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Owning vs. leasing: an interview with Graham of Pastures of Plenty Farm

Graham Mallory and Emily Stone own Pastures of Plenty in Jackson, Maine. They currently provide pasture-raised beef and pork to their customers and Emily has started a sheep flock that will provide both fiber and meat. Eventually they plan to raise broilers as well. For years they operated exclusively on leased land and now are in the process of transitioning onto their own, recently acquired land. Jo Barrett, Land For Good’s Maine Field Agent, interviewed Graham about land ownership in February, 2014.

Graham fencing (photo credit: Pastures of Plenty)

Land For Good (LFG): When did you and Emily decide you were ready for ownership?

Graham Mallory: Mmmm… before we even started farming. Ready? I wanted to own a farm when we were both apprenticing and fell in love with the lifestyle. In terms of being ready, you never really are but we wanted to give it a shot. We started out leasing because it is hard to find land to buy that meets your needs and is available, etc. As soon as we started leasing land and farming – within a few months of that – we started looking at land. We even checked real estate listings and looked at land when we were apprenticing just to see what we could do there in terms of farming, living, raising a family. We took location and money into account as we started honing our vision by narrowing down what we wanted in a piece of land. The land we ended up with was not ready to farm at all but we could visualize a process to end up with exactly what we wanted over the years. We could afford it. We could have pursued land that had a house and barn but that was not available at a price we could afford. We could have waited and built relationships and seen if something more ready for farming came along. It’s a lot of security for us to have a place that is our own. Part of having wooded land was that we could sell wood to finance building the house, building a driveway, putting up permanent fencing. Not sure if we were ready but we just went with what was possible.

LFG: Given that you’d had great success leasing grazing land, how did you decide that you wanted to own land?

GM: We didn’t have great success. We had modest success and also strife. This drove us to want our own land sooner. The uncertainty and always worrying about losing use of the land. Always having to work with the landowner to maintain a relationship. We do have some really good leasing situations but that’s not what I want my whole life to be. I want to know that our own land is always available to us and that the effort and work that we put into it will always be there. There are ways of extracting value from a lease but it is transient value. I want for our work to be growing something for us that’s more permanent.

LFG: Compare the pros & cons of leasing vs. ownership.

GM: Leasing can be a fast way to start farming. It is easier to find good pasture, set up a lease and put animals on it – much faster than going through the purchasing process and then setting up all the necessary infrastructure. Some of our leased land has had a corral and barn and it was ready to go after some fence repair. If that piece had been for sale, and we had to purchase it, that would have been a slow process. Often, land that is available is not set up in a way that works for our operation. That’s why we continue to lease: because our business is growing faster than our ability to develop our own land. I can see a time when it is no longer practical to lease land but we may always lease because once we’re doing all my pasturing on my own land we may want to lease hay land.

LFG: How did you and Emily go about preparing for financing?

GM: We just talked to everybody we could about it. It was the first loan we ever took out. I quizzed friends and family, called all the banks to see who had the best rates. We were fortunate that we had a family member who was willing to co-sign. It turns out that we had enough of a down payment so that cosigning was unnecessary. I feel very luck that we could get a loan. One was a personal loan from a friend and the rest came from a bank. We have a lot of long-term debt now but for some people, it is hard to get the money in the first place. Another lucky thing is that we got our loan when interest rates were rock bottom and it is at fixed interest rate.

LFG: How did you go about choosing a piece of land?

GM: We drove around with a Gazetteer and soils maps. That was a fun process. After we had explored quite a bit and by the time we were farming for ourselves we already knew what was out there. We knew that we couldn’t afford to buy a ready-to-use farm and that we had to look at neglected land. We looked for an opportunity to make something of a piece that was being neglected or ignored. Our place was listed with a realtor and was in a good area for us. We wanted a pretty big chunk of land. Its history was as a farm and the soils are good. The wooded nature of it gave us the idea to make money off it as we worked to clear pasture and get that value out of it. I had learned about logging and knew that there was a lot of opportunity in our land. A friend and mentor was able to tell me about the opportunities and dangers and help me decide what to do. It was really important to have this mentor. Reclaiming abandoned farmland is really a fun idea for me. Noticing what new wildlife comes in, watching the changes in water movement, clearing back to the old stone walls; it is all really fun. But, it was the dollars and cents that started it all.

LFG: What pitfalls did you encounter?

GM: Actually, leasing land, raising animals and marketing have all been full of pitfalls but buying our land really hasn’t been. We still have to have a survey in order to know where all our property lines are. There has been some animosity from neighbors because they don’t want to see things change. Ours is a huge piece of land that has been in their backyards, so seeing someone come make use of it now seems to have jarred them. On the other hand there have already been people who remember our place in the 1930s and others are glad to see us bringing it back. Some think the landscape that we are creating is beautiful and have responded positively to it.

LFG: Describe the state of your land when you bought it and what you’ve been able to do with it since then.

