Sunday, March 4, 2012

Getting Ready for Market - Raised Beds

Don’t you love springtime? I can’t believe that we haven’t posted a blog since last July when we joined the Hillcrest Market. We were working hard for the market. Then we were traveling and involved with other major projects. Now, it is springtime in Arkansas. We’re busy again on our little farm getting ready for the market opening in May.

Kit has been experimenting with new Artisan breads to offer starting in May. Featuring lots of healthy grains, she’ll have “Seed”, Buttercrust, Whole Wheat, and Cinnamon Raisin Breads. Plus, she’ll have the items, which were so popular last summer such as her blue ribbon poppy seed bread, granola, “double chocolate almond” biscotti, and muffins with various berries. Her gluten free products will be missing, except by request. They just didn’t sell. Two cute little boys nearly always came in for her gluten free peanut butter cookies. She’ll have those ready, just in case the boys show up.

Drew has already planted peas, potatoes, onions, and broccoli (under caps). He diligently moves his tomato seedlings outside during the day and inside at night. During the fall, he doubled our raised bed garden space. Raised beds with carefully created soil have plenty of nutrients with organic material, sand, and our natural clay. This soil can produce the best vegetables with minimal effort and chemicals. Although we’ll use the new bed this year, it will take several years for it to be fully ready. We spent 18 years perfecting our garden soil in South Carolina. Anytime we needed perfect planting soil, we simply took it from our own garden. This reminds me of an old joke. The groundskeeper at the British Tower of London was asked, “How do you keep such nice grass?” “No problem really.” the gaffer answered. “You add nutrients to the soil, cut it moderately, then roll it for 400 years.”

I had reported to you the failure of our pumpkin crop last summer. We did sell a few small early ones from the failed crop. This was before the glut of pumpkins for Halloween hit the market. We replanted the pumpkins and controlled the squash vine borers with the mild and safe Malathion insecticide. Almost nobody actually eats the pumpkins or cares if they are organic. By October, we had grown some beautiful pumpkins. But, in October everybody had pumpkins. We couldn’t sell a single one. By contrast, the tomatoes and cucumbers we were able to raise in August (Peak season is in June.) were very popular. This year Drew is hoping to grow nearly organic vegetables before and especially after the peak seasons. By "nearly organic", we mean minimal chemicals and none directly on the vegetable fruit itself will be used. We can’t technically call our stuff fully organic, if we’ve even used a little chemical for a different crop on that ground plot several years earlier.

Managing a Tiny Hedge Fund

Kit and I nearly broke even financially in our bakery and vegetable business last year. Or, as the IRS would define it, our “hobby.” We DID learn a lot. We can produce and sell excellent products at a good price. However, to make a major profit we would need to increase production 100X by capitalization of machinery and land improvement. At my age of 61, I don’t think that we could spread those costs over enough years to justify the risk. Plus, I doubt that we could sell 100X product, certainly not in the Saturday market. We plan to continue and even expand our “hobby”, maybe even contribute to our livelihood. But, to pay our major bills, we need to develop other sources of income.

A creative and sustainable life requires using what you have. When I was an engineer in the 1980s and 90s, we diligently saved through IRAs and a 401K plan. Creatively making a sustainable profit on these savings, our tiny hedge fund, is now a necessity. My natural inclination would be just to buy CDs and index funds. Unfortunately, interest paid on CDs is close to 0% right now. And index funds haven’t done much better since 1999. Finally, according to Money Magazine, 79% of professional fund managers failed to do as well as the indexes last year. Therefore, necessity has thrust us into the world of investing. Surprisingly, the effort has drawn on my analytical engineering skills and been a bit of fun.

Before the 2008 stock market meltdown, I had smelled trouble coming. Studying at least 50 books on investing, financial management, and economics taught me something. For any silly thing you want to do with your money, there is an investment “expert” out there to tell you “It’s a smart move.” Usually, the “expert” is selling his services to help you do the silly better. It is interesting to read the pre 2008 books where “experts”, the same ones still giving advice, encouraged people to take advantage of adjustable rate mortgages. “Housing values always go up.” They promised. Some “experts” on TV told invertors to “Buy more stocks.” just as the meltdown began.

Since 2008, I’ve diligently continued studying finances, especially 100’s of hours last winter. The best attitude to take is the 1930’s adage, “Nobody knows nothin’.” In this spirit, good financial advisers follow “Managed portfolio theory”. By this plan, individuals own investments in categories, which should respond oppositely in a crisis, for example generally stocks and government securities. Thereby a crisis should not completely destroy an investor’s resources. Remembering that investment “experts” and professionals aren’t always reliable, the problem is in the selection of the specific investments. Adding to the difficulty, the economy has unprecedented challenges. Government debt, loss of our manufacturing competitiveness, and worldwide shortage of resources will mean that the economy and investments will not respond in the future the way they have previously. In this environment, every investment is based on an expectation of an uncertain future. Therefore, if anybody’s interested, following are Drew’s economic predictions regardless of which party wins the 2012 election.

