Profiles of two 'nontraditional' agricultural businesses
When most people think of the "typical" Farm Credit customer, they probably imagine a dairy farmer, or a potato farmer or perhaps a crop farmer who grows several hundred acres of corn, beans, lettuce or grain.
That's okay. Most of our borrowers are farmers in the traditional sense. However, as the Northeast's number one agricultural lender, Farm Credit serves "agriculture" in the broadest sense. That's why our customer base also includes a wide range of "nontraditional" ag-related businesses — everything from a llama farm in western Massachusetts, to a squid processor on New Jersey's southernmost shore.
So, for this issue article, we decided to look "outside the box" and provide you with an up-close look at two nontypical Farm Credit customers: a sawmill operation and a field-tile business.
Green Meadow LumberWestfield, Massachusetts
Steve Oleksak is the fourth generation of his family to make a living in the timber business, but his apparent entrepreneurial skills set him apart from his forebears. That's because he has grown the family's business from a two-man enterprise in his father's day to a $4-million operation today, with 44 employees, two sawmills and a pallet mill.
Green Meadow Lumber occupies a 55-acre site in Westfield, Mass., just west of Springfield. The main building mills logs for high-grade lumber, but Steve also operates a scragg mill, which processes small, low quality logs into pallet lumber, cants and log cabin stock. At their peak, the main mill runs two shifts and turns out 40,000 board feet daily and the scragg mill produces up to 50,000 board feet daily. Steve also runs the pallet mill on the main site.
Steve also owns forestland, which is managed to provide a supply of logs for the business. Otherwise, he buys logs for his mills from forest landowners, foresters and loggers.
"I noticed that no one in the industry was processing small logs efficiently. Since sawing time is increased to process smaller logs, most milling operations go for bigger logs to maximize yield and efficiency. So I chose to aggressively pursue low-grade timber — the junk that no one else wants."
Someone obviously wants the end product, because Green Meadow now turns out between 8-to-10 million board feet of lumber annually and ships up to 4,000 pallets per week to markets as far away as Boston (approximately 100 miles away).
Loans and consulting
Green Meadow relies upon Farm Credit for periodic loans and leases and general business consulting services. Oleksak's loan officer is Bob Wigmore, of Farm Credit's Enfield, Conn. office.
"Bob makes quarterly visits to the operation to see how Farm Credit can help," Steve said. "He saw the potential in our operation when I was younger and the business was very small. Bob is excellent to deal with because he always pays attention to what's going on and works very closely with me to help ensure that the business succeeds. It helps that he has 14 years of experience in the timber industry, so I'm sure that he knows the business better than most financing professionals in the area."
Todd Brown Ditch and TileCato, N.Y.
A ditch-and-tile operation might seem like an unusual enterprise to be highlighted in an ag business publication, but Todd Brown, of Cato, N.Y., is a part-time cash-crop farmer. And his ditch-and-tile business serves other farmers.
Todd and his son, Rodney, manage about 120 acres of tillable land on which they plant and harvest corn, hay, wheat and spring barley. They also install drainage systems for dairy farms, orchards and cash-crop farms.
The typical installation goes something like this: the Browns use a backhoe or a trencher to dig open trenches 2- to 6-feet deep and install 4- to 12-inch tubing. The Browns use this open trench system to tie old lime or stone ditches into the new tile lines. Then once they create an unobstructed outlet to an open ditch or other suitable area, their system should last 100 years — or longer — and allow safe disposal of runoff or unwanted ground water.
"We use scientific evidence to determine where the tiles should be laid," said Todd. "In some hilly fields, it is not as simple as running a line to the wet spot. Sometimes you have to get above the wet spot to cut the water off before it gets there. For example, in an alfalfa field, we look for spots where the crop is dying, which may mean there is excess water under that area."
Todd says that tiling is simply adapting modern technology to fit nature. "For example, alfalfa seedlings will stay in a field longer if they're not sitting in water. Apple growers — who can spend as much as $10,000 to plant an acre of trees — come out way ahead by investing in the tiling of a wet field instead of losing all or part of that acre because of trees with wet feet."
Line of credit
Todd works with Aaron Kimmich, of Farm Credit's Geneva, N.Y. office. He uses Farm Credit for a line of credit that allows his business to access cash on an as-needed basis. He favors Farm Credit because of the organization's track record for customer service.
"We got tired of waiting for a commercial bank to let us know if we qualified for a loan," Todd said. "Now we have a line of credit with Farm Credit and it's fantastic. If we see something at an auction at a reasonable price, we can comfortably buy it on the spot because we know we have money in our account." Todd added, "I also leased a piece of equipment through Farm Credit. Farm Credit offered to set up a seven-month payment schedule because our cash flow is slow in the wintertime when we don't usually have much tiling business. We really appreciated this flexibility."
So there you have it: Two diverse — and highly successful — enterprises. And, in case you're wondering, there is a connection between business success and the quality of your lender, even when your business is somewhat out of the mainstream of U.S. agriculture.
Contact us at info@firstpioneer.com for more information about our financing options.
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