Wall Street Journal
The New Gentleman Farmer
The rich and famous are trying their hand at (what else?) organic farming. Can they make a living at it?
For Randy Williams, who maintains a small, organically oriented farm, finding a profitable marketplace for what he grows has been a challenge. ‘How the hell do people do this for a living?’ he asks. Photograph by Sam Comen for WSJ.Money
SANDY LERNER IS HAVING A FIELD DAY—in the worst possible sense.
It’s late afternoon on a Friday, but Lerner, the 58-year-old tech pioneer who co-founded Cisco Systems, CSCO +0.62% is still working, driving her Range Rover around the pastures and barns that make up her 800-acre Ayrshire Farm in Upperville, Va. She is trying to come to terms with the fact that the grass is growing a little too fast. The potential consequence: Her cattle—all heritage varieties that represent the best of what American and European farmers raised in the era before Big Agriculture and factory farming took over—might eventually find it too “stemmy” to chew (far from good eats, that is). Grass that gets too tall and prickly can also poke a cow in the eye.
Photos: The Economics of Organic Farming
Click to view slideshow Photograph by Sam Comen for WSJ.Money
So, Lerner, whose brusque, no-nonsense manner could be seen as a carryover from her days making it to the top of the male-dominated tech world of the ’80s, is giving orders over her cellphone. She’s looking to ensure that some of her 100 farm employees shift the cattle to areas where a little natural lawn maintenance—normal grazing, in other words—is in order. “I’d sure like something to eat it,” she says in frustration to an Ayrshire manager about one problematic patch. A minute later, she ends the call and puts the problem—just one of many she’ll call to her staff’s attention that afternoon—into broader perspective: “I call it ‘farming stupid,’ ” says the entrepreneur.
If Lerner seems a little intense about all this, it’s because she sees her breed of farming as almost a calling. You’ve heard of organic farming, but Lerner is both certified organic (a USDA designation since 2002) and Certified Humane® (a nongovernmental designation that means her animals have been raised with proper shelter and resting areas, among other requirements). She has also done her own research to uncover how natural substances, such as turpentine, can help with various tasks on the farm. And she serves much of what she raises at a local gourmet market and a restaurant she owns.
The nation is in the middle of an organic-food boom, and in case you haven’t noticed, a surprising number of boldface names are becoming part of it. That includes Oprah Winfrey, who is growing kale, carrots and more than 60 other varieties of vegetables, fruits and herbs on her organic farm on the Hawaiian island of Maui, as well as comedian Roseanne Barr, who is growing macadamia nuts and produce on her organic farm on Hawaii’s Big Island. Fashion-world honchos George Malkemus and Anthony Yurgaitis—president and vice president, respectively, of designer shoe brand Manolo Blahnik—have a dairy farm in Litchfield, Conn., where the 325 cows are pasture-fed (at least when the weather allows; otherwise, they are given a special diet of high-quality hay and a premium feed). Even Warren Buffett has gotten in on the act in an indirect way: His son Howard has more than 10,000 acres, split between the U.S. and South Africa, under his watch. Though the farms are not organic, they exist largely for a humanitarian purpose—namely, to promote sustainable agriculture. Plus, Howard Buffett is an advocate of many practices focused on soil conservation.
Sandy Lerner helped start the tech giant Cisco. now, she manages 100 workers—on a farm. Photograph by Sam Comen for WSJ.Money
This gentleman’s farming—or gentlewoman’s farming—movement has spawned its own lifestyle brand. Meet the Beekman Boys: advertising executive and author Josh Kilmer-Purcell, and physician and former Martha Stewart Omnimedia executive Brent Ridge. The couple purchased the historic Beekman 1802 property in the upstate New York burg of Sharon Springs six years ago, transforming it into a working, organically oriented farm that’s also the focal point of a media and merchandising empire. Their enterprise runs the gamut from an emporium near the farm that sells goat cheese and throw pillows to a city slickers-gone-country reality series, “The Fabulous Beekman Boys,” that has aired on Planet Green and the Cooking Channel. But it’s all still farming, says “Beekman boy” Ridge. More to the point, it’s farming that speaks to a back-to-the-land ideal that’s common among today’s crop of well-heeled farmers. “We need to pay attention to things that are real and tangible,” Ridge says.
But the good intentions of these type-A types notwithstanding, the economics of organic farming are a potential blow to their fairly large egos. These are individuals with scores of successes in life, but experts say that despite the price premiums that come with organic labeling or other likeminded practices, the math doesn’t always work out. It is just too expensive to do. For that matter, almost all farming, organic or conventional, is a financial boondoggle when it’s outside the realm of factory farming. The median projected income of the American farm in 2013? It’s actually a loss of roughly $2,300, according to the U.S. Department of Agriculture. Is it any wonder that—the organic boom notwithstanding—the number of farms in the U.S. has been on a dramatic decline, from a high of nearly 7 million in the 1930s to 2.2 million today?
