Kate Debs

Joe Newman
mightysoilfarm@gmail.com
(906) 439-5770
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Contents

Executive Summary ---------------------------------------------------------------------- 3

Company Description -------------------------------------------------------------------- 4

Market Analysis --------------------------------------------------------------------------- 4

Organization and Management ------------------------------------------------------- 7

Product Line -------------------------------------------------------------------------------- 8

Marketing and Sales Strategy --------------------------------------------------------- 8

Funding Request -------------------------------------------------------------------------12

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Executive Summary

Mighty Soil Farm, a partnership between Kate Debs and Joe Newman, is a diversified vegetable
farm operating on .75 acres of land at The North Farm in Chatham Michigan. Our experience
apprenticing on small, organic farms in Michigan and Vermont, and managing a farm together in
Vermont left us uniquely prepared to succeed on our own. Our first two years running Mighty
Soil Farm illustrated our ability to adapt what we learned elsewhere to this area, as well as our
ability to design, manage, run, and grow a farm business.

Our mission is to provide healthy food to our local community using sustainable farming practices
that promote and maintain soil health. Our primary goals, which will help us fulfill our mission,
include the following:

1) Build soil health using the most sustainable practices possible, working towards a
closed-loop system (knowing that we may never completely close it)
2) Provide nutrient dense, beautiful produce to our local community
3) Have fresh and stored produce available for purchase year round, helping our community eat
locally even in winter months

We have established a solid customer base through direct sales at farmers markets,
wholesaling at multiple grocery stores and restaurants, and a CSA program that is one of a kind
in our area. We have focused on expanding to markets that have not been explored at all or
very much by the farmers here before us: Family Fare in Munising, the Chatham Co-op, and a
new Wednesday evening farmers market we worked with fellow farmers to establish in 2019.
Our customers appreciate the diversity of what we grow, the consistently high quality and
cleanliness of our produce, our branding, and the enthusiasm we have for what we do. We set
our prices near the upper end of the local going rate, which we feel reflects the level of quality of
what we produce.

We primarily market our products through social media and on our website. We distribute
brochures for our CSA throughout the Central UP in late winter. Consistent, weekly phone calls,
texts, and emails with wholesale buyers have kept our products on grocery store shelves and in
restaurants, and the quality of our products has led buyers to wish to expand their purchasing
from us.

We planned for around 37% growth from 2018 to 2019, and instead grew by 93%. We expect to
continue to increase gross sales while at the North Farm by growing more high value items,
increasing speed of bed turnover, using tools that increase efficiency, optimizing irrigation, and
shoring up our field against deer and other animals. In 2020 we will seek funding through the
FSA and other lenders to purchase land, and by 2023 we will have the infrastructure we need to
smoothly transition our farm operation away from The North Farm.
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We aim by 2025 to exceed $100,000 in gross sales without employees, and plan to do this
mostly through expanding our sales in the winter months. By 2025 we will have at least two
hoop houses, and will grow greens for fresh harvest through the winter. Along with these
greens, we will have a significant amount of storage crops, as well as an indoor microgreens
operation, all of which will allow us to extend our CSA year round and keep our products on
grocery store shelves year round.

Company Description

Mighty Soil Farm (MSF) began in 2018 as a partnership owned in equal parts by Kate Debs and
Joe Newman. We grow on about .75 acres of land leased from The North Farm in Chatham
Michigan. We sell directly to consumers through farmers markets in Marquette and Munising.
We wholesale produce to the Marquette Food Co-op, Econo Foods in Marquette, Family Fare in
Munising, the Chatham Co-op, The Delft Bistro, and Falling Rock Cafe. We also started a small
CSA in the 2019 growing season, and will expand it in 2020. Our experience apprenticing on
other small, organic farms, as well as our experience working in food cooperatives has given us
a competitive advantage. However, one of our core beliefs is that we are not in competition with
the rest of the small farm community, but that the small farm community as a whole is in
competition with big ag. To that end, while we have certainly affected sales for other small farms
in our area at farmers markets, we have focused on opening new markets and filling gaps in
existing markets.

