How Much Money Can You Make Tilapia Farming
To many people, it might smell like a pile of rotting leaves, but not to Fung Yang.
"What you're smelling is the smell of money to united states of america," says Yang, owner of Small Kine Farm in Waimanalo.
Yang grows organic mushrooms, and the earthy aroma comes from piles of wood-chipped trees that Yang composts into what amounts to soil – the scientific discussion is substrate – for the portobellos he cultivates.
Hawaii imported about 2 one thousand thousand pounds of mushrooms in 2004, Yang says, the last twelvemonth that figures are available. And that'due south simply a small office of the menstruum of food into a land where almost all of what's eaten here is shipped in.
Yang is doing his small part to change that by producing thousands of pounds of mushrooms a calendar week to sell in stores like Downward To Earth, Kokua Market and Foodland.
As Small Kine Farm'south name indicates, it's inappreciably a megafarm. Only it's large plenty to support half dozen employees, plus Yang, his wife, Yumi, and their 2-month-old girl.
"Nosotros don't make a lot of money," he said. "Only nosotros offering a living wage."
If Hawaii is going to grow more of the nutrient it eats, including mushrooms, the state will need a lot more than farms like Modest Kine, or bigger versions of Small Kine, or both. But is it really possible for Hawaii, which now imports about 85% of its food, to grow more of what it eats?
Lisa Kleissner, a Hawaii philanthropist who has been overseeing an extensive study of the state'south food systems, thinks so. Kleissner is co-founder and lath chair of Hawaii Investment Fix, a business incubator for entrepreneurial projects that accost social and ecology challenges. She sees numerous tools to address challenges farmers face, including access to land and financing.
"These are solvable issues," she says.
Jason Make, a onetime investment banker who at present runs a large lettuce farm on Oahu, agrees Hawaii can movement the needle on how much of its food to grow here. It's but a question of how much. Small Kine Farm has shown a farmer can make it growing mushrooms in Hawaii.
"The question," Brand says, "is how do you scale the hell out of him?"
Competition For Resources
To understand the answer to that question, information technology's useful to talk about the costs of running a small farm like Yang's, as well every bit where a subcontract like Small Kine fits into Hawaii'due south agronomical universe.
Often lost amid the talk of growing more nutrient in Hawaii is that Hawaii's biggest crops aren't foods eaten here, but things grown mainly to consign. Co-ordinate to the UDSA, the land's 3 biggest cash crops in 2017 were seed crops, coffee and macadamia nuts. The seed crops, mostly corn shipped to farmers elsewhere, were valued at $120.8 million; macadamia basics, $53.ix 1000000 and coffee, $43.8 million.
The biggest crop most often eaten here, papaya, finished a afar 8th on the list, with a value of just $9.4 million – far behind a number of other agricultural products, including cattle, which represented $43.9 million, and algae, which tin be used for biofuel and generated $35.2 million.
In brief, much of Hawaii agriculture isn't really aimed at feeding Hawaii.
Adding to the contest for agricultural resource is something that has cypher to practise with growing anything at all. Wind and solar farms, which are considered agronomical uses under land-employ laws, can generate more than revenue for property owners than food crops.
And if profit motive were not plenty, Gov. David Ige has helped fix power companies and farmers on a collision grade. While Ige has said he wants to double Hawaii'south food product from 2014 levels by 2030, the governor has gone further to promote developing wind and solar farms on agricultural land by requiring all of Hawaii's electricity to be produced with renewable resources by 2045.
Among these Goliath business forces, farmers like Yang are true Davids. And, like farms everywhere, they oft face unavoidable operating expenses. Yang says he probably wouldn't exist around but for a Small Business Innovation Research grant he received from the USDA. Although he now works as a farmer, he's trained every bit a scientist, with a bachelor'south degree in meteorology from the Academy of Hawaii. The $500,000 SBIR grant was to study whether mushrooms could be grown using stuff like composted tree trimmings as substrate.
It took nine years to turn a turn a profit growing mushrooms, he says. During that time, he supplemented his income with coin from a recycling business he also owns.
Labor is Yang'south biggest operating expense, in part because he pays an average of $15 an 60 minutes for his five total-time employees and one office-timer. He too pays for health insurance for the workers, as the state requires.
In other areas, Yang has managed to keep operating expenses relatively low by using clever hacks. His farm's footprint is a case in betoken. He manages to operate on simply one-fifth of an acre primarily because he grows his mushrooms on racks in refrigerated shipping containers instead of spread out on the basis. He started with one fridge, scaled upwards to a walk-in libation, and so a xx-foot container and finally a 40-foot container.
He now has six such containers in all, spread out in a row at the farm, where the workers spend the mean solar day listening to classic stone like Led Zeppelin, Jimi Hendrix and the Clash blaring from a sound arrangement amidst the mushroom funk. Theoretically, Yang says, he could go along to grow his production without increasing his footprint simply past stacking containers.
In whatever case, he pays well-nigh $iii,000 per month for land, which is his second-largest expense later payroll.
Yang'southward 3rd major expense is energy. He'due south been able to reduce his energy bill by using solar panels and energy efficient refrigeration systems, he said. But he's withal paying about $1,200 a calendar month for power.
Other expenses can exist minimized even more. Yang gets the tree trimmings that he needs to compost into substrate for free from arborists who otherwise would take to pay to dispose of the waste. He doesn't demand much fertilizer. And he doesn't need much expensive equipment: mainly modified, used aircraft containers and a used forklift and Bobcat loader to motion stuff around. That ways little debt to service: only a small loan from the USDA's Farm Service Agency.