WHILE IT’S TRUE THAT few gentleman farmers are in it to get rich, most say they would like to see their operations succeed financially, if only to show the world that the farming methods they’ve embraced have broader merit. It is an issue of great concern to Lerner, who initially made her fortune through Cisco (she parted ways with the computer giant in 1990, earning a payday in excess of $150 million, split with her business partner) and Urban Decay, a cosmetics brand that she also co-founded, back in 1996. Having grown up on a California farm, Lerner balks at the idea of agriculture as mere hobby. She purchased the Ayrshire farm, which has roots going back to the 1800s, for $7 million in 1996, and says she built it into a sophisticated organic operation for a reason. “I wanted to find out how to raise the best possible food and see if there was a combination of methods that would allow it to be a good model for other small farms,” she says.
“ The economics of organic farming can be a blow to some type-A egos. ”
So far, Lerner has put plenty of tasty beef on people’s plates. And pork, chicken and turkey as well; she has raised a whole host of animals. She sells her meat mainly through the Home Farm Store, the local gourmet market she owns, or she features it at her English-style restaurant, the Hunter’s Head Tavern, which is located close to the Ayrshire property. But by Lerner’s own admission, she has yet to turn a profit on her $7 million-a-year business, which includes two additional farms in the area, bringing her total acreage to 1,200. And at times, it seems she is consciously running it as a nonprofit entity, especially given the considerable time and energy she devotes to research on organic farming practices. (Her latest studies have indeed focused on turpentine as an organic-friendly substance—it comes from trees—for ridding cattle of intestinal worms.) Except that Lerner, who won’t reveal the extent of her financial losses, refuses to give up.
“Nobody will take you seriously” if you’re not running in the black, says the woman who’s done pretty much every task on her farm, which includes overseeing the restoration of a 17,000-square-foot estate that came with the property as well as tending to a newborn calf. It’s as if Ayrshire has become more than a business proposition for Lerner; it’s become an addiction. “Farming needs a 12-step program,” says Lerner.
Williams is a Houston-based bankruptcy attorney who, on the side, also hawks his farm-fresh eggs—at his law firm. Photograph by Sam Comen for WSJ.Money
LERNER WILL BE the first to admit that what she’s doing is hardly novel: The tradition of gentleman’s farming dates back at least three centuries, evolving in England as a kind of backyard science for those with estates to enjoy and time to spare. Here in the U.S., several of the founding fathers heeded the call to farm, including George Washington who, as a man of wealth, stature and vision, took pains to try new ways to rotate crops and keep his soil healthy. But as Lerner says, gentleman’s farming was also something of an ego play, the yesteryear equivalent of driving the fastest car on the block. “That’s how man defined manliness back in those days,” she says. “Did you have the prize pig? Did you have the prize cow? How about your peaches?”
Today, the gentleman’s farming movement has found its niche once again by dovetailing with the organic movement. To hear organic advocates tell it, it’s because mainstream agriculture has indeed become about the megafarm that relies on pesticides in the fields, antibiotics and growth hormones in the barns, and government subsidies to sustain the whole operation (since 1995, $256 billion in subsidies have gone to farms, mostly of the large-scale variety, according to the Environmental Working Group). That has made room for organic farming, which is typically done on a smaller scale with little to no government support, as an alternative. But because organic farming can be so expensive, it’s not a model that everyone can adopt.
Enter those who embrace the organic movement’s environmental and health-conscious ideals—many come to growing organic after “going organic” because of dietary concerns—and who can afford the price of admission, so to speak. And if they relish a good challenge, that’s all the better. “I think these gentleman farmers go into it because it’s a bigger challenge than the business world they’ve been in,” says Mark Faust, a growth-management consultant who has worked extensively with executives who farm on the side—and who drive an F150 or a Lamborghini or, just as likely, both, he adds.
With organic farming, there’s an issue of scale that makes turning a profit hard. In myriad ways, conventional factory farms benefit economically by virtue of their size; not just by purchasing feed and seed in volume, but also in handling pest and weed control. For example, on an organic farm, weeding can be far more labor intensive because it can involve actual weeding. And crops can wither due to one problem or another, with no jug of Roundup to remedy the situation.
