Financial Lessons from a Successful Diversified Farm

Edible-Alpha® Podcast

In Edible-Alpha® podcast #120, Andy sits down with Cliff McConville, founder of All Grass Farms northwest of Chicago. The diversified ag operation provides raw A2 milk, 100% grass-fed beef, pastured pork, organic vegetables, and free-range turkeys, broiler chickens, and eggs, all sold at the onsite farm store or online.

After working in the insurance business in Chicago for 25 years, Cliff’s last job allowed him to work from home. Now with more free time, he and his partner Anna purchased a suburban horse farm. Soon the documentary Food Inc., Michael Pollan’s The Omnivore’s Dilemma, and Joel Salatin’s You Can Farm sparked his intrigue in small-scale regenerative farming, so in 2011, he gave it a go on their 8.5 acres.

Cliff loved the work and realized it could become a small business, so in 2012, they started selling grass-fed and pastured proteins out of their house. Customers asked for raw A2 milk, which was not on Cliff’s radar, but once he researched its benefits, he became a devotee. They bought two Guernsey cows, got licensed to sell raw milk, secured liability insurance, and added the in-demand product to their mix.

With business booming, Cliff and Anna needed to increase production, so they leased 20 acres of pastureland near their home. Needing even more pastureland and ideally a dairy barn, they found exactly what they were looking for in the Brunner Family Forest Preserve, a picturesque property along a busy suburban highway.

After 18 months of negotiations, they worked out a unique 25-year lease. The forest preserve invested $200,000 to restore the historic dairy barn’s roof and foundation while Cliff and Anna foot the bill for septic, electricity, fencing, and other upgrades. They lease 160 acres for $150 per acre and pay the preserve 5% of all farm store sales. Cliff calls this a wonderful partnership, and the property’s high visibility has supercharged sales.

Next, Andy and Cliff dig into the financials, as Cliff meticulously tracks production costs, sales, and profits of each enterprise. The largest and fastest growing animal enterprise is beef, while raw milk, which requires a ton of labor and time, isn’t nearly as profitable, so Cliff caps production. His data also informs when and where to raise prices to ensure profitability.

Uniquely, All Grass Farms has equity investors, longtime friends who were eager to provide patient capital. Later on, they took out an operating line of credit to help with infrastructure improvements.

Most recently, Cliff and Anna began leasing organic pastureland in Elkhorn, Wisconsin, owned by the Yggdrasil Land Foundation. With a triple-net lease, they maintain the buildings, property, and infrastructure and pay insurance, property taxes, and a stewardship fee as rent. Cliff and Anna now live at this property and are looking for a full-time farm manager for the Brunner property, although finding and keeping workers is challenging.

Cliff is a great role model for managing farm finances, so tune in to learn more!