Like near businesses, he has taxes to pay, including a four.7% general excise tax. Although the Legislature has carved out numerous exemptions to the infamous GE tax over the years, including GE taxation breaks for things like send and aircraft repair companies and oil refineries, Hawaii farmers still pay full freight. Irresolute that is 1 matter that could help, Yang said.
Withal, Yang says, while farming is difficult, he makes plenty.
"If I wanted to make a whole bunch of coin, I wouldn't be in Hawaii farming," he said.
Brand, the lettuce farmer who is a partner in Kunia State Farms and Ko Hana Hawaiian Agricole Rum, agrees.
"The big question people want to know the answer to is, 'Can y'all make money farming?'" he says. "At that place answer is, 'Yep.' Simply not equally much as people would hope for."
Brand says using Hawaii'due south comparative advantages is the fundamental to scaling upwards Hawaii'southward food production. A onetime derivatives trader on Wall Street, Brand rose from Merrill Lynch'due south trading desk to become the president of the company's Asia operations, based in Tokyo. And he presents a pragmatic framework for growing nutrient here.
He says the strategy should be based on three main questions: What crops can nosotros grow? Can the crops be grown in ways that are consistent with Hawaii'due south ethos concerning things similar ecology protection? And can the crops be scaled upwards to a betoken where they can exist sold in Hawaii as cheaply equally imported products?
Hawaii-grown food's biggest advantage is it doesn't take to exist shipped here, which reduces costs. Things that perish easily and need to exist shipped in refrigerated containers accept an even greater reward, Make says.
Those concepts led Brand to leafy greens, which Kunia Country Farms grows on a 3-acre aquaponic farm.
Kunia Country Farms spent 10 years growing to what information technology is today. Similar Pocket-sized Kine Farm, Kunia also has multiple ways to keep operating expenses down. A water catchment arrangement collects water that flows through a series of rectangular beds where the lettuce grows floating on reusable foam trays. A system to pump oxygen into the water is powered by rooftop solar cells. Instead of soil, Kunia uses coconut husks. Fertilizer comes from tanks of tilapia, which Kunia likewise raises.
The consequence is 5,000 pounds of lettuce per week and 750 pounds of tilapia per week. And he's able to sell it for less than many out-of-state competitors.
"If we can't make food cheaper, we need to think near what we're doing," he said.
Volition 'Hawaii's Largest Restaurant' Step In?
Farms at present have numerous tools they tin can employ to expand, says Kleissner, who has been working to create an inventory of such resources.
Grants are available from numerous sources, including foundations and public charities. Farms can get low-interest loans, and loan guarantees are available. In addition, organizations such as the Trust For Public State receive authorities and philanthropic grant money to buy land to keep in conservation, which includes farm uses. The trust in some cases resells the land at a disbelieve to farms, reducing transaction costs for farmers, Kleissner said. And there are a multifariousness of subsidies bachelor: for things similar processing, feed and transportation.
Some other key to enabling farms to scale upwards, Brand says, is to have large institutions hold to buy produce from local farms. One such entity, ofttimes cited as "Hawaii's largest restaurant," is the statewide schoolhouse system.
It'due south not just a thing of creating a base of demand, Make says. Farmers can also borrow money confronting such contracts, which tin can allow the farms to grow. And the farm can take out relatively cheap crop insurance to offset the risk that something unforeseen will wipe out a crop.
There are a number of challenges associated with getting the schools to step in, says Kristen Jamieson, who is working to solve that trouble every bit a farm-to-school coordinator with the Academy of Hawaii'south College of Tropical Agriculture and Homo Resource.
Amongst other challenges, she said, is schoolhouse cafeterias often take to retrain cooks to work with fresh ingredients and in that location's a general push to make menus uniform across the statewide organisation.
However, Brand says such large contracts are key to the hereafter of farming to grow nutrient in Hawaii. Information technology doesn't matter and then much whether the buyer is a government agency, individual entity or consortium of private buyers, he said. His rum company, Ko Hana, benefited from such a contract with the Hawaii Emergency Management Agency when the COVID-19 crunch hitting: Ko Hana landed a contract with HIEMA for 50,000 gallons of hand sanitizer, Brand said. And that allowed the visitor to pivot.
A big contract for mushrooms from Hawaii'south schools could let a small farmer like Yang quickly grow, assured in that location would be a base of business organization, Brand says.
"This is where if the DOE said, 'Here'due south your contract,' he'd step into information technology," he said.
Yang isn't so certain.
The idea of taking on one big customer isn't that appealing, Yang says. He would rather grow and spread widely, "similar a pancake," he says. He's concerned about being too dependent on one customer, he said, even though he understands that contracts by nature allocate take chances between the parties.
That said, Yang acknowledges he could go a long way toward filling the state's demand for mushrooms by scaling upward his farm.
"One acre is enough," he said. "We could do 2 million pounds with one acre of land."
Hawaii Grown" is funded in role by grants from the Ulupono Fund at the Hawaii Community Foundation, the Marisla Fund at the Hawaii Community Foundation, and the Frost Family Foundation.
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Source: https://www.civilbeat.org/2021/02/can-you-make-money-being-a-farmer-in-hawaii-2-farmers-explain-how-theyre-doing-it/
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