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Agritourism: The New Cash Crop

Versatile equipment and reliable service are keys for dealers who'd like to tap into this growing market.

By John Dobberstein, Associate Editor

Location: Mukwonago, Wis.

Owners: Mike and John Bauer, Keith Schmidt

Property: 50-acre apple orchard, 17 acres of pumpkins, large barn with deli, bakery and produce market, gift shop in a rented building and a tractor shed.

Employees: 30 off season, approximately 100 during the fall

Equipment: John Deere 6420 tractor, AgTec high-volume broadcast sprayer, Simplicity compact tractor, 1988 International Harvester 1066 hydrostatic tractor, Farmall Model 706 tractor, 16-foot Woods MD 315 Bat Wing mower, Rhino SE7 7-foot flail mower, 4WD Kawasaki Mule, Oliver 12-foot ripper plow, as well as a cultivator, 2-row roto-tiller and 30-foot boom sprayer.

While row-crop farms in the U.S. are getting bigger and bigger, small farms are looking for ways to capitalize on what they can offer: a unique rural experience.

It could be a cattle rancher who opens up his farm to European tourists. Or hobby farmers who open up their orchards to the public for hayrides and fruit picking.

It's called agritourism. It's a lucrative opportunity for an ag equipment dealership that can cater to that sector's special needs.

A successful example of the marriage between tourism and agriculture is The Elegant Farmer, an 84-acre orchard and retail operation near Mukwonago, Wis. During the fall, visitors flock to this 62-year-old business to enjoy hayrides or pick apples and pumpkins from the orchards and fields.

The Elegant Farmer's apple pies were recently voted the best in the U.S. by The Wall Street Journal, and feted by iconic chefs Paula Deen and Bobby Flay. Even Mick Jagger's publicist once ordered a pie for the rock star.

It takes a lot of different farm equipment — and prompt service from local dealerships — to keep the farm in shape. Foot traffic from visitors during the fall is vital to the business, which means the grounds must be in good shape, as well as the produce, says co-owner Mike Bauer.

"If we didn't have a good crop of apples or pumpkins, for whatever reason, we would definitely be hurt. The ag tourism business is what we are and that's what we do."

Mike Bauer, Keith Schmidt and John Bauer (l-r) purchased The Elegant Farmer in 2005. Since taking over, the trio has increased sales by 20%.

A Business Evolves

The Elegant Farmer opened in 1947 as a dairy farm owned and operated by brothers Dan and Elmer Scheel. In addition to overseeing a herd of 50 Guernsey cattle, they sold their surplus fruits and vegetables on the busy corner of their property in southeastern Wisconsin.

In the late 1950s, milk pasteurization came along, and instead of investing in the equipment to handle that process, the Scheels decided to get rid of the cows and focus on their produce. In 1970, Elmer's son, Dan Scheel, and his wife, Karen, took over the business and named it "The Elegant Farmer."

The business expanded by selling locally grown, fresh and frozen fruits and vegetables, and opening a farm kitchen, deli and produce section inside the old cow barn.

Brothers Mike and John Bauer bought the operation in 2005 and are majority owners, along with minority owner and longtime employee Keith Schmidt, who serves as the produce and deli manager.

"We want people to have an enjoyable experience when they come," Mike Bauer says. "People can come out for the day and do something inexpensive with the family, and it does bring a lot of families together." The business also benefits by being the featured stop on the historic East Troy Electric Railroad tour that's 7 miles away.

The Elegant Farmer isn't without vulnerabilities. The business suffers if the price of sugar, butter or flour goes up. Gasoline prices pinch the farm's budget, too, because of the cost of transportation and bakery deliveries.

"I read an article that says the average food product travels more than 1,500 miles to its destination. I think that's quite a large distance," Bauer says, adding that more and more Americans are interested in locally grown food. If it weren't for the visitors coming to the orchard in the fall, which account for 35-40% of The Elegant Farmer's sales, the business wouldn't be open all year.

"The business was doing well when we bought it and it's still doing quite well. Since we've owned it, we've increased sales by 20%, and we've had a lot of good publicity. We count on a successful autumn for us to remain open year-round."

In a few years, the Bauers may invest in a new building across the street for bakery production. Almost everything their business does — including making more than 1,500 pies a day — is under one roof, "and we're hitting those pains of expansion and growing," Mike Bauer says. "We want to continue growing so we can get pies out even further than the Midwest."

Orchard Needs TLC

The Elegant Farmer has a 50-acre apple orchard that grows 15 different varieties of apples, including Honey Crisp, Red and Golden Delicious, Granny Smith and Red Rome.

