Farmer Diaries

Now, that's big news, the Hong Kong courts ordered the winding up of Evergrande.  It makes the actions of Peter's Chinese client who sold all 18 of their properties look incredibly wise.  I write this as we are flying back to the UK.  Peter's client was funny because he was saying that the possible rent for his properties was less than 1% of the value of the real estate.  Which explains why no one rents out apartments.  There's no money there! It is important to remember that the support for housing was driven by two goals, creating jobs and a domestic outlet for China's private savings.  It gets worse, #2, #3, #4 largest development companies are state-owned enterprises.  Their liabilities are guaranteed by the state.   The Hong Kong court decision could play out in three different ways: (1) The Chinese government allows the application of Hong Kong law and Evergrande is liquidated following standard market bankruptcy rules: Likelihood 0.0001% (2) The Chinese gover

Arriving back home after being away for two weeks is a little strange.  The Clark farm looks unrecognizable, now that all the buildings have been removed.  The two contractors who took the five barnes way worked together to clean the land and return it to pasture.   My wife and I just spent the morning with Jennifer going over all the issues that needed resolution, there were virtually none.  We did spend the last two hours discussing strategy for the farm.  My biggest concern was the stock of methane we had following the decision we made to raise February's production for our vegetables.  Produces should start coming off the plants early next week, as continental supplies fall off.  Right now, based on our foreman's analysis our production will be at the same level as last June, when the temperature was much higher.  A combination of heated high tunnels (we average 5c to 7c higher than outside temperature during the daytime), and longer use of lights,  it looks like our Februa

I never seriously looked at the Chinese capital market.  It was of no professional interest.  We didn't even consider the Japanese market.  Our investors simply had no appetite for the sector.   However, watching stupidity is always entertaining.  Years ago the Vietnamese Government decided that the country needed a stock market.  For years the market would open and close every day.  For years there was not a single company listed on the Vietnamese Stock market.  I'm not sure how long it lasted but it probably more than a decade. Now when it comes to stupid there's nothing like a good dictatorship...In 2022, the Chinese government decreed that bond price, and volume were secret information.   In other words, to save the bond market, they killed the bond market.  There is no market making there is no price.  the whole thing is totally opaque.   The Chinese stock market is a partial reflection of private enterprise.  Investing in state-owned companies is based on what the gov

Part of the old farm topography is an impossible challenge to a farmer.  It happens all over the world.  In fact, most soil is unstable for agriculture.  On our farm, we have an area of about 7 acres that is simply too wet and where nothing ever grows because of constant flooding.  The soil composition is such that trees don't grow.   Our ecologist sought permission from the local authorities to transform the area into a green preserve, where we would build a pond and surround it with grasses and small trees to encourage animals and birds.  The pond level (about 10 feet) would then allow proper drainage of the area and would be an excellent use of the area.   On Friday, the local council decided that this was a "water feature for the Great House", and as such we needed approval from Historic England!   Approaching the local council was a low-cost endeavour, plans and audits cost about £ 500.00 in all. Developing the pond would cost between £30,000-50,000 at worst.   Going

I have never smoked cigarettes.  I think they are smelly and deadly.  Of course, I tried, and it's entirely possible that as a student at an English University, I smoked a few different herbs mixed with tobacco.  One of the conservative mantras has always been "tax not ban".  The Conservative Party was even against the South African ban...granted that was pushing a weak and stupid noodle.  Suddenly to make themselves popular, banning tobacco is the way forward.   My guess is that some wing of the Conservative Party is looking to get some traction on a stupid pet project.  It will take a seismic event for the conservatives to remain in power after the next general elections.  The worst part it's not even a private bill, not it's the real deal.  The long fall from grace was pre-ordained when the Conservative Party "won" the Brexit vote.  Many party supporters had long believed that all our problems were the fault of these pesky Europeans.  Problem for the