Market Analysis

Industry Description
The organic and local food industry provides consumers with healthy food grown close to their
home. Consumers can be assured that their food was grown without the use of harmful
chemicals and with the health of the consumer as well as the surrounding environment in mind.
In recent years, consumers have become more conscious about the origins and effects of their
food purchases, and as a result the organic and local industries have seen a surge in growth.

In 2015, Americans spent 10.5% more than the year before on organic fruits and vegetables,
bumping the total spent up to $14.4 billion. The organic market as a whole is growing fast,
claiming an increase of almost 300% between 2002 and 2015. Organic now accounts for 13%
of produce sold in the US. The global organic food market is expected to grow by more than
16% between 2015 and 2020. Despite this growth, supply can not keep up with consumer
demand, making this a prime time to enter the market. Consumers are also demanding more
local options. Local food sales increased from $5 billion in 2008 to $12 billion in 2014.
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Looking more closely at the UP and the Marquette area we see a thriving local food economy
with new opportunities continuing to open up. In addition to the long running Downtown
Marquette Farmers Market which attracts over 2,000 customers every week, in 2019 a new
farmers market opened in Marquette on Wednesday evenings. We received a lot of feedback
from customers who are not able or willing to come into town on Saturdays and were pleased to
have an alternative day to purchase directly from farmers. It will take a few years for this market
to reach its potential and become a part of consumers weekly routines, but it will build on itself
year after year.

Being a mostly rural area, the UP is a little late to adopt national trends, but enthusiasm for local
and organic is growing here. The Marquette Food Co-op has been a staple of the community for
more than 40 years and is the biggest wholesale purchaser of local food in the area. Building
upon that base, many grocery stores and restaurants are just beginning to see the marketing
potential in local and organic food and finding that their customers are willing to pay more for a
quality product that was grown nearby. In addition, stores who try local products are pleased to
discover that products last much longer on the shelf with little to no loss. And with the overhaul
of The UP Food Exchange in 2019, buying from small producers is easier than ever. The UP
Food Exchange is an online platform that allows wholesale purchasers to buy from many farms
at once, making the process much more streamlined on both ends.

Thanks in part to the Pure Michigan campaign, tourism to the UP has increased in the past few
years. In 2017, over 700,000 tourists visited Munising and spent $33 million in the area. Tourists
have to eat, and with many of them camping and a rise in accommodations, such as Airbnb,
that provide kitchens, they are more likely to buy unprocessed food for cooking. We see many
tourists at the Munising Farmers Market who are used to eating local or organic at home and
excited to support farmers on their travels. There is also a huge opportunity to capture this
demographic through restaurants and grocery stores, where consumers are becoming more
attuned to sourcing.

Target Market
Our customers believe in the superior quality and freshness of locally and sustainably grown
vegetables. They have at least some awareness of the costs associated with producing food in
a sustainable, ethical manner, and are willing to support those values with their money. They are
weekly farmers market shoppers and enjoy the personal nature of buying directly from farmers
and producers. Our customers place high value on home cooked meals and healthy eating.
Some of them are professional chefs who know that high quality ingredients are needed for high
quality meals. Others are produce buyers for grocery stores who appreciate a local product for
its freshness from the field and the long shelf life that follows, along with the professional,
consistent packaging we use.
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Pricing

For direct sales at farmers markets we set our prices after looking at what other farmers sell a
similar product for, what that product sells for at our local grocery stores, and what the Park
Slope Co-op in Brooklyn, NY lists on their website. We look at these markers and set our price
as high as we can. As J.M. Fortier, author of The Market Gardener, says, “If no one is
complaining about your prices, they’re too low.”