.1. The US economy in spite of dramatic ups and downs and a few exceptional stocks will stumble along for the foreseeable future. The days of general growth on which so many investment strategies are based are over.

.2. The tax code provisions for capital gains and dividend exclusions for most earners will remain in place for the foreseeable future. (An interesting note: Traditional IRAs are fully taxable when withdrawn. Many of us who invested in IRAs in the 1980s and 90s, could have been better off by paying the tax rates then and paying the current capital gains on the profits now.)

.3. The Federal Reserve will maintain low interest rates for the foreseeable future. They have indicated until at least 2014.

.4. Inflation remains a major long term, although not immediate, threat.

.5. A major reduction in both stock and bond prices will eventually occur (Ask Greece about this.) and will hit the "growth" stocks hardest. Dividend and interest income, if established wisely, should remain more stable.

.6. Energy cost will certainly trend higher long term.

Using this projection, we have purchased dividend stocks, energy, and REITs to cover our minimal budget plus TIPS bonds and gold to balance them long term. If you have insightful ideas, we would love to hear them.

Sunday, July 24, 2011

Kit goes to Market

Kit has always hoped to bake and sell goodies. Arkansas like all states regulates it's food industry. Arkansas has required use of a commercial kitchen for all foodstuff offered for sale. Kit's immaculate kitchen is cleaner than any restaurant kitchen I've ever seen. But, Arkansas law specifically excluded use of home kitchens, until recently. I suspect that there had been some political motivation. However, under counter pressure from emerging local markets, Arkansas lowered their standards to match the USA FDA. This revision opened the door for Kit.

Kit has joined the Hillcrest Farmers Market. Hillcrest is a classy and well kept residential and shopping area first built in Little Rock in the 1920's. If we were in another country and found an area like Hillcrest, we would call it "charming." To get her started, we made a "small business loan" to Kit from our savings. She baked cookies, muffins, granola, her famous poppy seed bread, and several gluten free cookies. She calls her bake business "Celebrate". Nearly everything sold out the very first week. She's already made enough profit to repay her loan.

Kit's enterprise has opened the door for Drew as well. In his raised bed gardens, he can raise commercial quality vegetables. But, he hasn't produced enough quantity yet to justify the fees to rent a stall in an open air market. However, the combination of baked goods and vegetables certainly justified the fees. His vegetables sold out as well, even though we had deliberately placed the prices high hoping to bring some home for ourselves. A commercial peach farmer once coached me, "If you can grow it, you can sell it." Turned out that he was right.

Failure of the pumpkin crop - coyotes like watermelons

Drew's gardening expertise is using intensive raised beds. But, hoping to start a larger scale U-pick pumpkin farm we had put in a trial field plot near the river last spring. The almost organic plants flourished. Straw was placed between all of the rows to give a resting place for each pumpkin. But, not very long after this photo was taken the plants started to wither. Tiny holes appeared at the base of every plant. Squash vine borers destroyed the entire crop. We expect to try again next year. Then we'll have to use some chemicals. We'll spray before the fruit forms. Nobody is likely to eat the pumpkins anyway.

We had also put in an trial plot of watermelons. The plants at first did not thrive. Not until the hot weather of mid June did the plants start to grow rapidly and form fruit. Lots of healthy melons of various varieties appeared. I poured on the water using our irrigation well. The melons were nearly ripe when in one night something ate 20 or more. In a couple of days, nearly all of our melons were destroyed. The damage didn't look like raccoons who typically make a small hole and hollow out the middle with their hands. Teeth marks looked like small bears ate the watermelons. "Coyotes ..." a commercial farmer told me "... absolutely love watermelons." That fit. We do hear a lot of coyotes singing at night very near the house. And the plants had been crushed down by animals larger than raccoons or woodchucks. It still might have been a family of bears. The previous owner killed 3 bears on this property in the 1990's. But, my bet is on our resident pack of coyotes.

Finally, the good news. Drew's raised beds are doing very well. This year we had every type of garden vegetable we tried. Nearly everything was commercial quality. We anticipate only improvement as we yearly enrich the soils and get more experience with Arkansas conditions.

