AcresUSA.com links

Book of the Week: A Farmer’s Guide to the Bottom Line

By Charles Walters

Editor’s note: This is an excerpt from Acres U.S.A. original book, A Farmer’s Guide to the Bottom Line, by Charles Walters. Copyright 2002, softcover, 212 pages. Regular Price: $24.00.

The greatest deterrent to a successful farming venture—as with any business—is having unreal expectations on the one hand, and doubts that the enterprise can succeed on the other hand. The success of Acres U.S.A. is well known, and some parts of the story have been related in A Life in the Day of an Editor. A similar success story can be read in the book Fletcher Sims’ Compost. But for my purpose two case reports will illustrate how a traffic jam between the ears can be removed to benefit the venture.

A Farmer’s Guide to the Bottom Line by Charles Walters

Paul Abalos grew up in the poverty of a migrant beet worker’s transport or shelter. While still in his mid-teens, he told his parents he wanted to get an education. This was doable because community colleges were available, and hard work often resulted in scholarships being awarded. Paul’s dad told him, “Well, you’ll have to come in off the road, get a job, and stay put.” Paul accepted this advice. He found employment in a restaurant and learned something about the business while observing the tawdry practices that prevailed. In due time he became educated and credentialed for the teacher’s craft, but he never quite forgot what really good Mexican food tasted like. The fare generally available north of Austin and San Antonio seemed partial to heavy grease, and perpetrated every bad habit and mistake amateurism is heir to. Paul and his wife found a small abandoned stand, the kind frequently harnessed to selling root beer and soft ice cream. The place had few seats, but there was and always is a need for good food, even in Hereford, Texas, now surrounded by a million head of feedlot cattle. Paul invoked strict discipline in the management of the restaurant known as Les Charro Too. Many locals are convinced the food is the best Mexican west of the Mississippi and east of the river Nile, certainly north of Mexico.

The rule Paul Abalos invoked is absolutely a rule for any enterprise: find a need and fill it. The need has to be filled at a profit, and this can be best achieved by working very close to the vest, controlling and handling expenses without reference to banking connections or consuming inherited capital, two of farming’s greatest sins. Over the years Paul Abalos has expanded the food emporium several times, once building an addition himself in order to avoid an increase in rent. Clean, simple, and wholesome became the family’s formula, with each plate delivering quality, each perfect for expansion and full employment for the family.

Generally speaking, the requirements fit into any sale, but only two are absolutely mandatory. There has to be a need or a want, and there has to be an ability to pay. Any business operates with this simple formula in mind. Why, then, is agriculture different? Why must farmers sell their products as if on an auction block at a distress sale? Why are costs of production seldom a part of the production-to-consumer sequence? It is not enough to say that agriculture does not have the institutional arrangements required to effect an orderly market, even though this statement is true. For the purpose of this book, I do not intent to set down many of the principles needed to govern farming in any intelligent manner. That role falls under the purview of the intellectual advisers to the food producers.

Here we have to examine what the individual can do, it being accepted that no one holds a gun to the head of a farmer and requires him to sell to the feedlot, the grocery chain, the provender who builds all sorts of exchanges into the grower-to-consumer process. Admittedly, the individual cannot run agriculture, but he or she can get smart, even if some people think the answer is to get bigger.

The individual contemplating the production of poultry, beef, pork, mutton, etc., has this reality to consider. Grains used to feed livestock are largely in the hands of a few international firms. These firms own a resource most markets cannot comprehend—every grain farmer in the world. They have all the clout it takes to make the market go up or down, and perform either task in a manner best calculated to keep the commodities coming while the land is assembled into a few strong hands. For decades, each morning the Meat Institute sent its yellow sheet suggestions to livestock buyers and by 5:00 A.M. they “discovered” the market prices for the day, and the market almost never relates to the cost of production.

It would seem sheer madness to even think of entering such a business, and not many do. Indeed, the producers in the main became established long before the present era, surviving and consolidating, until now all of them are extremely vulnerable. But there are values—if that term can be permitted—on the other side of the ledger, and these considerations seem to indicate the approach supported in this Guide.

Charles Walters was the founder and executive editor of Acres U.S.A. He authored thousands of articles on the technologies of eco-agriculture and was the author of many books on the subject including Eco-Farm, Weeds—Control Without Poison, Neal Kinsey’s Hands-On Agronomy, Mainline Farming for Century 21, The Carbon Connection, The Carbon Cycle and others. A leading proponent of raw material economics, he served as president of NORM and authored several books on economics.