For grocery store wholesale pricing we typically multiply our retail price by .7. The average
markup in a produce department is 40%, so if we want a grocery store to charge close to what
we do at market, multiplying our retail by .7 means that a 40% markup will bring the shelf price
back to our retail price. For example, we charge $2.50/lb for beets at market, 2.5 x .7 = 1.75 (our
wholesale price), 1.75 x 1.4 = 2.45, and stores typically charge $2.49/lb for our beets, meaning
customers familiar with us can find our produce for similar prices no matter where they get it.
We do adjust this calculation depending on the going rate for products at a store, but only if the
going rate at a grocery store is much higher than the going rate at the farmers market. For
example, the most we can currently expect to sell 5oz bags of salad for at market is $3.50, but
the going rate at grocery stores ranges from $4.29-$4.99, so we adjust our wholesale price
accordingly.

For our CSA we offer a discount off of retail. Our CSA is not a typical box CSA, but instead a
free choice CSA, where customers have paid for a certain amount of “items” per week, and pick
up whatever produce they prefer at the farmers market. All of our signs at market have both a
price in dollars, and an item value. Bunches of kale, heads of lettuce, and bags of salad are
examples of single items, while herb bunches are half items. Pints of cherry tomatoes or snap
peas are an item and a half. Customers sign up for 4, 7, or 10 items per week, and can add up
to that item amount whatever way they wish. Our goal with pricing for the CSA is to hit
somewhere between wholesale and retail prices, and closer to the retail side. It’s not as easy to
calculate the exact discount given to customers off of retail as it would be if we did a set box,
because if someone only ever takes half-items, they’re actually getting a much bigger discount
than if they only ever take single items. We’re more than happy to give discounts to customers
willing to invest in our farm early in the season, committing to our produce for anywhere from
eight to twenty-six weeks.

Competitive Analysis

Our biggest competition is cheap, conventional produce available 24/7 at grocery stores. The
majority of consumers purchase their food entirely from supermarkets. It may appear that other
farmers at market are our biggest competition, but taking business from them will only hurt us in
the long run. Making sure that local produce is available alongside national produce at
supermarkets, and on menus in local restaurants, we capture dollars in the local food economy
that would otherwise never have been there. Less immediate competition includes companies
like Hello Fresh and Blue Apron, whose pre-portioned, delivered meal kits represent perhaps
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the easiest way for people to eat decent, home cooked meals. Barriers to success include the
short growing season, forcing us to grow and harvest the majority of our food in four to five
months every year, and the small population of the Upper Peninsula.

SWOT Analysis

Strengths Weaknesses
-Unique, personal purchasing experience -Many other farms with same vegetables at
-Peace of mind for environmental and health market
conscious consumers -Small population of UP
-Years of market farming experience -Newcomers to the area
-Low overhead at The North Farm -Short growing season
-Attractive market display
-Kate’s business education
-Mentors
-Our customer service experience

Opportunities Threats
-Organic/local food trend -Climate Change
-General increase in environmental -Mega farming techniques that have adverse
consciousness effects on soil health, and result in more
-General increase in conscientious food tenacious weeds and diseases as well as
choices loss of topsoil
-Expanding market for local food -Unforeseen weather events (hail, wind, lack
-UP Food Exchange of adequate soil freezing in winter, etc.)
-Mostly untapped market for local veggies -funding cuts to programs benefiting low
throughout winter income people, including food stamps and
WIC.

Organization and Management

Kate Debs and Joe Newman entered into a general partnership with equal (50%) ownership of
their farm business in 2018. Kate’s responsibilities include greenhouse seeding and
management, attending the Munising Market, managing the CSA, and managing budgeting,
income, and expenses. Joe’s responsibilities include maintaining organic certification, tool and
vehicle maintenance, attending the Wednesday evening Marquette Market, and managing
wholesale orders and accounts. We manage all other aspects of the business together.

Kate, a graduate of Michigan State University with a degree in marketing, has three years of
farm apprenticeship experience, one year of farm management experience, and two years of
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farm ownership experience. Joe has two years of farm apprenticeship experience, one year of
farm management experience, and two years of farm ownership experience.