Monday, May 2, 2011

Vegetable Gardening

Last year we retired to be farmers. Local growers are already rather sophisticated raising and marketing fresh vegetables. They have a web site ordering system and designated delivery points. The commercially successful growers have slowly built up a clientele by establishing relationships with people who then specify their produce. This type of farming is very competitive.

However, Kit is eager to open our own vegetable market. She wants to start by using the back of our truck alongside of the road. No kidding ! She's hopeful to begin this year. I'm not sure that we can raise much more produce than we eat this year. But, we are improving our intensive raised beds for tomatoes, potatoes, corn, broccoli, peas, okra, peppers, and squash. And we’ve put in 100’s of perennial asparagus plants. We also established a commercial quality raspberry bed. From it we could propagate 100’s of vines for a larger operation. These are experiments to determine what we could economically grow in Arkansas conditions.

I think that “U-pick” pumpkins and watermelons could be our best chance to make a profit at farming. Raccoons don’t eat pumpkins, we hope. This year I rented Home Depot's biggest roto-tiller to make field plots. Artifacts tell me that ours was a depression era farm. I'll bet that the last time anyone ploughed this land was with a mule. Still, using the roto-tiller was easy and fun. But, I tilled too much to start. Preparing all of the mounds for pumpkins and melons after tilling nearly killed me. See me working too hard for someone my age. Maybe I was never that young. Yea, I wish that I had a tractor. I'll get one, if I can justify the cost.

Anyway, if we prove that we can raise commercial quality pumpkins or melons, then next year we could put in much larger plots and advertise a U-pick operation where the customers select their own from the field. We are aware that getting customers to come requires providing a charming family type experience as well as the produce. Nobody could do that better than Kit, if Drew can just raise the stuff.

Tuesday, April 26, 2011

Pecan Orchard

Pecan trees ! I love them. The nuts are my favorite. One of my best memories growing up is collecting the nuts on crisp fall days. I even admire the airy shape of the trees. I notice every one we pass by on the road. In South Carolina, the pecan trees I had planted grew like weeds. But, I've had such poor results here in Arkansas. I've had to plant the orchard (24 trees) 3 different times, 4 times in some spots. Deer killed one orchard by nibbling and another batch by scraping their horns. After I caged each tree to protect them from deer, twig girdlers (insects) cut off all the new growth year after year. I finally controlled these pests with chemicals.

Last winter my best tree was cut down by … mice. No kidding! They gnawed it off at ground level. I did have one tree thriving by the house. It bore the biggest nuts that I've ever seen. A visitor hit it with a car and killed it down below the graft union. It's growing again from the non-commercial rootstock and will surely give the squirrels tiny wild nuts. At least it's a pecan tree.

Currently most of the commercial trees are infested with scab disease severe enough to kill nearly all of the new growth. I haven't been able to buy the highly potent chemicals without a commercial license. Varieties of pecan trees ? Mostly I have the rootstocks where Mahan, Stuart, Desirable, Cape Fear, Pawnee, and Choctaw used to grow. A few scab crippled originals are struggling along. At one point they were bearing a handful of nuts. Maybe I should have noticed that almost no pecan trees are growing in our area. I’m now introducing hazelnuts. So far, they are doing fine.

Starting Plants

Last August was hot and dry. 107 (42 Celsius) degrees in the shade with humidity under 20% killed much of our garden, even though I was watering. That’s why successfully raising vegetables in Arkansas means getting them started early in the spring. But, because we have frosts as late as April, it is best to keep the plants indoors until the danger of frost is minimal.

Purchasing a lot of plants for the garden is rather expensive. Therefore, I’ve tried many times to start them indoors from seed. There are lots of ways to kill the tiny plants. I’ve destroyed seedlings by over fertilization, sun burn, too hot, too cold, and especially excessive water. This year we were highly successful, especially starting tomato plants. I’ve discovered that to avoid damping off disease you must keep the little seedlings almost agonizingly dry. And you must put the seedlings in the wind or in front of a fan. This makes their stems strong. After putting our home started tomatoes in the ground, we saw some not much bigger for sale at $9.95 per plant ! Kit said, “Forget raising tomatoes. We’ll just sell the plants.” And so we plan to try selling seeded plants along with selling propagated plants such as figs and raspberries.

Another technique that we had developed in South Caroline was starting cool season crops like broccoli in mid winter by sowing seed directly in the garden. As shown in the picture, you can plant them in the soil under mini-greenhouses such as old milk containers. The container caps can be removed on warm days and replaced during hard freezes. The translucent plastic is better than clear plastic, which could allow sunburn of the emerging seedlings. This mini-greenhouse technique seems to be working equally as well in Arkansas. We’re currently building up our inventory of containers.