Episode-1419- Mark Shepard on Restoration Agriculture
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Mark Shepard Forest Agriculture Pioneer
Mark Shepard is the CEO of Forest Agriculture Enterprises and runs New Forest Farm, the 106-acre perennial agricultural forest considered by many to be one of the most ambitious sustainable agriculture projects in the United States.
New Forest Farm is a planned conversion of a typical row-crops grain farm into a commercial-scale, perennial agricultural ecosystem using oak savanna, successional brushland and eastern woodlands as the ecological models.
Trees, shrubs, vines, canes, perennial plants and fungi are planted in association with one another to produce food (for humans and animals), fuel, medicines, and beauty. Hazelnuts, chestnuts, walnuts and various fruits are the primary woody crops. The farm is entirely solar and wind powered and farm equipment is powered with locally produced biofuels that are not taken from the human food chain.
Trained in both mechanical engineering and ecology, Mark has developed and patented equipment and processes for the cultivation, harvesting and processing of forest derived agricultural products for human foods and bio fuels production. Mark was certified as a Permaculture designer in 1993 and received his Diploma of Permaculture design from Bill Mollison, the founder of the international Permaculture movement.
Mark is founder and board President for Restoration Agriculture Institute and serves on the board of the Southwest Badger Resource Conservation and Development Council. He teaches agroforestry and Permaculture worldwide. Mark is a farmer member of the Organic Valley cooperative, the worlds largest Organic Farmer’s marketing co-op, and is the founder and chief Cydermaker for the Shepard’s Hard Cyder winery in Viola, Wisconsin.
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For all the Firefly, Supernatural or whatever fans, NOT that Mark Sheppard.
http://m.imdb.com/name/nm0791968/
I’m curious. Mark said seedlings do better than in ground seed? Seems to be counter to everything that’s been on the show lately. I tend to agree that in ground seed is the best.
I was thinking the same thing, hope to see a reply to this one.
“It depends”. Air pruning pots done well to build fibrous root system better results than nature. Look at Carl Whitcomb’s work, Alex Shigo for everything else tree knowledge. Taproots are over rated, much depends on species.
Yea I think we are WAY into it depends here.
Note Mark’s point was really about the VOLUME of planting he did.
Frankly I say if you are planting say an area planned for 50 apple trees and want to start out with 500 trees growing and cull from there, planting 1,000 seeds is no big deal, at all. And you can stack the numbers way into your favor with direct planting.
Now instead if we are planting 5,000 at final chestnuts to get the same ratio we need 50,000 trees growing and need to seed 100,000 chestnuts.
What I hear in Mark’s strategy was move the labor to the nursery and let someone else deal with it.
I think you end up with very different approaches when you are planting a 100 acre commercial farm vs a 2-5 acre homestead.
I didn’t look at your link but I think I am familiar with that project. If I remember it involved quite large mature replanted trees and compared them to other such trees that were not air pruned, it didn’t compare them at all to a tree grown from seed on site, that is correct right? Or is my mind and intuition slipping?
Absolutely. When I was 14 an old fruit breeder wrote an article in NAFEX imagining if young people would start the mass planting trials, amazing things would be possible. I got really into it but followed the money into ornamentals and habitat restoration.
Bad part of chestnuts in the field is everything wants to eat em. I have holy hell just dealing with squirrels and rabbits in the nursery. I eat em and they just keep comin.
Too much to talk about here in the field of air pruning but Whitcomb is a phd who has pioneered the field since the 60’s. It should be universal tech but public doesn’t see value in paying premium for superior root systems yet and honestly, the growth rate is better so the premium probably isn’t necessary.
Our current approach at the homestead and at Elijah Spring will use multiple approaches. We will plant the shit out of seedlings, we will do some direct seeding and we will start our own seedlings and grow them one season with major love, let them go dormant and transplant into the field while dormant.
I think that is brilliant. ‘If you don’t have a hook in the water, you probably ain’t catching any fish.’ My cousin had a damn purple plastic worm belly hooked on a little gold Aberdeen while I was reeled in and drinking a beer cuz it was a lousy day and I just knew they wouldn’t bite. Drifting in middle of lake, 11 lb striper grabs his line and he brought it in. I got nothin.
Well, if we could put economies of scale aside for the moment and just focus on plant vigor specifically. If I just want to plant a single chinese chestnut tree and have the most vigorous tree possible (let’s say all other things being equal, and for the purpose of argument I can’t do both) would the best “bet” be to seed start or use a transplant?
Plant 10 seeds where you want the tree provide protection and cull down to the best one.
But YOUNG transplants, seedlings, tublings, etc, do not loose very much. They really don’t.
Timing is a big thing too, seed is planted in spring in a thin window. Seedlings and 1 year plants are best set out in fall either dormant or on the way to dormancy.
I wanted to respond to Ben remark about Carl Whitcomb who did research on air pruning, side step above and in ground containers. Planting tree seeds direct in ground will give you a much larger tree than buying a $15-20 nursery grown tree and planting it. Carl Whitcomb methods will enable you to plant spring seeding in containers and plant container in the fall (. Fall is much better time to plant less stress plus is not as busy time of year. Using Whitcomb root pruning methods can reduce your time to grow a 2 inch caliber by 25 to 33 percent depending on your climate. Ben is right this is a great way to grow trees for permaculture.
Excellent interview. Mark Sheppard is a veritable font of information! Although I cant follow the “debt to death” thing, I will be listening to this again.
