Opportunities to expand include thinking outside of the traditional box

Over a bowl of popcorn one winter evening, Kansas farmer Dwight Baldwin began thinking of an alternative.

Like most of his neighbors, he and his son, Adam, have grown wheat, sorghum, soybeans and corn on their ground near Inman. Yet the farm economy centered around those traditional crops at the time was hurting. Corn, for example, was hovering around $3 a bushel. 

“We paid $5 for 2 pounds of popcorn, and we weren’t even getting $5 for a bushel of field corn,” Dwight said. “I asked my wife, ‘Should we be looking into growing this stuff?’”

Kansas isn’t known for popcorn. Just 130 acres were planted in 2017, according to the latest data from the U.S. Department of Agriculture’s National Agricultural Statistics Service. However, Dwight began doing his research, calling farmers and seed producers in Nebraska where 34% of the nation’s crop is grown. That spring, in 2017, he planted 5 acres to popcorn as an experiment.

Six years later, the Baldwins have 12 acres dedicated to the crop thanks to a growing fan base of consumers. They market directly to customers under the label Papa Baldy’s, selling their popcorn through Kansas retail locations and an online store on their website—papabaldys.com. 

Moreover, they’ve increased the acreage’s revenue each year, said Dwight’s wife, Cindy. A 32-ounce bag of popcorn sells for $5. 

“It just boggles us,” Dwight said. “We have shipped our popcorn to 48 states. We have customers write to us and tell us how much they love our popcorn. 

“I had a guy call from California one day, and I asked him how he heard about us. He said, ‘I have a friend in New York who sent me a bag.’ We have really built a fan base.”

Expanding beyond acres

For many, expanding the farm means buying out the neighboring farm. However, such opportunities can be hard to come by—especially in a highly competitive land market. 

Yet expansion doesn’t always have to mean adding acres. Farmers are finding opportunities to better manage their balance sheet as well as expand their cash flow, said Mike Downey, a co-owner of Iowa-based Next Gen Ag Advocates who has been helping families with farm transitions for more than 20 years.

“It might be establishing a new enterprise to the operation, supplementing income with an off-farm job or doing more direct marketing to the consumer,” he said, adding, “I think there is a real opportunity for rural America as more consumers are seeing value in buying products right off the farm.”

Look beyond acres

According to the 2017 Census of Agriculture, farmers sold more than $3 billion of edible food commodities directly to consumers.

While the direct-to-consumer market was gaining speed before the pandemic, it augmented in spring 2020. Rick McNary, a global food expert who started food packing nonprofit organization Numana, said he began noticing a rare bright spot in agriculture.

Consumers not only wanted to know where their food was coming from, but also the story behind how it was grown or raised. They wanted to know more about the producers selling the product. Social media and supply chain issues helped supercharge the movement.

Moreover, McNary said, these consumers are willing to pay more for it.

Thus, in April 2020, after enjoying steaks purchased from an Anthony, Kansas, farm couple, McNary, who lives in Potwin, Kansas, realized there needed to be a central location to connect producers to consumers.

“I got out my laptop and thought, how can I connect people like Kregg and Katie (Carothers) in Anthony to the food they raise?”

That night, he started the Facebook group Shop Kansas Farms. He had 5,000 followers in the first 24 hours, which grew to 50,000 in seven days. Today, the Facebook group has 158,000 followers. A complementary website gets more than 1,000 hits a day.

McNary runs the page as a volunteer, he said. About 1,100 farms are marketing everything from dairy and meat to vegetables and grains through the group. Of the farmers using the site, more than 80% are traditional farm families looking to supplement their revenue through direct-to-consumer marketing.

“I’ve been around enough farmers who are wanting to keep their farm alive and don’t want it to die on their watch,” he said.

Downey added it can also help bring the next generation into the operation.

For the Baldwin family, the scenario is reversed. Adding acreage to popcorn could eventually provide Dwight a way to transition out of the farm’s day-to-day operation while not fully retiring.