At 8:30 we were waiting at the chairlift for our first ride up the mountain.  The temperature was -2c and sunny.  After more than a week, my wife and I are starting to have good ski legs, and the slops were fabulous.  A perfect ski morning.   We quit at 1, after more than four hours of skiing we had enough, and the slops were getting progressively more crowded and the snow less pleasant.  Also, we don't want to break anything at our age!!! In other news, the UK government continues to try to disrupt trade from Europe.  Several weeks ago, our wholesalers warned UK producers that they expected import disruption following the implementation of new goods import rules.  The short-term impact (2/6 months) would be a massive increase in the price of leafy greens and other vegetables.  In December, our wholesalers asked us if we could increase deliveries as product shortfall was a real risk.  For our farm, it is relatively simple, we raise high tunnel temperature, thereby accelerating plan

This is a complicated story.  Two days ago Peter called and asked if I could meet some Chinese clients in Vail.  Peter said that it was important and necessary.  It seems that the initial client audit (KYC) had not been done as thoroughly as it should and that the firm was concerned.  Basically, I was doing the job my ex-firm should have done years ago.   Why now, because some were in Vail and had questions following recent (unspecified) events in China.  A big favour to save the firm's bacon. I met two investors on Friday (today).  The first with his eldest son was interesting. Their process of disengaging started out of necessity because the Chinese government was slow in approving foreign exchange requests for smaller private companies.  They began using transfer pricing to retain profits (and foreign exchange) outside of China, so they could meet their OECD contractual obligations.  Reporting income and profits in the jurisdiction in which they operated and being good corporate

Something is clearly wrong with the Princess of Wales. These days hospital stays are short because recovery is always easier and safer at home. Our prayers are with the Princess.  The King too, at 75 the plumbing is acting up a bit, a small if unpleasant procedure.  The king has had a healthy life so far.  I am certain that Harry and Megan sent their private wishes to them both.  Here in America Harry and Megan still make the press every so often, although Ms. Swift seems to have taken over the airwaves of late.  Harry and his wife decided to take a holiday in Jamaica, part of the commonwealth it is well known that both Harry and Megan love the place, Harry when he was much younger in 2012 and is one of Megan's favourite holiday spots. The press didn't like that they took a holiday.  The Daily Mail and the Express were especially brutal.  So they get invited to the premier of a movie on Bob Marley, as guests of Paramount Pictures.  Harry in a suit and Megan in a black dress.  I

In 2019, our first full year of operation we got lucky!  There's simply no other way of saying it.  We got lucky that our first 60 staff were so good, dedicated and capable.  Among our first 10 hires were David our lead mechanic (he of the broken foot), Jennifer who started as a gofer and joined the picking crew as soon as our high tunnels started producing (and is now our farm manager), three of our four foremen, and our first forewomen (the pig lady) were all hired in the first year.  But also our Biologist and ecologist, our first two hires (directly out of university) who are still with us. Since then we have added (we have apparently now 178 people on the employment roll) about 110 people (mostly part-timers) who work on the farm.  As I said, 24 want to increase their hours, and become full-time employees (there is a difference here in the UK when you guarantee a minimum of 40 hours a week.  It's a thing).  In fact, all our employees are guaranteed a specific number of mon

After more than a week, I can say a few things about Vail.  First, Spanish is probably the second most common language here.  Turns out that Vail has always been a skiing gateway for well-to-do Mexicans.  We met a few, but more importantly, is that many restaurants cater to their needs.  We are British, and aside from Indian food have little exposure to chili-powered cuisine.   Still, it has been a blast.  Most of our food has come from one of two markets.  We stopped at Safeway on our way back from the Airport (it was on the way) when we dropped Jack and his wife off.  But daily for essentials, we have relied on the Market at Vail, which is best described as a cheaper version of Fortnum and Mason. We can walk just about everywhere in the village -- granted there are parts (such as the supermarkets) that are really driving distance but less than 10 minutes.  It's easy to get here from London (JFK has a direct flight) so we will come back.  Lift tickets were expensive,  about £ 1,30

It is hard to not feel strong sympathy for our European cousins who are facing major problems in the pricing of their goods in the organic meat sector.  If you have ever visited a French market the strength of the "produits du terroir" is compelling.  It is less visible in beef, but the cost difference between an organically grown chicken and a battery chicken is about 300%.  This is driven by the time it takes the chicken to mature, the type of feed they require and the labour required for raising them.  In addition, the cost of chicks has also increased.  European organic farmers have seen input costs more than triple while prices have stagnated or even collapsed (e.g. pork). We have seen the cost of market calves double, and their genetic profile is less interesting.  We gravitated to artificial insemination (essential for our milk cows because of the type of cross bread we require for our milk), for our entire herd because of these two issues.  We are large enough and we