Kate’s experience on a variety of farms that operate in many different ways gives her unique
insight into what works and what doesn’t in farm management. In addition to this, her business
education aids in making decisions regarding marketing, record keeping, and finances. Joseph’s
experience working in natural foods cooperatives provides him with skills necessary to seek out
and form relationships with vendors, and his experience working on other small farms and
managing another farms market stand informs decisions making at MSF.

Compensation is divided equally between Kate and Joe.

Product Line

As a diversified, organic vegetable farm, we grow a wide variety of vegetables for sale locally.
We grow the following vegetables and herbs: arugula, basil, beets, carrots, chard, cilantro,
cucumbers, eggplant, radishes, hakurei turnips, head lettuce, kale, kohlrabi, salad mix,
cabbage, new potatoes, onions, parsley, peas, peppers, spinach, shallots, scallions, tomatoes,
zucchini, sage, thyme, oregano, sorrel, chives, winter squash, celeriac, and parsnips.

We use minimal packaging and labeling at the farmers market. For grocery wholesale we follow
national standards for packaging and labeling. While we initially aimed to provide barcodes and
PLUs for our wholesale products, we discovered through conversations with buyers that this
was not immediately necessary, so we will revisit barcodes and PLUs in the future.

Marketing & Sales Strategy

Channels of Distribution
We sell our produce in three distinct outlets. The largest, at 75% of our sales, is the three
farmers markets we attend throughout the season, two midweek and one Saturday market,
which alone accounts for over 50% of our income. The farmers market gives us the autonomy to
display our own produce, set our own prices, and obtain the highest return for our vegetables. It
also gives us a chance to meet our customers, answer their questions, and receive immediate
feedback about our product. The farmers market is the key to our success as small, beginning
farmers, however we expect that sales here will start to plateau within the next few years. With
that in mind, we are focusing on expanding sales in our other two outlets- CSA and wholesale.

CSA stands for Community Supported Agriculture. In our free choice version customers pay us
at the beginning of the season for a certain share size which they then redeem by picking out
their own selection of vegetables each week at the farmers market. We see the CSA as a step
between farmers market sales and wholesale. Our price per unit is lower than the farmers
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market, but we receive the payments at the beginning of the season and lock in customers for
the entire season. Unlike farmers market customers, who may shop around the market before
deciding to buy one or two things from us and the rest of their vegetables from other farmers,
our CSA members will come to us first and take at least the amount that they have already paid
for, and sometimes purchase more on the spot. In addition, it is easy to create robust
relationships with our members - we learn their names, greet them every week and come to
know their likes and dislikes. They are a great source for feedback as well as encouragement.
We started the CSA in our second season with 13 members and plan to expand it to 30 in 2020
and more in the years to follow.

Our smallest but fastest growing outlet is wholesale. Between our first and second years,
wholesale grew from 5% of our sales to 17% of our sales in 2019. Although we receive the
smallest price per unit from wholesale, it has many advantages for a growing farm. Unlike the
farmers market or CSA, we receive wholesale orders before we harvest, meaning that
everything we harvest and pack for wholesale is sold. There is no waste or guesswork involved.
Consumers are becoming more interested in local and organic food so both grocery stores and
restaurants are eager to jump on the bandwagon. When they purchase our product they want
their customers to know it, which creates excellent brand recognition for us. Perhaps the most
promising aspect of wholesale is that there is plenty of room for growth. Many grocery stores are
just starting to carry local products and we have heard from a few of our outlets that they can
sell as much as we can provide. In addition to expanding our sales to our current vendors in
2020, we will also start selling to the Marquette Food Co-op, which is unique in that they stock
local produce whenever available before buying national produce.

Market Penetration Strategy

At the farmers markets we stand out with a colorful, bountiful display that draws customers in.
We worked with other farmers in 2019 to start the new Wednesday evening Marquette Farmers
Market, which makes our produce available to a different set of customers midweek in the
largest population center in the UP.

