Skip links

Spring 2019 Newsletter

Dear friends,

This has been a particularly busy spring for FarmLink staff. When many fields were still too wet to work, farmers focused on business needs. We’ve helped execute 12 new lease agreements, with 18 more in progress. We partnered with National Young Farmers Coalition to launch a Land Affordability Calculator whistle stop tour. During March we conducted a four-day FarmLink Business Skills Academy in Petaluma, with 18 farmers enrolled.

Since the beginning of the year, FarmLink’s loan team has closed or approved 26 loans: three business loans greater than $50,000, eleven smaller loans for farm operating costs, and one land loan. We are on track to exceed our lending goal of $5.9 million this year. In January we launched a FarmLink Investment Notes program, for the first time enabling individuals to invest directly in FarmLink’s loan fund. These interest bearing loans to FarmLink range from $1,000 to $150,000 and I invite you to join our growing community of social impact investors – read more below about how to invest in FarmLink’s loan fund to support small farmers and regional food systems. Thank you.

Reggie Knox, Executive Director

Kern Family Farm: Rooted in Community

Kern Family Farm has built a thriving business while maintaining their vision and energy rooted in and devoted to community. This winter Sue and Hansel Kern presented their farm’s journey at our Farm Finance Expo and in an interview with FarmLink, reflecting on what it’s taken to create Kern Family Farm on a mountainside near North Fork, California. Their goal is to achieve a level of financial success that will allow them to pass a strong business on to their children; a family farm now actively supported by FarmLink’s lending.

The Kerns started with raw land nearly 20 years ago, off the electrical grid, with no option to connect to it. They faced the challenge of producing their own power, drilling their own well, and pumping water with their solar arrays. “We are trying to do it as ecologically as you can,” Hansel explained. “One thing we always kind of used as our, you know, excuse for not making a profit, was that we were building infrastructure.”

They’ve been building the mountainside farm step-by-step, and terrace by terrace. starting with one 30 by 100 foot field. Today the certified organic farm operates two acres of row crops on about 40 terraces, has a four-acre dryland hay field, and seven hoop houses that are 2000 square feet each, growing salad greens year-round. 

In North Fork, the farm has an important presence, supporting and engaging the community with their volunteerism and entrepreneurship. Since their adult son Aaron Kern was in second grade Hansel has donated one day per week to building, cultivating, and teaching in the school garden. It’s inspired hundreds of children and influenced how they eat. Now Aaron is taking the lead in refining the farm’s agronomic practices.

Fifteen years ago they started a farm store, the Gnarly Carrot, as an unstaffed honor system in a basement. After a successful $32,000 Indiegogo campaign, they rebuilt North Fork’s most run-down retail building into an attractive storefront that opened in April 2016. The Kerns’ daughter, Rebecca Kern, manages the store which is focused on selling locally sourced goods, mostly organic produce, to support the local economy, as explained on their website.

Over a 15-month period, FarmLink worked with the Kerns to secure a loan to consolidate the debt they had accumulated while establishing the farm, improve their financial situation, and build the foundation for long-term success. Both Rebecca and Aaron want to stay in the family business. Since transitioning from a career as a stone mason in central California, Hansel, in part with Sue’s off-farm income, slowly built the family farm business, but at a cost.

Hansel quipped, “We didn’t go to someone originally and say, ‘We need to spend a quarter million dollars building this farm.’” Now Sue and Hansel look back with gratitude and acknowledgement of key lessons learned along the way. As they developed their farm and home off the grid, Hansel bought infrastructure and equipment when he found great deals, not necessarily when they had the cash to do so. Sue reflected that, “We hadn’t done the thing about writing a business plan first, getting a loan for the infrastructure, and then paying back the loan. So we went forward,” and Hansel added, “and then a little bit in reverse.”

When they approached FarmLink the Kerns’ financial goal was to consolidate debt. Over the years they had taken advantage of interest-free credit card offers, and rotated from one to another. Ultimately, however, it could not be sustained. Sue explained, “I thought because I had a regular income that it would be enough to qualify for the loan. And when we found out that Farmlink really wanted us to have the business be able to pay back the loan, as opposed to my income, we got denied. And to me, it was kind of devastating.” She added, “But they worked it through with us to have the store start to pay more and more of the bills.”

“It was not really the normal (laughs) way of going about getting a loan,” said Hansel. “FarmLink helped us get all the paperwork together. But then they looked at the bottom line and it was the fact that our business, the farm and the store, weren’t actually paying the bills. They did a really good job of holding our hand as far as getting the things done that we needed to get done.” Sue added, “We had to basically stop spending more than we had.”

Their journey to manage the debt had taken several turns. “We tried a couple of other avenues first. Our own credit union. Our own banks. I mean, we got turned down quickly,” explained Hansel, “Farmlink had the patience, I think that’s the biggest value to me…I observed that they were pulling for us, you know, all the way. And they were like, ‘Man, we’re gonna help you understand what it will take to get this loan.’”

Sue and Hansel explained that by working with FarmLink, they’ve become more professional about their business plan, and their daughter Rebecca is now doing all the books including consistent profit and loss statements. They’re tracking sales in a more timely manner, and working toward one day starting a certified dairy to be able to sell their farmstead cheese.

Today the Kerns report that the store more than tripled its gross sales from their starting point, now exceeding $300,000. The farm’s production is up 30% due to Aaron’s work with no-till practices and intensive plantings. Hansel relishes in sharing the family’s progress. He says that Aaron has already become a better farmer than he ever was, and Rebecca has become a great bookkeeper. “We’re blessed to be a true family farm,” he says.

The Kerns can now envision their long-term financial picture for the farm and retail business. “It’s starting to seem like the farm and the store are making a profit to the point where both of our kids could eventually make a living out of it,” said Sue.