 Our single largest client base is the UK hospitality sector (hotels and restaurants).  Because of our high price high-quality products, we feel far less the impact of this crisis, but it would be wrong to say that we are not impacted.  There is pricing pressure at several levels of our production process.   In 2019, 99% of our production was for the hospitality sector, and 100% was for the domestic market.  In 2022, 85% of our production was for the hospitality sector and 95% for the domestic market.  In 2023, 70% of our production was for the hospitality market and 85% for the domestic market.  These changes were entirely driven by our wholesalers.  They are the ones that optimize sales of our products to match market demand and our pricing points. We will never be a farm that focuses on the UK retail market, we will never sell to the likes of Waitrose Safeway or other supermarkets.  For two reasons; our products are too expensive and too niche.  We sell heirloom fruits and vegetable

It took exactly five hours, to generate an inventory of all the stored equipment on the farm.  As I mentioned we have 20 employees looking for additional hours, and so Jennifer asked this morning for individuals that were free to work another half shift.  She made it abundantly clear that this was a last-minute thing, and that it had zero impact on their future, but we had a job that needed to be done.  20 of the 24 part-timers were available for a few hours to do the inventory.  Aside from finding equipment, we found a great deal of supplies that were forgotten over the years.  Posts, wire, fence puller, it adds up quickly.  We have already contacted two auctioneers and will begin delivering the surplus equipment in two weeks. Dedication:  one employee, a young divorced mother of two young girls gave up her entire Sunday (the only free day of the week she has) to help on the farm.  This means that she worked 14 days without a break, she has two jobs, from 7 till noon with us, and then

After 10 days of visiting America, one truly irritating thing is the 24/7 news cycle free of all intelligence or relevance.  It's not like we watch the BBC every night religiously, but rather it was that the news was clearly entertaining for a 6-year-old.  It was all about feelings and individuals' view of events.  Yes, I agree it's terrible when your house burns down, at no point does the interviewer mention that having a Meth lab in the basement was probably a major factor in the fire (which by the way was the headline "Meth lab burns down"). Even in America, there isn't anything important enough for the 24/7 news cycle, especially when you only talk about domestic issues.  American news is about America, and little else.  China, the Middle East, and the Houthie were never mentioned.  It's a facts-free zone of emoting. We tried to follow the electoral process with the Primaries, but again it was always about interviewing individuals walking out of pollin

Our farm has never sought any subsidies, we don't do this for political reasons we do this for economic reasons.  Those who provide subsidies (e.g. governments) are fickle and have a tendency to change their minds.  Case and point, German and French farmers are furious with Brussels for having cut their fuel subsidies.  If you undertake an investment based on continuous subsidies it will end in tears, it may take a while but the outcome is certain. On our farm, we look at subsidies as economic rent (unearned economic benefits).  Our land is too valuable to install wind farms, and the wind here is too uneven to be worthwhile. On the other hand, we were more than happy to receive a subsidy (rather small) for our biodigesters.  The overall impact on our yield was negligible, but it was free, so why not! We were not lucky (aside from the "direct" to-consumer business) we planned our target markets carefully, and my wife did all the research.  We hired two independent firms to

10 days ago I mentioned that we would soon dismantle and sell our old dairy equipment.  Yesterday Jennifer sold all our equipment to a single buyer.  In two months he will take possession and dismantle the entire milking system.  The insane part, while the new equipment is expensive, we actually sold our old equipment for 103% of what we paid in 2019.  I actually checked with our accountant and we had depreciated that equipment by 63% (the equipment was depreciated by 85%, but every year we maintained and repaired the equipment and part of these expenses were capitalized).  It's not a huge amount but it means that we will report a capital gain on the sale of our milking parlour... Jennifer told me that the price of used equipment has exploded, mainly because the price of new machinery has risen dramatically (about 40% over the past five years), but also more farmers have been looking at used equipment to reduce capital expenditure.  We have about 25 buildings across the two farms t

