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| MO farm grows wholesale produce and goat business |
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| By SARAH B. AUBREY
Indiana Correspondent
TRUXTON, Mo. — For South Georgia native Rusty Lee, his chance to come home to the farm began to develop during his years in graduate school at the University of Missouri-Columbia, though he didn’t realize it at first.
While studying for a master’s degree, the former design engineer for an equipment manufacturer met his wife, Teresa, who was studying agricultural economics. The couple pursued their advanced degrees (Teresa at Purdue University in West Lafayette, Ind.) and moved to Georgia during their early days of marriage.
Both harbored a strong desire to be more involved in production agriculture. In 1999 they purchased 33 acres from Teresa’s maternal grandparents and started planting vegetables on the farm near Truxton, Mo. Though the farm still produced some conventional row crops, the Lees knew that at their size, a niche or unique business was important.
“We knew that we had to generate as much revenue as possible and squeeze the most money we could out of an acre,” Lee said.
The entrepreneurial-minded Lees started a farmers’ market in the Warren County, Mo., area. “We knew we had to get sales going,” Lee said of the early days in the produce business.
Soon after the market began, a neighbor wanted to grow wholesale produce, so the two partnered in 2001 to form Missouri Vegetable. The Lees sought advice from organizations such as the Missouri Department of Agriculture (MDA. The meeting with MDA proved more fruitful than the Lees ever expected.
“About that time the Schnucks grocery store chain out of St. Louis told the Department of Ag that they were looking for a Missouri homegrown tomato. Department of Ag made the introduction for us, and then got out of the way,” said Lee.
After negotiating with Schnucks, Missouri Vegetable found its first wholesale buyer.
“Tomatoes were our first main crop; that year, we produced 10 acres of wholesale tomatoes,” Lee recalled.
The relationship with Schnucks worked well, though the growers really had to gear up to meet the production required to service a grocery chain account. Still, the popularity of their homegrown tomatoes began to swell.
“We were really well received because we were growing old garden varieties, but in a commercial setting,” Lee explained.
Soon, the company was in expansion mode once again. The tomato acres grew annually for several years in a row – in 2002 it planted 15 acres, in 2003 it increased to 20 acres, in 2004 it was at 30 acres and in 2005 Missouri Vegetable was up to 45 acres.
By 2005, Lee’s partner was ready to exit the business, so later that year the Lees bought out their neighbor’s half. “So, in 2006, it was back to just Teresa and I,” Lee said. “Lee Farms, LLC is the name now.”
To accommodate the change, the family decided to rework some aspects of their business once they were on their own, and decided to stay with wholesale. They added some restaurant trade and diversified their crop mix.
“We needed more customers. When all the business is with just one customer, all I have to do is lose just one customer and I’d be in a bad way,” Lee acknowledged.
The solution came in working with a distributor to market the produce for them. The Lees use a company called Ole Tyme Produce out of St. Louis. Lee said selling through a distributor saves him time so he can stay on the farm and focus on production. It also reduces transportation expenses.
A major consideration for any producing farm is always food safety. By using a distributor, the farm greatly reduced its personal liability for foodborne illnesses and other problems, since the distributor continues the emphasis on a wholesome product when they deliver it to the final customer.
At the farm, Lee employs safe handling details such as proper temperature for storage.
“They’re already going through all the steps,” he said.
Besides produce, the Lees have also diversified into alternate livestock. Where once cattle, sheep and horses roamed, now Kiko goats forage and meander through fallow vegetable fields and pastures.
The Kiko breed is a meat goat that is popular with consumers in the eastern part of the United States. The Lees run around 120 females and, once again, they have partnered with a neighbor to market the finished meat goats directly to the source of consumption.
“The demand is high for these and the prices are very favorable,” Lee explained. “We sell straight off the farm by the semi-load.”
Lee has created another distributor relationship of sorts to market the goats. He uses a live animal buyer out of Pennsylvania to negotiate prices over the phone before the animals ever leave the farm.
“The truck comes to us; it weighs empty, loads and then weighs full. The net is what we’re paid on,” he explained.
Goats also work for Lee Farms because they don’t add a lot of cost in terms of feed like other livestock can. “The goats use up the vines left over from the fruit in the field. It’s a great way to clean up – what would be wasted is now their feed,” he said.
“The goats even eat the tomatoes. They’re a primarily white goat, you should see them – their mouths are bright red,” he said with a laugh, though he is serious about saving money feeding the goats on organic matter in the field left over from the summer’s vegetable crop.
With so many small ag ventures struggling with wholesale as a viable option, the Lee family thrives on the selling strategy from which so many others have backed away. Lee says he saves on basically everything it takes to put out a crop.
“Its very true from retail to wholesale, there is a big difference in price I get paid,” he began. “But as the price goes down, the efficiency and volume increases so much that I can afford it.”
Lee prefers wholesale because in his mind the market is more guaranteed.
He has a known demand and no price-gouging from other vendors, such as he’s seen at farmers’ markets among competitors. The wholesale model also works because their area lacks a strong direct-to-consumer market.
“It’s a very rural area out here and it’s hard to get a premium at the consumer level,” he explained.
The drawbacks to wholesale, besides a lower total price for product, can include cash flow. “With wholesale, you don’t get your money right away the way you do at the farmers’ market – you might wait two or three weeks,” Lee said.
Still, he believes that nobody will ever manage his land as well as he and his family.
“I like being here,” Lee said. “There are give and takes, but we think the efficiencies have outweighed the price loss from not selling retail.” |
| 9/12/2007 |
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