We meet with wholesale buyers in the winter to discuss their needs, and plan accordingly.
During the season we keep in contact with each buyer according to whatever system works best
for them. Typically we call, text, or email buyers each week to let them know what we have
available. If we’ve made a plan with a buyer for a particular product for the season, we prioritize
getting them that product over bringing it to market if for some reason we don’t have enough for
both. We deliver products to buyers on a consistent schedule, as soon after harvest as possible.
Our consistency, professionalism, branding, and packaging has made an impression on our
buyers, who have repeatedly expressed their appreciation for how we do business and their
intent to continue and expand their relationship with us.

Our CSA is, at the time of writing, different from every other CSA offered locally. Instead of us
deciding what CSA members receive each week, members come to the market and pick
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whatever they would like, up to the amount that they have paid to receive each week. Running
the CSA in this manner has one clear benefit for us compared to the traditional model - we
spend very little time on the CSA. If we packed boxes, that’s hours of work every week.
Additionally, customers never go home with produce they don’t want, and we expect our
retention rate to be well above the national average for CSAs.

Being certified organic has allowed us to penetrate the local wholesale market knowing that we
will get a fair price for our produce. It is also a signal to customers at the market who may not
wish to chat or ask about our practices that we meet a baseline standard for environmental
stewardship, and that they can eat our produce without fear of ingesting harmful chemicals.

Communication Strategy
The most important communication we have with customers comes at the farmers markets we
attend. Every market is an opportunity to develop personal relationships with the people buying
and eating our produce. We’re extremely open about how we farm, and invite customers to ask
questions about our farming practices. Farmers Markets present the most ideal setting for these
discussions, but we also engage with customers through social media and a semi-regular
newsletter. Facebook and Instagram have been and will continue to be useful for letting
followers know where they can find our produce, as well as making direct sales during the
winter when there are no farmers markets.

Our experience working for other farms taught us how important it is to tell our story. Farms that
successfully engage customers not only with their fresh produce and good market presence, but
also with who they are and why they do what they do make customers feel that they’re a part of
something. They’re not just purchasing for themselves, they’re supporting people they know.

With wholesale buyers, we communicate weekly about our availability, and check in regularly to
make sure they’re satisfied with the quality of what we’ve sold them. Being consistent with
checking in weekly has paid off with buyers who tend to have much bigger accounts than us,
ensuring that we receive orders every week. With larger buyers, if we relied on them to contact
us when they need something, we would sell them much less.

We also ask every restaurant that we sell to regularly if they can display our name either on their
menu or somewhere in their business. Grocery stores we sell to make a point to advertise that
they have our products, and display our logo or information about our business prominently.

Growth Strategy
From year one to year two at the North Farm, MSF grew by 93% from $27,000 to $52,000 in
gross sales. While we know we will not be able to sustain this rate of growth, we do know that
we have a lot of room to grow. The growth from year one to year two came from greater name
recognition at the farmers market, starting a new farmers market, becoming certified organic
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which allowed us to expand into much more wholesale, and starting our CSA. We also benefited
from local media highlights at the height of the season.

In our first two years we lost significant amounts of produce in the field to deer. While we expect
some loss every year, we built a much more effective fence toward the end of the 2019 season
that we know will greatly reduce our losses in 2020, meaning more produce available to sell.

Using our detailed crop records from 2019 we’ve been able to determine what works well for us
on our scale and in our markets. This has enabled us to fine tune our plan for 2020, cutting out
crops that have very low return and growing more of our most profitable crops. We’re greatly
expanding our spring plant sale offerings, and planning to add microgreens to our product line in
the spring and fall, as well as possibly growing them indoors through the winter. We’re also
expanding our CSA.

