Thursday, June 19, 2008

Madrona Farm

There was an interesting article in today's T-C about Madrona farm in the Blenkinsop valley. Dave and Nathalie Chambers are currently farming the land.

The farm is a 28 acre property of which 15 acres are under cultivation. The farm is on the market for $2 000 000. The brother's that owned it have offered $600 000 towards The Land Conservancy buying the farm. Another $1 400 000 needs to be raised to complete the deal. There is a two year timeframe to complete the deal with $250 000 having to be available by December of this year.

In general I am in favour of this sort of private sector approach to protecting farmlands. As the owner the TLC can decided how the land is managed and a Panama Flats issue is unlikely to occur.

I know the land out in the Blekinsop valley is not all usable for farming, so the Chambers may never be able to use all of the land for production of food. The article states that they produced about 125 000 pounds of food on the land, that number seems low to me, but I do not know what the limitations of the land is and I do not know what labour limitations they have - working 15 acres of market garden is very labour intensive.

There may also be infrastructure issues with the farm. It sounds like it was left fallow until Dave Chambers took over the land in 1999. I have seen some amazing intensive organic operations in the Okanagan, but the up front capital outlay to prepare the land was in the range of $50 000 an acre. The growers that have done this have more than made the money back over a short time.

Since they only produce 125 000 pounds of food, it is likely there is a problem with storage and distribution of the produce. Getting into both is very expensive.

I ask these questions because I think that the issue is not that the land is too expensive to buy for farming, but that the Chambers are under capitalized.

If I were to put the 15 acres into strawberries, I would expect to yield about 160 000 to 200 000 pounds of fruit. At a price of $2 a pound, this would translate into $300 000 to $400 000 gross income. In any case, with the right crops, I believe that the 15 acres under cultivation should be able to produce a gross income of $300 000 to $400 000.

If I were to farm that land, I would put a fair amount of it into tree fruits. Specifically cherries, apples and plums. With the newer intensive plantings, the yields per acre have risen dramatically. I also like the tree fruits because the labour inputs are less and spread out over the year. Harvesting 20 pounds of apples takes a few moments. 20 pounds of berries takes a very long time. Cherries are more labour intensive when being picked, but the price cherries can command are stunning.

The price of $2 000 000 for the land also includes the house. Given the going rate for a cheap house in Victoria, the farm land itself is only $1 600 000. A mortgage for the full value on the property would run you about $160 000 to $200 000 a year. Yes, the numbers look marginal but they are not impossible. If you can increase the land under cultivation to 20 acres, the gross income should rise to about $400 000 to $500 000. At this level the land becomes viable as a commercial farm.

I wish the Chambers and the TLC well in their efforts.
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