NEWS
Low-Cost, Low-Debt Farming
Mon Oct 20, 2014 08:52 AM CDT
(Page 1 of 3)
Nathan Vergin, a 26-year-old Virginia dairy producer, began farming without a farming background. Today, he has earned the confidence of 200 customers who pay him $28 per month for a gallon of milk per week. (Progressive Farmer photo by Deborah R. Huso)

Farming was not a likely path for Nathan Vergin, a 26-year-old dairy producer in Albemarle County, Va. His father worked in information technology in Minnesota. The family owned a few acres, and Vergin enjoyed working with the family's handful of animals. But it was a paying farm job that propelled him into a career. "When I worked full time at a sheep dairy, I realized farming was what I wanted to do," he said.

Today, Vergin manages a herd of 40 dairy cows.

He has 200 consumer-customers who have invested in his cows and who also pay $28 per month to buy a gallon of milk per week. He's reached this early point in his career with no owned land and little debt.

His dream seemed nearly impossible until he happened to hear semi-celebrity organic farmer Joel Salatin, author of "Fields of Farmers," speak. With profitable farming and publishing enterprises, Salatin also runs an internship program for would-be producers on his Polyface Farms, near Swoope, Va. After an interview, Vergin began working on Salatin's farm as an apprentice in 2005. For six years, Vergin learned the ropes of rotational grazing, managing grass-fed-only livestock and farming with minimal infrastructure and equipment. Salatin paid Vergin for his work. Vergin rented the ground from Salatin that allowed him to begin his herd and a cow-share business.

Vergin is not unlike many young farmers who dissociate farming from land ownership. Even so, he is tackling his new enterprise without the support and resources that often come the way of young operators from a farming family. The key to low-resource farming: low costs.

"Land ownership and farming are two different businesses," said Vergin's mentor, Salatin. "When you put the capital cost of land into beginning farming, plus nonportable infrastructure, it becomes cost prohibitive," he explains.

Vergin is now renting 500 acres from a former dairy farmer. The land was an active dairy farm from the 1940s until 2004. Landowner Ben Thomas leases acreage to Vergin at $20 to $40 per acre. Vergin also rents structures from Thomas, including a milking parlor, holding area, shop, equipment shed, free stall and calf barn. Vergin manages Thomas' beef cattle herd as part of the deal and rents equipment from him on an hourly basis.

THE RIGHT DEAL

The arrangement makes it possible for Vergin to farm and, even more importantly, earn a living. "There's 40 acres and a house down the road for sale for $6.5 million," Vergin said, noting that buying land is not even an option for him right now.

He's able to make his small dairy herd pay well by direct-marketing his milk through a cow-share program. Customers pay a $50 annual fee to participate in the cow-share program and then pay $28 per month to get a gallon of milk per week. Customers have the option of picking the milk up from the farm or from delivery locations in the Charlottesville area. Vergin's wife, Amy, typically handles milk deliveries. Vergin counts 200 families in his cow-share program and has a waiting list. He also sells milk to a local cheesemaker. The cows produce about 500 gallons of milk per week.

Vergin's financial investment has been minimal compared to the average farm. He borrowed money from family to buy his starting herd along with some used equipment. He took on some debt to rent acreage from Thomas but said that will be paid off in two years. Vergin's dairy operation supports him and his wife, their three children and an intern.

LOW-COST STRESS

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