business from both a labor and cost standpoint. A loan from VEDA, along with a financial contribution from Vanessa are facilitating these capita investments. Predation and Bird Flu are major concerns for the business. Justin and Vanessa intend to be diligent about sanitation, and reducing contact with wild birds and other poultry flocks. There is little else that they can do to mitigate this risk. In addition to electric fencing, the farm purchased a livestock guardian dog in the summer of 2022. Natural Resource Mgmt. Analysis: The poultry business is based around rotational grazing of the chickens on green pasture during the growing season. This is helping reduce nutrient loading and improves nutrient distribution. The poultry are grazed sufficiently away from surface waters that surface run-off is not a concern. Eventually, there will be a need to add further to the land base to both facilitate growth, and to also prevent nutrient overloading. Soil testing will be needed to monitor nutrient loading. The harvesting of hay by a neighboring farmer may be utilized to help keep down the accumulation of nutrients. Market Analysis Currently, there are only a few area farms who produce broilers or layers at any scale, and none of the other farms have their products certified organic. This gives Leaping Bear a relatively wide-open niche for their products which are marketed as local, organic and pasture-raised. The main competition comes from larger operations such as Pete and Jerry’s eggs and Misty Knoll chicken in the wholesale market. But, the demand for their local eggs is currently outstripping what they can produce. They also regularly sell out of whole chickens and chicken parts. Based on experience, and feedback from wholesale markets and restaurants there is plenty of room for the modest growth projected for 2023. Testing the assumptions on market demand will be an important aspect of 2023 towards assessing the potential for future growth. At this point, it is difficult to determine at what point the farm will tap out the portion of the local market which is prepared to pay a premium for meat and eggs, and thus, at what point the farmers will need to pursue markets further away and/or improve efficiency in order to become more price competitive. Without USDA inspection, the farm will not be able to tap nearby markets 5 in in NH and MA. It is uncertain that the VT markets will be sufficient to allow them to grow the business to the point where the farm will meet their financial goals. Further diversification may be necessary. Currently, the microgreens are the main crop other than poultry, and is currently at a very small scale. The production of the microgreens is focused on the winter when there is considerably less competition from area vegetable farmers. Using grow lights and a heated space allows for the production of greens in the winter months that local growers could not grow consistently in unheated tunnels, which has become a common practice in recent years. This gives Leaping Bear a niche for local greens that is not being filled by other growers. Modest growth is projected for the 2023 and into 2024 which will further test the expected potential for growth. Planning and Implementation 1) Increase layer and broiler numbers: Modest growth is planned for 2023. The farm will grow their layer production from 100 to 600 layers. Broiler production will grow from 900 birds processed to 1500 birds processed. At the end of 2023, the farmers plan to review both the market potential, and their ability to produce more birds. They expect to be able to continue incremental growth for 2024 and beyond. Leasing additional land from High Meadows Farm, and investing in new equipment will support the project growth in 2023. 2) Improve production efficiency to allow for the growth of both egg production and broiler production: The current systems in place for layer and broiler production are rather inefficient. To facilitate greater efficiency and allow for greater production, the farmers are purchasing pre-manufactured moveable poultry housing. See links under Capitalization Section Below. If these facilities prove to live up to expectations, and the markets allow for further growth, additional houses can be purchased. The farm has not been able to take advantage of the significant savings achieved by buying grain in bulk due to lack of storage. Being on leased land, and soon to be at two locations, it was determined that the best way to approach bulk grain storage is to purchase portable grain bins which can be pulled behind a truck or tractor. This way, the grain bins can be towed to roadside location where the grain trucks can fill the bins. The bins then can be pulled near to the brooder, field pens or winter housing. 3) Increase broth production: The chicken broth is made from backs and necks, which are less marketable parts as well as old laying hens. The broth has proven to be very popular. In 2023, broth production will be expanded up to the limit of the cottage exemption which allows them to produce the broth in their home kitchen up to $10,000 in sales. Research to date has not yielded a suitable location for further expansion. Building on the leased properties is not an option. During Year 2 of Farm Viability enrollment, further 6 options for expansion will be explored including purchasing a “commercial kitchen in a box”. 4) Grow more microgreens: The microgreens enterprise has proven to be quite profitable with strong potential for expansion. At this point, a modest increase in greens production is being projected for 2023. Further growth of this enterprise will be evaluated as a part of Year 2 of the Farm Viability enrollment. 5) Poultry processing on site: Currently, the most cost-effective way for the farm to get their birds processed is at Sweet Picking Farm. However, Sweet Pickings is limited in the amount of birds that they can take at one time and throughout the season. The owner has also decided to no longer process old laying hens. Eventually, Leaping Bear would like to grow to a size that will out-strip Sweet Pickings capacity. Therefore, they are looking ahead at the potential need for developing their own on-site processing. This will also be explored further during Year 2 of their Farm Viability enrollment.