A serious title for actually excellent news.  Our eldest daughter, her daughter and fiance are moving to Norfolk, more specifically they are moving into "new" quarters at the other end of the house. I explained before that the ground floor of our house is now fully occupied -- if you consider a ballroom occupied.  The first floor has bedrooms, for us, our children and some guests.  Via a different set of stairs, and somewhat in an older part of the building there are more guest accommodations and a substantial amount of still unrefurbished space, especially at the end of the building where there is actually an additional floor.   With the strong support of my wife, my daughter and her boyfriend hired our old architect to remodel that part of the house into a nearly self-contained home.  Call it a granny apartment with several bedrooms, living rooms, a kitchen and a dining room in addition to a lot of extra space. After their wedding next August (again at the house) they are p

The only thing we fear is the cold, and even then it's only the unforecasted cold that is of concern.  The Met Office is all in a tizzy today about another storm that is about to hit the country, especially the Western side, where winds over 120km/h are expected.  Our biggest exposure is our high tunnels.  Ours are robust and made out of aluminum and polycarbonate.  A few weeks ago we had a high-wind warning for the region, Jennifer told me last night that we should expect gusts of maybe 50km/h. David is back at full work, his wife even called Jennifer to ask her to "allow him back, because he was driving her crazy".  Jennifer says that he has a funny contraption to keep the weight off his foot, but he can do almost everything with this device (it's like a peg leg...).  Anyway, the new forklifts arrived yesterday and were being torn down for inspection today and tomorrow.  David has been looking at buying a machine to press high-pressure fittings, but when he saw the

So we were having lunch in a restaurant in the mountain of Vail, called "the 10th".  Honestly, we had not planned on stopping there, but we were hungry and it was convenient.  We didn't know we needed reservations, but still, they could accommodate us, which was great of them.  They could easily have told us to get lost.   The food was fine, and the prices were what you would expect from a ski slope dining experience, expensive.  Our waitress looked overworked, but we were there late at around 1:30 so the rush was about over, I guess. We had removed our ski gear and boots and were enjoying sitting there quietly when the table next door started talking to us, completely out of the blue.  I guess they heard my English accent.  For some reason, they were fascinated.  This was a mighty unusual experience for us.  Once they understood we didn't live in London but on the Eastern Coast, they started asking us if it was like New York, and I told them that it was more like Mai

It is hard to complain after the massive support we recently received from both APHA and DEFRA.  Jennifer has been using, since she started, an App that follows her daily tasks so that she can observe where she spends most of her time.  Clearly, there will be outliers, sunday was a perfect example.   She was "on" from 6 am till almost midnight when she completed all the tasks required by APHA's protocol.  Jennifer told me last night it got stranger when CID showed up at the farm.  They wanted to speak to the Vet and also get a copy of the tape of the three "eco-terrorists" coming into the goat pen.   For the non-British reading this, CID is the UK equivalent of the US FBI.  Not the same but the analogy carries.  Frankly, I think they are making too much out of three idiots, but still, I get their concern, and I guess it's also a form of training.  What better way to create disruption than to contaminate the food supply!  I know I understand, it sounds like t

Jack and his wife are leaving this morning to go back home.  We are leaving on Tuesday in a week, staying in Vail and enjoying a fantastic holiday.  I can say that this has been the best skiing holiday we have ever had.  Vail is really welcoming and a fun place to go.  We are driving Jack and his wife back to the airport around 9 am today. They were hoping to be able to stay longer, but as Jack said: "real life got in the way".  They come here about once a month during the ski season and spend two weeks in the summer hiking and doing other summer activities.  For what it's worth, Jack only announced last night that they had to go back home earlier than anticipated (they were supposed to stay till Wednesday).   In other news, we had a small outbreak of Ecthyma on the farm.  Jennifer told me last night that the vet had spent a considerable amount of time on the farm and our goat herd was infected, they confirmed that it's Ecthyma, which was absolutely not present in our

 The crew who is taking apart the large steel buildings in the new farm have been at it for two days (they really started Friday morning).  The wooden barn is gone, but the ground has not been fixed yet, its too cold and they agreed (with Jennifer and the team that is taking the steel buildings apart) to take care of the land once all the buildings are gone. The pigs have all arrived on the farm and have started acclimating to their new environment.  The pigs & piglets will stay in training pens for about a month. The warmer weather is finally back and the temperature in our high tunnels is back around 17c, so we the garden are back in production (when it gets very cold production drops off).  Electricity and plumbing is now available on the new farm yard, and the electricians and the refrigeration team are hard at work.  It looks like the buildings will be ready ahead of schedule.  David called me to say that he found three used forklifts for the new yard, that will be picked up n