“We see this as a possible way to provide Dwight and Cindy both an opportunity to stay connected with the farming operation if they decided to,” said Adam’s wife, Kim, who oversees marketing Papa Baldy’s. “It is something that Dwight enjoys doing. He enjoys meeting potential buyers and return customers. It keeps him connected as we move into the next phase of the operation.”

Value-added acreage

Nearly all the world’s popcorn production is in the United States, with 25 states growing the crop. Nearly half of the national production is in Nebraska, followed by Indiana, Illinois, Ohio, and Missouri.

Despite Kansas’ proximity to Nebraska, the state doesn’t have much popcorn production. Dwight wondered why and began making calls. He purchased a jumbo mushroom variety of seed from a Nebraska grower in 2017. He also found an end-user—a wholesale buyer interested in Kansas-grown popcorn. The buyer said he would take the family’s entire crop.

That deal fell through when the buyer said the kernels were too big for his equipment.

“We realized that we would have popcorn for the rest of our lives if we couldn’t figure out a way to sell it,” Kim said. “We could have mixed it in with the field corn and dropped it off at the elevator, but we didn’t.”

Kim, a former high school journalism and multimedia teacher who had worked for a marketing agency in the past, began developing a direct-to-consumer concept. She and Adam came up with the name Papa Baldy’s—playing on what their two children call Dwight, plus the family’s last name and Adam’s college nickname. She developed a label and a website to tell the family’s story.

“We knew early on we needed a name that would mean something,” Kim said. “Having a face to the product has helped us, and I think that the name itself creates a nostalgic response for some folks who remember popping popcorn with their grandparents. I think Papa Baldy’s helps bring those memories back.”

Dwight, meanwhile, made stops at independent specialty shops during his travels, seeing if the owners would sell Papa Baldy’s popcorn.

By year three, the family had an online store and an automated bagger—which increased efficiency. Sales grew through Kim’s digital marketing efforts, plus by word of mouth as customers shared popcorn with their friends and neighbors. Kim said groups like Shop Kansas Farms increased visibility to a large audience wanting to buy directly from a Kansas farmer. The family was also highlighted in the 2020 edition of The Old Farmer’s Almanac.

Today, the family sells popcorn through the online store, plus nearly 60 retail locations in Kansas, Oklahoma and Missouri. They also sell directly off the farm in bulk to commercial poppers.

“We created brand recognition through social media, and we had folks across Kansas who tried the popcorn and became fans of it,” Kim said. “Then it was just a domino effect.”

Change of mindset

“Our whole experience with commodities was taking grain to the elevator, dumping it and then calling the elevator at some point and telling them to sell it,” Cindy said.

That has meant a change in mindset as the farm cut out the middleman on their popcorn acreage, Adam said. Entering the direct-to-consumer market means they are now a food company. They take on the risk. They also adhere to state inspections and licensing.

Growing a product directly for the consumer also means more work. For instance, the planter used for planting field corn is thoroughly cleaned before drilling popcorn seed. A dedicated combine picks the popcorn before any other fall crop.

Once the popcorn is harvested, it is put into a separate bin then taken to Polansky Seed, in Belleville, to be color sorted, cleaned and placed into bulk bags. The popcorn is trucked back to the farm to be stored until it is packaged for the consumer.

While popcorn has transitioned traditional commodity acres to a higher profit acre, there have been challenges, Adam said. That includes distribution. Shipping costs are sometimes more than double the price of the actual product. However, living in a populated area not far from regional hubs like Hutchinson, Salina and Wichita does help.

“We realized we are working with different demographics of customers,” Kim said. “One of those groups of customers are willing to pay the shipping, which is more than what we charge for a bag of popcorn.”

Papa Baldy’s customers don’t seem to be hesitant about the shipping prices, Cindy noted, adding their business has grown on repeat customers. They take pride in customer service, and Cindy always writes a personal note about what is happening on the farm with each order, signing it “happy poppin.’”

“We had a lady from Washington state tell us she wouldn’t try another popcorn after tasting ours,” Cindy said. “We get those all the time.”

At times, Kim pulls back on marketing due to the increasing demand. Holidays, like Christmas, are the busiest, and the whole family chips in to get the popcorn packaged and delivered. Adam and Kim’s grade-school-aged children help bag and put on labels.

