September 8, 2020

Evolving Beyond Horse and Buggy, Farmers Looked to as Business Mavens

By Stephanie Metzinger
Manager, Communication, Western Growers

For generations, growers across the United States have masterfully responded to the ebb and flow of massive global transitions to continue to provide food for the world, carry on their farm legacies and contribute to the nation’s economic success.

In 2017, the agriculture and food sector contributed $1.053 trillion to the U.S. gross domestic product. If treated as its own country, it would rank as the 16th largest economy in the world, sandwiched between Mexico and Indonesia. Farming contributed $132.8 billion of this sum. Even more astonishing is this was generated by only 3.4 million producers—75 percent of whom have been in business for more than 10 years.

The longevity and success of these operations is a testament to the business savvy of farmers. In Western Growers’ membership alone, many farm operators have been in business for 50 or more years. The Elliot family has been farming for over 150 years; the Jack, D’Arrigo, Vessey, Danna, Smith and Couture families for more than 100 years; the Reade, Pappas, Deardorff and Merrill families for 90 years or more, to name a few.

“I’ve been active on the ranch since I was a kid and have seen farming practices evolve from literally those horse and buggy days on up to now where we are flying drones,” said Ross Merrill, CEO of Merrill Farms. “I’ve witnessed a lot of changes, but the one thing that stays consistent is the need to adapt business models to keep up with current conditions in the marketplace.”

Merrill Farms was originally founded by Ross’ grandfather, Russell Merrill, in 1933 as a grower/packer/shipper, selling its crops under the Merrill labels. Identifying an opportunity to ship product to the East and expand into new markets, Russell partnered with Ken Nutting, Bruce Church and E.E. Harden to build packing houses and launch an ice company (Growers Ice) next to the railroad tracks. This proactive move not only resulted in the launch of the fresh produce industry in Salinas Valley, but it allowed Russell to expand Merrill Farms to other locations across California. Business was booming and Merrill Farms was officially a year-round shipper.

However, in the ‘80s, the company started to see a trend of consolidation on the retail buying side for produce items. It was becoming increasingly difficult to stay competitive so Merrill Farms evaluated its operation and profit margins and decided to rewrite its business model.

“We decided to specialize in farming and grow for the larger labels rather than competing with them on a marketing level,” said Merrill. “This model has been successful for the last 25 years. Our core value is focusing on the quality of our cultural practices so our shipper partners are assured that our product is going to arrive on time and that the food safety, worker safety and environmental safety compliance is already taken care of with a degree of excellence. That’s the currency Merrill Farms has today out in the marketplace.”

Merrill went on to share how focusing on the growing side has also opened up more marketing windows for the farm and has presented new crop opportunities. Merrill Farms has been able to expand its crop offerings beyond its signature iceberg lettuce, romaine and leaf lettuce programs, to now grow crops such as cauliflower, broccoli, broccolini, and Brussels sprouts. Venturing into new commodities has helped with crop rotation on the ranch and has resulted in increased yield and improved soil health.

Similarly, Rancho Filoso, which planted its roots in Ventura County in 1882, first grew lima beans, then walnuts and today citrus and avocados. The ranch is now diversifying and casting a wider net beyond its specialty crop background in search of different revenue streams. In 2016, the 86-acre citrus and avocado ranch substituted 1.5 of its acres with coffee.

“We’ve been worried about citrus production in this area, mainly due to Huanglongbing (HLB), so we’ve been trying to find new ways to diversify,” said Lisa Tate Soury, owner/business manager at Rancho Filoso. “One of the ways we are trying is with coffee. Although coffee is typically grown in higher altitudes in the tropics, we wanted to grow it here on the coastal climate to see how it goes.”

The plants will not be considered mature until next year, but the coffee beans have already received high cupping scores considering the age of the plant. Once the plants reach full maturity, the ranch will be ready to complete its exciting shift into coffee as it has already accumulated the necessary machinery and knowledge to successfully process the beans once they are picked.

“Everything is looking good, but it is still too soon to tell,” said Soury.

In the true entrepreneurial spirit, the five generations of farmers who have sat at the helm of Rancho Filoso surveyed the economic landscape during their respective reigns and altered the ranch’s business model accordingly. Taking a risk and diversifying has resulted in a highly successful farm operation that spans 140 years and counting.

Though multi-generational farms comprise most of agriculture in the United States, there are still a few who are braving the unknown to launch their own enterprise. Harrison Topp graduated from college during the Great Recession in 2008 and found himself seeking the security that the food and agriculture industry afforded.

“I migrated toward agriculture because I wanted something tangible and it felt safer engaging with the food system,” said Topp. In 2012/13, he started cultivating a small orchard in Paonia, Colorado. After a couple of years of working to boost soil and tree health, improve water efficiency, increase harvest yields and diversify production, Topp and his partner, Stacia Cannon, officially caught the farming bug and outlined the steps needed to grow the business.

“We started doing the calculations of what we thought we were going to need to be in this long term and provide for the majority of our livelihood,” he said. “I looked across sectors, beyond orchards and horticulture, to develop a model that looked like it spelled long-term success and would lead to a lifelong career in this business.”

In 2018, Topp Fruits officially expanded to Hotchkiss and now grows everything from peaches and cherries to apples and plums. Topp notes that the investment to expand the operation went hand in hand with the understanding that both he and Stacia would need to maintain off-farm work for a number of years.

Topp is currently the membership director for the Rocky Mountain Farmers Union and lauds the company for affording the flexibility needed to serve in his role, while still working on the farm to get his business up and running. Additionally, he credits Farmers Union for providing the opportunity to interact with high-caliber producers who have shared invaluable wisdom on how to effectively and efficiently run an agribusiness. Many of these relationships have played a role in helping this first-generation farmer establish premium markets to move his fruit.

“A huge part of our long-term strategy is making sure we aren’t planting trees where we don’t know where the fruit is going,” said Topp. “We are doing a lot of work to establish and maintain those markets ahead of time so that when we are at the stage of where we are producing a lot of fruit in two to three years, we’ll be in a lot better shape.”

Launching new enterprises, adapting business models for long-term success, diversifying and innovating are just a handful of the professional skills that farmers have mastered as entrepreneurs. Producers have ingeniously navigated their operations to withstand the turbulence of the unknown and continue to raise the bar for excellence. Needless to say, farmers are the ultimate business mavens.