Farm business education: forging new partnerships statewide

Through the winter and early spring, in tandem with several partner organizations, FarmLink shared its farm business training and resources with farmers across the state. The events started in San Diego County in December where FarmLink participated in a two-day learning and networking event, “Fundamentals: Land & Water,” organized by the National Young Farmers Coalition (NYFC). It was an opportunity to discuss tools, decision frameworks, and the personal and professional networks necessary for assessing farmland, as well as the water resources available.

In February, FarmLink and NYFC launched a statewide tour of five “Finding Farmland Workshops,” stretching from San Diego County to Mendocino County, with more than 120 farmers in attendance. In the workshops, detailed in this post by Michael Parker, NYFC’s Land Access Program Associate, farmers were introduced and oriented to the Finding Farmland Calculator and discussed the costs associated with acquiring farmland, creating a strategy for establishing secure and affordable land tenure, and financing options for purchasing farmland. While many farmers dream of owning their own land, the purchase process can be intimidating and costly. These workshops aimed to de-mystify that process and break down the costs and financing options available, working to make the land loan process more accessible. FarmLink’s financing for land purchases often results in a blend of loan sources, including the USDA Farm Service Agency’s Farm Ownership Loans. Since beginning our land loan program, FarmLink has provided 16 farm purchase loans totaling $6.3 million.

The annual FarmLink Farm Finance Expo continued the season on February 28 in Clovis. FarmLink hosts this annual event to provide “one-stop shopping” for farmers interested in exploring a loan for their business. Given the difficulty of finding lenders who will work with independent growers, this event aims to show farmers and ranchers all of the local financing options available to their farm businesses to empower them to make informed financial decisions that best fit their business. The event offered local farmers the opportunity to meet representatives of ten farm lending institutions and participate in workshops and discussions.

Local technical assistance providers, such as the Fresno Area Hispanic Foundation, presented on ways to prepare for the financing process and how to establish a farm business. The day’s agenda was punctuated by poignant stories from farmers as they reflected on their farm’s growth and the financial challenges along the way. For example, Dwayne Cardoza, Dwayne A Cardoza Ranches and Vernon Peterson, Abundant Harvest Organics both shared how their businesses grew over the years, and the choices they made along the way to assure sustainable business models to carry them forward for the long-term. Sue and Hansel Kern, whose family farm story is featured in this newsletter, shared their story with heartfelt expressions of the stress and rewards that have brought them to a place where they can foresee passing the business on to their children.

The Expo program was supported with language interpretation for Hmong and Spanish speakers, and included sessions on topics such as Business Formation and Record Keeping, Enterprise Analysis, Getting Comfortable with Financing, and Preparing to Purchase or Sell the Land or the Business. Blong Lee, a longtime Fresno-area economic development leader, shared a closing keynote address outlining the urgency, as well as challenges and opportunities, in expanding FarmLink’s lending and land tenure assistance for farmers in the San Joaquin Valley.

During the month of March, we conducted the second FarmLink Business Skills Academy, a series of four weekly workshops based on our Business Health Assessment, with participation by 18 farmers and ranchers from the North Bay region. In this intensive course, participants dove deep into their record keeping and accounting practices, honed their short and long term business goals, and are able to take advantage of additional one-on-one consulting with course co-instructor Poppy Davis. Feedback from farmers included, “I am [now] more excited to really prioritize my books and long-term wealth for my business. It feels much more doable after taking this class,” and “If you want clarity as a legitimate business owner (farmer) you need to learn as much as you can.”We look forward to continuing these types of workshops in the years ahead. Next up is a webinar that we’ll conduct in partnership with CCOF, entitled “Pathways to Farm Ownership,” which will be held on Tuesday, May 21 from 12:00 – 1:30 pm. Click here to learn more and register for this event, and stay tuned for another robust workshop season next winter.

Farm Credit: Rainmaker Sponsor of the Farm Finance Expo

Once again this year we’re honored that Farm Credit as a Rainmaker sponsor of the Farm Finance Expo through its Farm Credit Alliance. The Alliance consists of cooperatively owned lenders American AgCredit, CoBank, Farm Credit West, Fresno Madera Farm Credit and Golden State Farm Credit. These organizations are part of the nationwide Farm Credit System with a mission is to provide agriculture and rural America with dependable sources of credit. Participating in the Farm Finance Expo this year was Farm Credit West, represented by Alyse O’Neill and Kevin Layne.

For nearly two decades, Farm Credit has been working closely with Young, Beginning and Small (YBS) Farmers. Each local Farm Credit has YBS-specific programs and services, and we encourage farmers and ranchers to connect with them and explore options. We’re grateful for Farm Credit’s support and look forward to continued collaboration to invest in the future of California agriculture.

Welcome, Blanca

Blanca Mendoza started her work at California FarmLink in March 2019 following more than 20 years in the financial services and housing sectors in Santa Cruz County. Born in Mexico and raised in Watsonville, both of her parents worked in local agriculture, primarily harvesting celery and strawberries. She earned an Associate’s degree in Computer Applications at Heald College and started her career working with real estate lending at Community Bank of Central California (now Rabobank, N.A.).She continued working in the field of real estate at other financial institutions as well as title companies, and in 2009 started working at the Housing Authority of the County of Santa Cruz, where she assisted tenants and landlords with the Housing Choice Voucher (Section 8) program. Blanca remained interested in the financial services industry and when she saw a career opportunity with FarmLink, was intrigued by our work with farmers. We’re thrilled that Blanca has joined FarmLink’s team as a Loan Operations Associate!  She will play a key role in the expansion of our lending program, supporting loan documentation and servicing.

We appreciate the support of these generous sponsors of the 2019 Farm Finance Expo. Thank you!

Return to top of page