Our hosts are lovely people, and they are great skiers.  Let me sum it up. Wednesday we were up early, and all four of us were ready for a day of skiing...we were not the first in the gondola, but we were not the last.  We got back to the chalet at 4:30.  Gess what we did Thursday...same thing.  two full days of skiing.  That's when our hosts suggested a half day on Friday so that we could enjoy other things that Vail offers  -- we have booked four snow machines to go in the backcountry for a few hours.  Jack said that after 3 hours you are about done unless you are a diehard.  He said that sledding in the virgin snow is fun, but hard work. So we just had lunch and we are off to on snow machines!  Jack has arranged for the snow machines to be delivered to his favourite location, and we are all dressed up for the cold (it's only -3c) and very sunny. It's funny because, as I write these words the concept of valet services for everything just doesn't exist in the UK.  Gran

Our farm has been the beneficiary of the terrible weather;  the carcasses of our two warehouses on the new farm are now complete, including the massive doors (the buildings are watertight).  Jennifer, our farm manager, told me last night that the electricians and plumbers were on site, as were the refrigeration contractors.  Electricity and gas have already been connected but the plumbers have not yet connected the boiler (for our heated floors).  Part of the issue is that the electricians and plumbers required an inspection of the rough-in, which is scheduled for today (Friday).  Especially, in a commercial building, you cannot skip inspection steps, for two reasons: permits and insurance.   Again, not to belabour the point, but because of weather delays on other construction sites, our two chillers and our two freezers are already under construction, ahead of schedule.  Jennifer contacted them to tell them that our buildings were nearly weatherproof, almost three weeks ahead of sched

I got a very strange comment about a week ago, about why we were "green" in our farming, that we were there to feed the elite and that our "green agenda" was destroying the middle class. I wish I was kidding!    First, and we've made it clear from the very start that we became farmers to make money.  We saw farming as a very profitable business mainly because it is "unsexy".  As a fund manager, I observed how clients would want to invest in sexy businesses that were generating minimal cash flow, but boring stuff that was massively profitable they would not even consider. We became organic farmers for one reason; the hotel and restaurant business that is at the core of our clients demands organicly grown fruits, vegetables and meats.  In addition, because we employ humane procedures and can prove this, they are more than willing to pay for it.  This is exactly the opposite of the high street trade, they want bio chicken raised in liberty at the price of

This takes the cake, a $5,000 drone with a 5 kg carrying capacity made out of cardboard, invisible to radars is causing Russia real headaches, and military planners everywhere a rethink of their defence procedures.  These slow-moving cardboard Australian reconnaissance aircraft drones have been repurposed to become kamikaze attack platforms that can (and have probably) destroyed aircraft, radars and maybe even fuel depots.   The key here is the cost.  If a Su27 aircraft can be disabled or destroyed (as seems to have been the case two weeks ago), for a cost of $5,000 (where the aircraft are worth $30 million each) the Russian Air Force has a real problem.  Moreover, these drones are easy to assemble, totally stealthy and have a range of nearly 70 miles.  The destroyed aircraft were nearly 400 miles from the front.   Russia has been forced to position its aircraft even further away from the Ukraine front. The way forward in the current war is hard to estimate.  There are many issues at h

This was not my first flight on a business aircraft, but again it was a new experience.  Jack asked if I wanted to sit in the cockpit with him during the flight.  The airport is minimalist, it is really just a runway and aircraft hangers (no tower).  There is an automated gas station and a bathroom.     The taxi dropped us in front of Jack's hanger.  The Learjet is a small aircraft, really the size of a large (but narrow) SUV.  Jack has owned the aircraft for nearly 15 years.  He bought it from his father-in-law, who bought it from Learjet. In 2020, the aircraft was having its third-ever heavy maintenance (Jack told me that it cost nearly $300k), and he took the opportunity to refresh the interior of the aircraft including replacing all electrical and electronic systems.  The aircraft cockpit and interior are indistinguishable from a modern aircraft.  Jack said that the new electronics alone were nearly $200k.  Aviation is an expensive hobby (although for Jack he uses it for work).