GM: It was all wooded and had no infrastructure of any kind. No buildings, fences, etc. The land had been growing back to woods since the 1940-50s. It had been logged since then and there was little of any great value. It was kind of a junky woodlot. Its only value was as biomass, which is what we’ve been selling, for electrical generation. It was totally neglected by an out of state owner who’d only sold wood off of it. It wasn’t ruined though. We bought it in March and by the end of that month we were already harvesting trees and chipping them for biomass. I was going around flagging trees that were to be left and as soon as the biomass operation was done in a given area I’d fence it. We brought in round bales of hay and brought our yearling cattle and our pigs. They spent the year grazing on the regeneration sprouting from the wood harvest. Our finishing cattle were all on higher quality, leased land but the yearlings and pigs did well on this recently harvested land. We built a hoop house and used it for storing tools and grass seed. We put the stock in right after it was cut over. I moved the hogs to new ground every three days and seeded behind them. Once they’ve worked up a piece it gets seeded – that’s their role. Now we’ve done site work for the house and our driveway is in. We’ve been there 11 months and that’s how far we’ve gotten. We’ve cleared 25A to date and soon we’ll clear another 50.

LFG: What is your long-term plan for it?

GM: Getting a house built, moving over there, building a barn, getting the newest 50A of pasture established. None of that is long term but once we are living there I’ll feel like we’ve done it!

LFG: Will you continue to lease land in the future?

GM: Yes as I said before, we’ll probably use leased land for hay, once we have adequate pasture. The main reason we will still lease land for pasture over the next few years, even though we own land, is our pastures are not of finishing quality. They provide suitable nourishment for growing youngster cattle but not enough easily digestible nutrients to fatten cattle. We are 100% grassfed on our beef so buying in grain is not an option. For these reasons we have sought to lease high quality pasture particularly during the spring fattening period.

We had been in negotiation with a nearby farmer about using his pastures. He was eager to let us use them for free if we would share the cost of fencing and install the fence. This initially seemed like a good deal to me, especially because his farm is located halfway between where we live and our land where we farm. He had also put a fair amount into his fields, and they were certified organic. After checking out his land though, I realized that the size and shape of his pastures made it a very difficult and expensive fencing job, at least two weeks of labor and $600 out of pocket from us. At the same time, we sold out of beef from the previous year and began contemplating how we could raise more next year when we only have ten head that are ready to fatten this spring. This got me looking at the option of buying in high quality alfalfa haylage to feed our yearlings at our own place to perhaps get them to finish by late fall. The haylage would be a free-choice supplement to the rough pastures we are creating. It occurred to me that we could do this with our fattening cattle too. It would mean spending a decent chunk of money on the hay, but it also meant keeping the cattle at home so all of our animals would be in one place and we’d be importing all the fertility in the haylage onto my land. The cost of the haylage was very similar to what we would spend to fence this other land so it was basically a no-brainer to keep the cattle at home.

Shortly after that I was contacted by a landowner from whom we leased last year. He is now selling his land so I had assumed another lease was out of the question. I was also loath to spend another season driving 25 minutes each way to check on the cattle and shift their pasture. But it turns out that he really wants the cattle there, as he thinks it will help him sell the land quickly and for a higher price. He even offered to compensate us for travel if we would use the land. It is already mostly fenced and I know the pastures are quite good, likely even better after the good grazing we practiced there last year. And I love the idea of using farming to raise the value of land. But when I did the math to see what it would cost to drive there I found that just the mileage on my car came to $1,600 over the course of the grazing season. To buy alfalfa haylage and keep the animals on our land would probably be about $3,000. Keeping the cattle at home would save us huge amounts of time, import huge amounts of fertility onto our land, and lower the risk of something happening to our animals when we aren’t around to deal with it. But cash is tight right now and paying all that money for the haylage is a little daunting. So I wrote the landowner and told him we’d do it for $1,600 but for any less it wasn’t worth it to us. It’s been a couple weeks and he hasn’t written back yet.

LFG: What advice would you give beginning farmers in terms ownership?

GM: Everybody’s situation is different but instead of looking for your ideal situation, look for something you can add value to; once I shifted my focus in that direction, getting this place was possible.

LFG: What advice regarding the purchasing process?

GM: The Gazeteer & soil map project taught me a lot about the lay of the land in our entire county and I got so I knew what the soils would be like just by looking at land. I learned how the water moved. Other than that, just ask a lot of questions; never hesitate to ask. Seek help from mentors and service providers. Get in MOFGA’s Journey Person program.

LFG: Any last thoughts?

GM: The more you study your situation the more surprised you can be when your own assumptions turn out to be wrong. I started farming with the idea that hay is the enemy because it is expensive, and leasing is wonderful because it is affordable. But the real costs of farming other people’s land are not insignificant, and now that we own our own land, it is harder and harder to justify. I am truly shocked that someone is offering to pay me to farm his land yet it just doesn’t seem like a very good deal. But there it is.

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