Each ripen at different times during the growing season, which spans 6-8 months. The apple trees in the orchard have a prime growing life of about 50 years, and the Bauers like to re-plant a portion of the orchard every 2-3 years.

Last year, they began growing small apple trees on trusses, where a plant can be placed every 4 feet, instead of every 16 feet. Those trees will produce for about 12 years. "What you're doing, with drip irrigation, is feeding the tree constantly and getting moisture in the soil, forcing the tree to grow faster," Mike Bauer says.

Insecticides are applied to the apple orchard June through August. Bauer keeps traps in the orchard to monitor the insects and plan how insecticides will be applied.

The apple trees grow until late October. Bauer estimates the apple orchard is visited by as many as 12,000 visitors each year.

The Elegant Farmer's pumpkin patch is planted in May or June, after the soil is turned and herbicides are applied. The business has 30 acres of land where pumpkins, soybeans and corn are grown.

Equipment Needs Vary

The equipment lineup for the Elegant Farmer isn't very shiny or new, but it's calibrated to maintain an orchard and pumpkin farm and keep the roads and walkways in good condition.

Bauer says he isn't opposed to upgrading equipment, but some of it is used infrequently and it's hard to justify the cost of replacing it. Machines are not purchased at The Elegant Farmer for ego, or because there's money burning a hole in someone's pocket. "You've got to weigh it out, Bauer says. "How much do you really depend on it?"

Bauer is in the market for a planter. He's currently renting a corn planter to plant the pumpkin patch, but he'd like a machine that would allow him to make adjustments that would save some money on seed. He plans to check out some dealerships' used-equipment offerings to see what's out there.

"The question is do I really need a new one, when I can get a decent one that is 10 years old? I'm doing 40 or 50 acres, not 500 acres."

Possibly the most important machine at The Elegant Farmer is its John Deere 6420 tractor, which is used for pulling a sprayer, plowing the fields and removing snow during the winter. Hundreds of hours are logged on it annually. "We use it 12 months out of the year," Bauer says. "It's fully heated, fully air-conditioned. And it's set up for the sprayer. It would take a lot of changing around to fit the sprayer on one of the other tractors."

The Deere tractor is paired with an AgTec high-volume broadcast sprayer that dispenses fungicides and pesticides into the apple trees. It was purchased new in the mid-1990s and it's used once or twice a week from the early spring through August for up to 5 hours at a time. The sprayer logs about 120 hours a year.

White powdery mildew is the enemy of the apple orchard and the pumpkin patch, which is why a sprayer is so important. Precision is crucial to avoid wasting product or having pesticides drift to unwanted places.

"When the time hits," Bauer says, "you need to get the sprayer on the trees right then and there. You can't say 'Whoops, I forgot' and have another chance, because it could ruin the whole crop."

The Bauers use an older 30-foot boom sprayer for herbicide application before the pumpkins are planted. They also use an older, much smaller sprayer hitched to a Simplicity compact tractor to spray herbicide around smaller apple trees.

The business also uses a 1988 International Harvester 1066 hydrostatic, the primary tractor on the grounds until the John Deere was purchased. It has a bucket on the front and a forklift on the back. This tractor is used for unloading trucks filled with apples, scooping up the prunings from apple trees, grading the driveways on the property or bringing bins full of pumpkins to the retail store for sale. The tractor gets about 100 hours of use each year.

Bauer also has Farmall Model 706 tractor from the early 1980s. That's used for some small spraying operations and plowing tasks, but mostly for mowing. It's used about 80 hours annually.

A key requirement for The Elegant Farmer is having equipment that helps crews keep spaces used by the public clean and free of debris, such as fallen apples that could be a tripping hazard.

For mowing, Bauer hooks up the IH 706 tractor to a 16-foot Woods MD 315 Bat Wing mower, whose shape and low profile allows crews to mow the grass between the apple trees and the vast expanses of green space on the farm.

Another key implement is the farm's Rhino SE7 7-foot flail mower. Bauer uses it to cut the grass and weeds along the 8-foot paths between pumpkin rows.

For transportation around the farm, and for odd jobs like collecting apples on the ground, employees use an older, 4-wheel-drive Kawasaki Mule with a small dump bed on it. The business also converted a pickup-bed fertilizer spreader that attaches to the back of the Mule. The setup is used to fertilize the pumpkin patch.

When the orchard gets crowded during the fall, it's good to have a smaller vehicle like the Mule to get around in, Bauer says. "It's small and easy to get into. And it's more maneuverable."

