January Produce Pioneers

Sheppard Farms
Cedarville, NJ

By Laura Drotleff
Senior Staff Writer

WHAT does it take for a vegetable farm to survive nearly 120 years? David Sheppard Jr., one of the current owners of Sheppard Farms in Cedarville, NJ, attributes his family's success to a willingness to try new crops, new technology, and cultural practices, as well as close attention to cost accounting and profitability.

Costs are only one factor of many that have dramatically changed over the 118 years since Sheppard Farms was founded, he says.

"Labor wise, my great grandfather paid 20¢ per hour; today, that same man costs $12 per hour," David says. "Fuel, fertilizer, containers, equipment, and repairs are more than 10 times higher. Returns for what we sell have only increased two to three times."

Yesterday
In 1888, Timothy Sheppard bought a 108-acre farm, with 40 tillable acres. At the time, it was a sheep and fruit farm, and Sheppard began to grow vegetables. When his son Gilbert entered the business, the Sheppards were growing 15 different vegetables on 100 tillable acres with 12 workhorses. They made their own vegetable crates from lumber they cut all winter and prepared in their sawmill, which was run by a Case steam engine that also heated all of the greenhouses. Always looking for new ideas, the Sheppards were among the first to use commercial fertilizers, overhead irrigation, and a new piece of farm equipment - the tractor.

Skip forward to the 1970s, when the current owners - brothers Erwin, David Jr., and Thomas Sheppard, joined their father, David Sr., after all three had graduated from Cornell University. The farm had grown to 250 acres of vegetable production. Competition for land was high and on the 1400 acres that Sheppard Farms uses today, there were 10 different farmers. Over the years, those farmers quit or retired.

Profitability was low and competition eased. The Sheppards rented more land at first and bought it as they could afford. Today, Sheppard Farms produces 250 acres of peppers, 250 acres of lettuce, 150 acres of asparagus, 50 acres of squash, 350 acres of cucumbers, and 60 acres of tomatoes, all for the fresh market. Soybeans, wheat, and Sudan grass are grown for rotation, as well. In addition to the 1400-acre farm, the family also runs two packinghouses. Primary customers include chain stores, foodservice, produce brokers, fresh processors, and road stands.

Today
The three Sheppard brothers complement each other well in splitting up the work it takes to run a 1400-acre farm and two packinghouses. David is the crop production manager and he keeps up with all the cost accounting for the different enterprises. Erwin manages the office and the harvest while Tom heads up sales and the packinghouses.
During the production season, Sheppard Farms employs up to 240 people, including three harvesting crews, several family members, and the next generation of Sheppard Farms - David's two daughters, Michele and Melissa, Erwin's son Brandon, and Tom's son Alex and daughter Margaret.

David Sheppard is very active in the industry as a past president of the Vegetable Growers Association of New Jersey, a member of the State Board of Agriculture and the County Board of Agriculture, in addition to serving various statewide committees. "You have to look at the global industry and make long-term decisions based on the big picture, while staying in business in the short term," he says.

What is happening in the industry, from food safety to new consumer demands, should be reflected in every grower operation, David says.

"The difference between the wholesale price and the consumer price doesn't have the direct relationship it once did," he says. "Today, you had better base your decision on an average price you hope to get so you can forward price a portion of the crop at a reasonable rate. Decisions you need to make before you ever buy the seed could have more to do with profitability than ever."

Many farmers' unwillingness or inability to address consumer demand changes and food quality issues has put them out of business, David says, and with land values in the area nearing $10,000 per acre, selling may be easier than making improvements.

Tomorrow
"The future of Sheppard Farms will depend on how we position ourselves to adapt to the needs of our customers," David says. "Can we survive when expenses increase faster than returns? Having to do more with less is not new in agriculture."

Profits hinge on many factors, he adds, labor being one of the most crucial.

"Labor supply and cost is one of the most important factors, since it accounts for 50% of our expenses," he says. "State-mandated wages increased our labor costs 10%, with no increase in productivity. This, along with increases in taxes, insurance, energy, interest, and equipment costs, leaves a lean profit picture. Yield increases in the past have helped, but we see that slowing. Better prices through less production or value added and new uses will hopefully keep the garden in The Garden State."

To maintain profitability, Sheppard Farms has cut unit costs through mechanization, better yields, and maintenance, which helps with labor challenges, as well, and allows the operation to pay its employees higher wages, David says. Rising energy costs also have led to research into innovative solutions at Sheppard Farms, including wind power alternatives.

Looking forward, adapting to changes in the consumer market means opportunity for growers. This past spring, Sheppard Farms became a certified organic producer with 20 acres of squash, tomatoes, and peppers grown under the organic label. Value added programs are a major focus, as well.

"We are currently adding to our shipping facility to do more value added and better address food safety," David says. "We are also working on a microwaveable asparagus package that gives consumers more convenience. Custom packaging and branding should identify us as a source of value to our consumers."

Direct comments or questions about this article to lhdrotleff@meistermedia.com