The Modern Farmer

After only two years in business, Nic and

Jen Welty's 9 Bean Rows farm is boasting a

75-percent gross profit margin. Key to

their success? Embracing innovation in an

age-old industry.

By Lynn Geiger

LEELANAU – Nic Welty is the epitome of the modern farmer. His business philosophy – and approach to farming – is a mix of tried and true and new school. It's a combination of hard work and dedication from his Midwestern farming roots and formal education in economics and molecular biology. Not being afraid to take a little gamble every now and then never hurts either.

"I'm a risk-taker at heart, and I'm adventurous with my cash flow models," he says. And it seems to be paying off.

He and wife Jen operate a small farm at their home in Omena, lease additional acreage nearby and also lease bakery and farming space at Black Star Farms in Suttons Bay. The Weltys launched 9 Bean Rows in the fall of 2008 with $20,000 in capital. They began raising specialty veggies to sell to restaurants and at local markets year round and soon added a bakery operation and community-supported agriculture (CSA) program.

Today, 9 Bean Rows is boasting a 75 percent gross profit margin and the couple has aggressive plans to grow the farm. They are looking for a $165,000 investment that will be used to finish building out the infrastructure of its farming operation, including getting all the vegetable products honed in and growing at capacity (only farming two of eight acres of irrigated cropland currently), fertility management and crop cycling.

Hoop house: Farmer's cash cow

How is such a young farm so fruitful? In northern Michigan, the answer is hoop houses. The Weltys have 8,000 square feet of indoor growing space provided by two hoop houses – a type of passive solar greenhouse that allows for nonstop planting and harvesting.

Because solar energy heats the ground, plants are planted right in the ground, unlike in a traditional greenhouse. On those frigid, but beautiful, blue sky days in February, it can push upwards of 80 degrees in the hoop house, warming up from the low 20s first thing in the morning.

"It's amazing what you get off of a small space with indoor farming," says Welty. The harvest from his first plantings in a hoop house shocked him. "I produced as much in this 1/20th of an acre as in my 2.5 acres outside," says Welty. "That's when I knew this is where we want to go."

The next step was to plant of plethora of things to see what turned out to be most profitable. He factored in three things: how many days from planting to harvest, how much he could sell the product for and the total square feet it took up.

The cash crop? "Baby lettuce is extremely profitable but I can't do it all the time," says Welty. "I don't want to overdue it. You've got to know your market and know how far you can stretch it."

These days Welty grows mostly greens in the hoop houses, including lettuce, spinach, swiss chard, kale, mizuna, bok choy and arugula, as well as root vegetables that can be stored and sold over many months.

He just harvested sweet potatoes and that super favorite baby lettuce mix is going in the ground now. "It's all about what can't be grown anywhere else and what's worth the most money," he adds.

Because the Weltys' hoop houses don't have either ventilation or heating systems installed (just rolling the plastic sides up or down depending on the temperature), they are limited by what they can grow, but the flipside is they are incredibly cheap to operate. "The biggest cost is replacing the plastic every four years," Welty says.

Dough for dough

This past summer, 9 Bean Rows' bakery business shot up dramatically, says Welty. Yet, because there are some inefficiences in their current operation "the net profit isn't great."

But, they are working to change that. Much like the year-round CSA model they started a couple of years ago to grow their farming business, they have started a 50-week bread share using the customers money to finance the business. They have a membership goal of 200 members for 2011. Welty figures if they can get between 10 and 20 percent of the $300,000 price tag that way, it can then be matched with a small business loan.

That money will be directly invested in building a new baking facility – as they are outgrowing the space at Black Star – and acquiring a wood-fired specialty bread oven.

"Within a year I'd like to be meeting the demand we have here and doing it much more efficiently," he says.

Small farm franchising?

Long term, Welty is eyeing a farm franchise idea.

"I'm trying to create a 10-acre or less farm model…and take this model to where there's a market. There are 300,000 people in this part of the state. There's no market for a mega-farm."

Welty lists Boulder and Philadelphia as examples of places where he could possibly "buy two to five acres close to a the city and then sell to that market." He would like to use his Leelanau County-based operation as an internship training ground to develop managers for these "mini-farms."

"My philosophy is you need to build a company around high-quality employees, so I'd like to push an internship program here," he says. BN