Together, we go skiing once every few years now since the children have left the house.  It used to be a ritual during the winter break to go away skiing for a week in the Alps.  Usually, we would rent a chalet either in France or in Austria.  When we were young we would drive but as the children grew older the plane became much more convenient. This year, it was a last-minute decision, and also an opportunity.  I mentioned to Peter (ex-colleague) that we were thinking of going skiing when he suggested that I contact a common friend, I will call him Jack,  about renting his place in Vail. Peter, Jack and I were all colleagues at my ex-firm as juniors all these years ago. What happened next was unexpected, Jack was already planning on going skiing with his wife, that very week so he invited us to join.  He then said that they were flying out of a small airport called San Rafael on a private aircraft.  We would take off Tuesday morning around 11 am, and be there for a late lunch.  When I

 Considering how easy Amazon is to use, Americans still love the mall.  Yesterday was MLK day, it took a while to figure out that it was a remembrance day for Martin Luther King.  We were surprised that there was such a specific holiday for a specific person.  I get his importance within the American psyche but I don't get the holiday thing.   In the United Kingdom, we don't really have holidays to honour a specific person, except the King's birthday, which is not on his actual birthday!. Our day in San Francisco was lovely.  We made an effort to see the sights and we were largely successful.  Compared to the rest of the US, the West Coast seems to have avoided the terrible weather. We did not so much as watch the Iowa caucus (where Iowans pick their republican candidate for the Presidency) as it was reported on almost all news outlets -- it was that or American football.  It is now late, nearly midnight here in California, and the whole show is long over.  Mr. Trump easily

This is a thing in the Americas the right to repair your equipment.  Increasingly manufacturers take the view that they alone have the technology and the skills to repair equipment.  This is a big debate in America.  As far as farm equipment goes not so much in the UK. First, I should preface my comments.  Our farm is unusual.  We operate a fleet of five tractors, that we acquired between 2019 and 2020.  A fleet of 10 ATV&UTVs and 7 Hilux, in addition to my personal vehicle a 1972 Land Rover and my wife's 2023 Ranger Rover.   I largely rebuilt the Land Rover myself as a teenager.  I have owned this vehicle since 1989 and with the help of my dad and his brother, we rebuilt it.  It's not rusted, it starts the wipers work as does the heating...what else do I need Every other vehicle is maintained by the dealers.  Granted our mechanic will do an initial analysis on the tractor and minor repairs on the ATV/UTV and the Hilux but the reality is that everything is still under warra

Ok so everyone has heard how women who run for pageants are beautiful but are as dumb as a rock.  How about this: The 2024 winner was crowned Sunday night.  She is an Air Force Officer (active) with a degree in physics and is studying at the Havard Kennedy School.  She also raised $250,000 for pancreatic cancer research...oh and she's a knockout. It gets worse, a lot worse.  She was crowned by the 2023 winner who is literally a nuclear physicist.  Yeah, and she's not bad-looking either.   As I said, sometimes life is unfair! Sorry I could not resist -- the daughter of our hosts, who is a very pretty 15-year-old, wants to do some pageant, and when dismissive voices were heard from her brothers she informed everyone of the qualifications of the last two winners.  Let's just say that EVERYONE around the breakfast table was shocked.  As her father said, hey if you want to get a degree in physics and then become a beauty queen we are 100% behind you.  

Our hosts are lovely people.  She is a doctor (GP) and he runs a real estate investment fund.  So yesterday as we were waiting for our wives we spoke about investment in real estate and other economic issues.  He was surprised to hear that I had once been a fund manager.  I told him that after my health scare we wanted something less stressful, and farming is unsexy and surprisingly very profitable. He then knew some of our stories from his wife and my blog.  He asked me if I was exaggerating the China issue with owners/managers leaving/selling their mainland China businesses. I had to tell him that I had no first-hand knowledge.  The Peter episode was information he got when he called "competitors" in the City to warn them to be careful when travelling to China.  The City (especially on the buy-side) is a small community, so over two decades today's competitors were once colleagues and vice versa.  Twice Peter was told by other City fund managers that they too had notice