Between the 2019 and 2020 seasons we’ve purchased two pieces of equipment, one for
transplanting and one for harvesting, that will save us hours of labor each week compared to
previous seasons, allowing us to spend more time improving other aspects of our operation.
We’ve also designed a new irrigation system that will save us hours per week, and will mean
that for the first time our field will receive optimal water throughout the growing season. This
means healthier crops and higher yields. Our conservative estimate for 2020 sales is $65,000.
In 2019 our conservative estimate was $37,000, which we outperformed.

In 2020 we will work with the FSA and other potential lenders to help us secure our own land in
the area. The land-lease at the North Farm is available to us through 2022, and we plan to
utilize the facilities and the land through that entire period. In the meantime, we will prepare the
land we purchase in 2020 for organic production beginning in 2023. We will seek funding to
build a heated seed starting greenhouse, an indoor washing and packing facility with a cooler,
apply for grants to build hoop houses through the NRCS, and plow, shape, and cover crop our
future field. We will look for land that has an existing root cellar, or a basement that we can at
least partially convert to a root cellar, as growing and selling root crops through the winter is an
area of our business that has perhaps the most growth potential.

Our goal while we are still at the North Farm is to improve efficiency and weed pressure to the
point of being able to utilize each of our beds to their highest potential, rotating multiple crops
through each bed every season. Better control of our weeds means quicker turnover of beds,
which in turn means more vegetables we can produce and higher gross revenue.

By 2025 we aim to exceed $100,000 in gross yearly sales, with a minimum 45% profit margin,
without employees. We will achieve this by maximizing efficiency throughout our farming
system. We will also extend our season with multiple unheated hoop houses, where we can
produce fresh greens throughout the winter months. With fresh greens and a root cellar full of
storage crops, we will be able to extend our CSA year round, and keep fresh and storage
produce on local grocery store shelves year round. Growing and selling food throughout the
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winter is the key to making a living from vegetable farming in the UP. We’ve only just begun to
realize the potential of this by growing a small amount of storage crops in 2018 and 2019, and
growing spinach through the 2019-20 winter.

Funding Request

In 2020 we will actively search for land with a livable house, a minimum of four acres of open
farmable land, and a minimum of ten total acres. Our funding request may change based on
unknowns such as whether land we purchase has existing infrastructure such as a building that
can be converted into a wash/pack facility, a usable root cellar, or a basement that can be
converted into a root cellar. This funding request assumes a basement that can be converted to
a root cellar, as basements are fairly common features of houses, and that an adequate well
exists with a 10GPM pump (typical residential well pump), but assumes no other structures
exist. Additional variability of the funding request is laid out for each item on the list.

1. House with minimum land requirements - $120,000 - $150,000

2. Running irrigation and electrical lines to buildings and fields - $8000
● Estimate based on other local farmer’s experiences - bringing water/electricity to
seed starting greenhouse, field, and wash/pack facility
3. Heated seed starting greenhouse - $12,000 - $18,000
● Based on current market rates for a hoop house, high efficiency propane heaters,
air circulation fans, automatic side curtains, and a water heater to heat seed
starting tables
4. Heated wash/pack facility - $12,000 - $18,000
● Based on current building materials cost for an insulated 24’x30’ pole barn, high
efficiency propane heater, cement slab with drainage
● Lower end of estimate assumes finding free or low cost used sinks or tubs to
wash produce, higher end of estimate assumes brand new stainless steel sinks
and adding a bathroom
5. Walk in cooler - $3,000 - $5,000
● Based on current building materials costs using a CoolBot system with a window
AC unit, not a commercial refrigeration unit
6. Root Cellar - $2,000 - $3,000
● Based on current building materials costs converting part of an existing basement
(insulating, ventilating, installing CoolBot system)
7. Walk behind tractor and implements - $11,000
● Walk behind tractor with power harrow, snowblower, and flail mower

At the high end this amounts to $63,000, not including the land/house purchase.
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Grant Funding

We will seek grant money where available to keep our overall costs of starting on our own land
down. Through NRCS we will seek money to build hoop houses, and we will meet with NRCS to
discuss other options for grants and cost sharing. Grants have been available in the past to
build root cellars.