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Integration & growing pains

We have been growing so fast, that the nature of our farm has changed. My wife and I noted the change on returning to the farm from holidays, while we knew just about all our staff and their family it is increasingly difficult because so many new faces have joined the company.  The facts are that having 22 high tunnels and has forced us to add a lot a new people, in addition, the higher productivity of each of the existing ones has also lead to more staff.  We have four different types of harvest containers.  

It is one of the changes that Jennifer implemented, the pickers do that at the end of each shift, we have 7-9 pickers and 2 transport people, per high tunnel.  The first phase is picking and transporting the produce from the plant to the sorting warehouse.  the former pick the fruits and vegetables and the transport people ensure that the pickers always have the appropriate harvest containers (not simple in a polyculture environment)  and that the full ones are brought to the warehouse.  In the warehouse the produces are sorted and placed in their final delivery packaging.

We have a huge advantage in having all our production indoors so that picking occurs rain or shine every single morning.  It's more like shift work, than real agricultural work, the crews work in team of 5-7 and while there's a lot of automation there is a great deal of judgement. You do the math and with 15 high tunnels, producing.  The first three of the new batch are already running, it means that we have a lot of people on the farm between 6 and noon.  Jennifer indicated that with some of the new equipment that is being added to the new high tunnels (and will be retrofitted to the older ones) we will reduce our headcount per high tunnel by 30%, which means that currently with 12 high tunnels at full productivity, which is a first for us in January, we have 72 workers in the high tunnels alone.  It would rise to 132 when all 22 high tunnels are operating, but the new technology reduces that 92, which still means that we need another 20 part-timers in the high tunnels.  In the warehouse, having split the meat and vegetable crews means that we were able to almost double the processing speed, only because the space is better used.  That means that we've only increased our warehouse staff by 5%, and our milk processing crew is stable-ish.  Increasing your cow milk production by 25% yoy means that we still need more people which has increased from 12 to 17 in the past year.  

The worst affected is our mechanics' group because with all this automation there are more frequent breakdowns and higher maintenance.  We saw it at the end of 2023 when David was working far too late because it "had to be done".  Our mechanics' crew grew from 4 part-time (plus David) to 6 full-time and 4 part-time.  This is how we got to nearly 178 people who work on the farm either part-time (80%) or full-time.  Jennifer believes that in 2024, we will see our headcount rise to 200 but that the proportion of part-time will drop slightly to 70%, which means that full-time workers will rise from 36 to almost 60.   The higher production rate in January 2024 (lighting, Co2, heating) means for the farm that this is the first January means that for the first year since inception, January had a positive operating cash flow.  In fact, January 2024 was better than July 2023 in operating cash flow, for the UK consumer it gets worse, the new import regulations introduced earlier this year mean that prices will continue to rise as supply is constrained.  We have seen a 2% month-on-month price rise (equivalent to an annualized 24%) rise in price for our produce.  

It is far worse for our butter and cheese business, we have seen ridiculous price increases in butter prices, we are not entirely clear what is going on in that market.  Prices are market-determined (this is not entirely true for us, but not relevant and far too complicated, and also proprietary to our farm).  

My initial point is that the farm has grown tremendously because we have successfully brought in food processing within the confines of the farm.  This means that our value added is high, and our farm is able to capture more of the profits generated in this industrial sector.

We know our initial crew of 56 very well, they are all, but two, still with us.  But every year as new employee join, we are less familiar with them and know little of their families.  Obviously, the chicken processing parties remedy this.  For my wife and I, these are the best occasions for meeting everyone and spending time getting to know them.  

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