Note: The following article was featured in Businessweek. Alan Bjerga, a reporter for Bloomberg News, was the author of the article.
To make a living as a U.S. farmer today, you pretty much have two choices. Raise a crop or livestock and contract with a corporation to buy it. Or start a small, artisanal operation that caters to the locavore crowd eager to pay top dollar for garlic scapes and kohlrabi.
Matt and Anne Burkholder chose a different route. Fifteen years ago, the Dartmouth College sweethearts traded New Hampshire’s White Mountains for Nebraska’s Great Plains to take over land in Cozad, pop. 4,000, that’s been in Matt’s family for three generations. Their 5,000-acre spread barely resembles the alfalfa operation Matt’s grandfather began in 1948. The couple grows organic corn on some fields and genetically modified batches on others. Their feedlot, where young cattle are fattened up for slaughter, is industrial-size, yet the 2,700-head herd also has room to run and other creature comforts.
It’s with that kind of mix, the Burkholders say, that a family farm can thrive in this era of industrial agriculture. Where Matt’s dad and grandfather were businessmen who relied on hired help, Anne says, “Matt and I are very hands-on. We get dirty every day.”
The couple’s foray into farming began in the late 1990s, just as Americans started demanding foods grown without chemical-laced fertilizers and pesticides. Prices for the alfalfa long produced by Matt’s dad were being undercut by cheaper feeds, so Matt—he runs the crop side of the business—switched to organic production and began marketing to organic egg producers, who pay 30 percent more than he was getting before. Adding organic corn to his fields in 2007 helped the bottom line even more; the all-natural variety can sell for twice what commodity corn fetches. To keep the crops free of pests, Matt brought in insect-eating wasps, which cost 90 percent less than chemicals.
Anne had to get even more creative in overhauling the beef business, where it’s common to make just $20 in profit after raising a massive 1,300-pound animal. Her father-in-law had sold his steers to big meatpackers, an arrangement that gives farmers little control over their product and its price. Anne wanted more say in how her animals are raised, something she thought consumers were interested in. So she bought into U.S. Premium Beef, a cooperative that sells meat around the world to customers willing to pay higher prices for a better product: like beef that’s 100 percent traceable to the farm where the cow was born.
Anne knows the provenance of 90 percent of her cattle—she buys them as calves from farms near hers—and keeps birth-to-slaughter records that choosy buyers require. That means she can sell a steer to the co-op for $65 to $70 more than a typical rancher would get, generating an additional $350,000 a year.
The arrangement also leaves Anne free to innovate in other ways. She had an animal psychologist design a program she likens to an orientation. In their first week at the feedlot, the cattle learn when and where to eat, and how to rotate through the system peacefully. The idea is that order reduces the animals’ stress, making them less prone to sickness and less dependent on a regular regimen of antibiotics. That helped cut drug costs by 50 percent, she says.
Dividing the labor means husband and wife are also each other’s customers. Matt buys manure from Anne to fertilize his corn, while Anne buys Matt’s excess alfalfa hay for cattle feed. One year he was short, and “people thought our marriage was in trouble when Anne started asking [neighbors] for hay,” Matt jokes.
Together, the couple’s fiscal 2011 revenue was $8.02 million. Government doesn’t have a big role in the enterprise. Some years ago a federal loan program helped fund an eco-upgrade of the plant that turns Matt’s alfalfa grass into pellets. (It now runs on sawdust instead of natural gas.) But the farm’s annual crop subsidies of roughly $10,000 in recent years are a negligible part of overall profit.
Last year, Anne began chronicling farm life on a blog. It’s great to connect with the public, she says. Selling directly to them—her long-term plan—would be even better. “I don’t have a job,” she says, “if I don’t have a consumer.”