“To maintain the momentum, it requires a lot of work and effort,” Kim said. “But Papa Baldy’s is something we have committed ourselves to doing. Being in the popcorn business has been a really fun aspect of the farming operation.”

For now, keeping the business at 12 acres of popcorn and selling it in the calendar year—a fact they use in their marketing—has kept the popcorn business manageable within the family, Dwight said. Expansion would add more expense, such as extra bins and an employee to help with distribution.

Dwight, however, smiles at the thought of how far they’ve come in six years—from an idea over a bowl of popcorn to a small Kansas company that sells popcorn across the nation. He does it because, like his fans, he just enjoys good, quality popcorn.

One of the brand’s biggest compliments came recently from a man in Wisconsin who tried Papa Baldy’s while visiting Kansas. He told them he used to be associated with Purdue University and knew Orville Redenbacher, the famed popcorn producer who grew up in Indiana and graduated from the college.

Despite this connection, he said, “your popcorn is better. I’m throwing out my Orville Redenbacher and just doing you.”

Other praises include kids who love the taste and have met the real-life Papa. Cindy recalled Dwight taking some popcorn to a retail location when a little boy came up to him.

“Are you Papa Baldy?” the boy asked. “Wow—I love your popcorn.”

“We never got that hauling wheat to the elevator,” Cindy said.

Amy Bickel can be reached at [email protected].

Expanding profit on the acres you manage

What is the first thing that comes to mind when contemplating farm expansion? Taking over the neighboring farm, right?

“When there are additional generations who want to come back to the farm—maybe it is a younger generation or a sibling—the first thought is ‘we need to find more acres to justify bringing that person back,’” said Dakota Hoben, co-founder and chief executive officer of Iowa-based Farmers Risk. Farmers Risk helps farmers make better risk management and grain marketing decisions in order to grow their farm legacies.

While purchasing more acres can work out for some, finding land to take over is harder now than ever, Hoben said. Farm expansion—that is generating greater sales and profits—can be accomplished without adding any more acres at all.

That means honing in on strategic goals and strengthening the balance sheet on the acres they are already managing, Hoben said. For example, that could include finding ways to decrease the overall cost of production, adopting yield-increasing technology or, like the Baldwins, creating higher revenue opportunities.

The key to taking advantage of these growth opportunities is understanding the farm’s financial health, he said. Farmers need to have the right processes and tools in place along with a long-term vision of the direction they want to grow the farm. That includes looking at profit and loss statements every quarter and making adjustments to the vision as needed.

Mike Downey, a farm transition consultant who founded Next Gen Ag Advocates, said it’s not as easy as his grandfather’s generation, where a family had the opportunity to start a farm operation from ground zero and rely on the income from the farm itself to provide for them and grow the operation.

“I talk almost every day about farm cash and the cash flow—and how to support bringing on the next generation or transitioning to the next generation.”

For some, growing the farm could mean supplementing the income—having an off-farm job, expanding a livestock operation or adding an enterprise like selling seed corn or crop insurance. For others, like Kansas’ Baldwins, it might be adding a direct-to-consumer product that adds higher value to those acres.

“I think there is a real opportunity in rural America where consumers are seeing value in buying products right off the farm,” Downey said. “Even taking a small parcel—taking 10 or 20 acres and doing a specialized enterprise on those acres—it might be another way to add revenue that could bring on another generation.”

Downey added farmers should look for ways to expand from within and be more efficient on the acres they manage. Perhaps it’s investing in new technologies that help maximize profits or improve the soil, Downey said.

“Basically, break it down field by field, acre by acre—and work to do the best you can on every acre,” he said.

Downey said he is also seeing a trend where young farmers on neighboring operations are collaborating to be more efficient. Some are using the same line of machinery or sharing labor.

“Just being more efficient on every acre of their operation will help producers with their long-term vision,” he said. “I have seen 1,000– or 1,500-acre operations be just as profitable as 3,000- to 5,000-acre operations. That’s because the smaller farmer is forced to be more efficient with the acres they do have.”