Some tillage and conditioning is necessary to keep the soil in top shape for the pumpkins, and to maintain the grounds. The Bauers have an Oliver 12-foot ripper plow to break up the ground, a 2-row roto-tiller, an International Harvester soil cultivator and a grain drop box that's used for spreading stones on the driveways.

The Elegant Farmer has six wagons to pull hordes of visitors each fall during hay rides, pulled by vintage tractors that are rented from a nearby hobby farmer.

The Bauers inherited most of their equipment, which was either purchased at dealerships or from auctions, Mike Bauer says. The John Deere 6420 was a lease-to-purchase.

Mike Bauer says The Elegant Farmer's decisions about buying equipment are made carefully. "You've got to weigh it out. How much do you really depend on it?"

Timely Service a Key

When it comes to routine maintenance of its equipment lineup, like changing a fuel pump or oil filter, The Elegant Farmer has a couple of "farm guys" to do that, Bauer says.

But for more serious projects like an engine overhaul, the owners have turned to a handful of dealerships and equipment companies that provide service that is practical and reliable, with a quick turnaround time.

Baker Repair in Elkhorn, Wis., is usually called about 5 times a year to handle maintenance issues and a mobile service technician is sent out — sometimes the same day as the call was received.

Bauer says Otter Sales & Service in Burlington, Wis., which services the business' IH tractors, is also very responsive in parts availability and making repairs on-site when needed.

Mobile technicians are a key requirement for The Elegant Farmer, Bauer says. "Then we don't have to haul equipment back to the dealership. It's usually done right here and the turnaround is quicker. I call him, he comes out. If I need a part, he goes and gets it and comes back and it's done.

"Every time you have a piece of equipment down it costs money for transportation, and we don't have our own trailer or truck to haul equipment around. Once it's here, it's here."

Another key requirement for service is being able to get the right parts in a reasonable amount of time, Bauer says.

Every few months he picks up parts for the Deere tractor at Harvard Implement Inc. in Harvard, Ill. on his way into work. And he's grown to appreciate the dealership's ability to network with other Deere stores in the region and obtain parts quickly.

"It's especially important in the fall, when we're depending on the equipment to work," he says. "We can't be down and without it."

A Salesman's Perspective

Mike Bauer knows what it's like on the other side, selling equipment instead of buying it. Earlier in his career, he spent several years selling skid loaders for a few business, including DeKane Equipment Corp. in Big Rock, Ill. At DeKane, a Case IH and Kubota dealer, he also sold farm equipment and mowers.

At DeKane, about half of his customers were hobby farmers. "I had to understand what their needs were. If I understood that, I could tell them what size equipment to use," Bauer recalls. "Most hobby farmers want tractors to do multiple tasks because it's the only one they'd have."

So what's it like now, being the farm customer? "I didn't realize all the work that is put into farming that I see now. It's definitely an awakening for me." Bauer's advice to dealerships is simple: Listen carefully to their customers' needs and don't make assumptions.

"I think a lot of hobby farmers say 'What do I do? The soil is all kicked up, things aren't growing well, what do I need to do?' " he says. "It all comes down to information. The hobby farmers need more information than someone who's been doing it for 50 or 60 years."

He sees more and more dealerships beginning to cater to hobby farmers, mostly out of necessity as medium-sized farms disappear and ruralpolitans take over. Bauer sees it as an opportunity for a progressive dealership, as hobby farmers have the cash and will upgrade their equipment.

"There's only so much equipment that can be sold every year, and if they're not going to do the little implements with the mid-sized and small tractors, they're going to have a hard time running that business," he says.

Operations like The Elegant Farmer are part of the growing movement of agritourism — or as the USDA calls it, "farm-based recreation."

Agritourism is more common in Europe and other parts of the world, but it could play a more important role in the U.S. economy as an alternative source of farm income.

Activities like hunting, fishing, horseback riding, petting zoos or orchard picking provided income to about 52,000 U.S. farms in 2004, about 2.5% of all farms in the country.

The South accounts for more than half of the agritourism operations in the U.S., followed by the Midwest with about 25%, according to a 2004 study of farm-based recreation by the USDA that involved more than 20,000 farms.

The study says that farm operators are more likely to run a recreation business if:

- They have a high net worth

- They worked fewer hours off the farm during the summer

- Their property was a greater distance from a city of at least 10,000

- Their county has an abundance of natural amenities, like water, climate and topography

Earnings for farm-based recreation operations tend to be highest in more densely populated counties, in areas with low or negative growth rates, and in counties where the overall recreational activity (farm and non-farm) is high.

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