Steve Kettelle, the successful real-estate broker, grows more than 35 different crops. Photograph by Sam Comen for WSJ.Money
“We had a late-season blight which consumed an entire potato crop.…It can happen in a day,” says Steve Kettelle, a successful Florida real-estate broker who started a certified-organic farm in Pine City, N.Y., after partially getting out of the business before the bust. Kettelle has learned over time to maintain a good diversity of crops in case one fails, which they inevitably do. He considers himself a success story in that he’s in the black with his roughly five acres of produce, but he concedes if he factored the time he puts into his plot, his hourly earnings “would probably be below minimum wage.”
Other farmers face other obstacles, from the sheer time and paperwork involved in becoming certified organic to finding a profitable marketplace for what they grow. The latter is an issue that particularly vexes Randy Williams, a Houston bankruptcy attorney who maintains a small, organically oriented farm about 10 miles from his home. From a production standpoint, he’s done relatively well with his egg-laying chickens, lettuce crops, dairy goats, and fruit and nut trees. But volume to him is just dozens of heads of lettuce, so he has to peddle his produce at a local farmers market or hawk his farm-fresh eggs at his law firm. “How the hell do people do this for a living?” asks Williams, who admits to losing a couple thousand dollars a year on the farm.
For Lerner, the main issues are, well, all of the above. She struggles with scale and the fact that supplies for an organic farm tend to be costlier. “My feed is three to five times more expensive,” she says. She struggles with finding buyers for her products, especially since organic beef can be very pricey to produce—and there’s only so much the market can bear. “We already have some steak going for 42 bucks a pound,” she says. And she struggles with the regulations, governmental and otherwise, that define how organic farms must operate, regulations that Lerner says often make little sense or conflict with one another. Those cattle she’s worried about getting poked in the eye by overgrown grass? The concern is that, if a cow contracts pink eye as a result and Lerner treats the animal with antibiotics, it means abandoning the organic label. At the same time, forgoing treatment could be a violation of the humane standard. It’s the sort of Catch-22 dilemma that defines life on the farm, she says.
To be sure, the situation is not so dire for all organic farmers. Many do take full advantage of the premium prices their goods fetch. In fact, a 2011 Iowa State University study found that organic fields with such crops as corn, soybeans, oats and alfalfa had a $200 higher per-acre return compared with conventional fields on the same farm. Also noteworthy is the fact that some organic farms become sizable entities, including the 29-year-old Earthbound Farm, a California-based organic-produce specialist with revenue that tops $500 million. While Earthbound Chief Executive Charlie Sweat notes that he faces some of the same challenges as smaller organic farms, he maintains that the organic model can work if an entrepreneur has the time and patience to understand the discipline. “As you begin to farm organically, you are getting in touch with the soil,” he says. “It’s not something you can jump into overnight.”
“ Lerner has taken steps to save money, including deciding to sell a chunk of her farm. ”
IT’S THE END OF that long Friday on the farm, and Lerner is relaxing in one of the ways she knows best—enjoying a leisurely dinner at her Hunter’s Head Tavern. The restaurant is a bit of merry, old England in rural Virginia, rustic in its evocation of the corner pub, right down to the mismatched chairs and the crowds that congregate noisily just about everywhere. There’s an outdoor seating area for those who like to come with their dogs, and there’s even pet food on the menu. But it retains its connection to the farm: This may be the only neighborhood bar on the planet where the burger you’re served, for $14.50, comes from an animal that was grazing in the fields a mile or so away a few weeks earlier.
Lerner takes pride in what she’s been able to accomplish here, especially given that the locals—a generally upper-crust group; this is horse-and-polo country after all—had initially opposed the tavern as a commercial intrusion. And she’s proud of what she’s been able to do with Ayrshire overall. Even on this festive Friday evening, she’ll talk shop for hours on end—about how America lost touch with its agricultural heritage and about how she claimed a small piece of it back, one cow at a time. (She has approximately 1,200 cows in all.)
But for Lerner, the bottom line is still largely the bottom line. And to that end, she has taken a series of steps to save money, including farming out some of her operations and making adjustments in her meat-packaging operations. Her biggest step of all, though, is deciding to sell a good chunk of the farm. Indeed, some 600 of Ayrshire’s 800 acres are now on the market, replete with the mansion she’s restored. The asking price: $30 million. To many, this might be seen as an acknowledgement that Lerner has ultimately failed in her mission. She prefers to view it as the next step in the evolution of her business. She plans to contract with other organic farmers and continue with Hunter’s Head Tavern and her gourmet market, too. The farm is now more about the “brand,” as she sees it. The actual acreage at Ayrshire may not matter.
Either way, Lerner hasn’t exactly given up on her beloved cattle. Even if she goes through with the sale, she still has 200 acres left for her cows to roam. And as another day at Ayrshire draws to a close, she insists she still has something to prove—if not to the world, then to herself. “I’m a helluva cattle farmer,” she says.