So I know that jack has covered the “fifedoms” before but don’t remember anything about the Sched-F forms and their implications, responsibilities and benifits to the agriculturalist. I got that filing an F form for 3 years establishes your enterprise as a farm but how do you go about leveraging that on a small scale and should you?
I think unless you legitimately plan to make a living at some point with “farming” it isn’t worth it. But if you ever do plan to become a farmer for a living even at the small scale it is.
Yes. That is what we plan on doing in about 4 years when I retire from the Marine Corps. Planning on design and small scale nursury until then as an aditional income and farm nest egg. I have also been throwing around the idea of bringing people together as an agricultural match maker as an additional part of the buisness. Grandma and Grandpa have a large lot but dont have the energy to do the garden. I pair them up with a youunger couple that may live in an appartment with no space and strong backs. I know this kind of stuff used to happen all the time but dont see it much anymore.
Great show, and worth the wait! Funny hearing about how he’s working his debt and his next project HAS to be 800 acres…I suppose if anything has to keep growing to cover debt with new debt, it may as well be permaculture. Not the way I want to do things in my life, but I don’t plan to the tell my grandchildren about the thousands of acres I brought into food forest production either. Good for him and anyone else out there looking to do good within the systems as it stands and functions (disfunctions?) Currently. Tons of good info and I found the corporate structure to be very entertaining. This will be one of the rare episodes I listen to several times.
I just tried to type some comments and backspaced both paragraphs but the point was in one word. Profound.
I will listen again and comment again. Ohh and I really expected more comments from we these people. I hope to see more from us tomorrow. Thanks jak
I’m glad to know I was already supporting Mark through Organic Valley. I love their milk!!
We just discovered their milk a few months ago….delish. Now the “standard” milk companies’ products make me and the kids sick.
Allergies sick? Some people are allergic to milk or something in the milk.
We just seem to have a hard time digesting regular milk products when we stay with family or run to the gas station quick because the little one polished off the milk. Organic Valley milk products are just so different…taste, mouth feel, digestibility. Its like eating turkey bacon your whole life, then out of the blue someone hands you the real deal…bam! No going back.
I don’t know what the difference is between Organic Valley and the other “dead white stuff” is, but Morning Glory or Kemp’s makes me bloated and heavy feeling and constipates the little one.
I’d love to try raw milk, but its all but impossible to come by in, of all places, Green Bay WI. Maybe when I go to the market Saturday I can cipher some sort of set of codewords to use with the sellers that will grant me access to unpasteurized milkstuffs.
Is it raw milk? If so there is your answer but if it is largely distributed I doubt that is the case.
It MIGHT be a simple thing like a more gentle approach to pasteurization that some how preserves a few of the normal lost enzymes.
It also MIGHT be the feed of the cattle making the milk. You MIGHT all have a allergy that is passing though normal milk.
Based on your description it also sounds like they remove less cream than typically what is called “whole milk”. Whole milk is no longer while milk, it is less low fat than the stuff called reduced fat is all.
Loved the interview! One thing that got me wondering though is the bit about debt. In his book, he says how part of the problem with the current ag model is that farms must keep getting bigger. But it sounds like he’s saying, from a financial perspective, that has to happen with permaculture as well.
Now, I will admit that I don’t have a great understanding of why real estate debt is actually good, so maybe it has to do with that. But then are you saying that a permafarm of only a couple hundred acres owned free and clear and operated by one farmer won’t work financially? At what point does things get too big and get out of hand for one person to manage but still needs to keep growing because the numbers “say he needs too”?
Bothered me a bit too, I tried to temper it without debating it.
My real concern is people hearing and trying it without the knowledge necessary to do it right.
On the bigger, that I don’t see being the issue so much here. He seems to being setting up LOT of farms and bigger projects seem to be more farms not bigger farms.
He also has a pretty massive goal, to replace not augment current ag. To do that will require the approach he is using but I must say it ain’t right for me personally. I will be discussing some follow up on todays show but this is pretty much the jist of it.
One thing that I heard him mention but not address further (at this point in my listening to it) is that he is referring to the agricultural component as the stewardship of the land, but not necessarily the value and true money making component of it.
In my opinion, the next step he needs to take (which I’m sure he’s on top of it) is value added products, and more bank rolling services that can help tidy up the loose ends. There is so much additional value I think he can build that is NON “food product based” that could pay off the land in no time.
Based off of what he’s said in the interview and his outlook, I definitely know he already knows all of this stuff. This interview just tells me I am going to have to visit and speak with him probably sooner rather than later…
Well I mean this is what Shepard’s Hard Cider is.
Like I say in EVERY show on business though Mike, if you want to be bigger than just yourself you largest problem with always be PEOPLE.
You can have 100 potential enterprises but finding one person to do one well is difficult, very difficult.
Most people are full of shit and excuses. Offer them a chance to write their own paycheck and they turn to you and ask you to write them a salary for a year in advance first. USUALLY not always but USUALLY when you agree to do it they don’t ever get off the tit!
Being paid a wage makes it easy to put shit off, spend other people’s money and not get shit done that MUST get done.
I have gone off employment, I now do contracts with clear dates and exit strategies. You want to make a living we can help, we will give you a place, the resources but you either produce revenue or you go hungry.
The hard side is most people willing to really do so with your help, have already done so without it.
About 3/4 of the way through proved what I was talking about. Brand development, passive income streams, and outsourcing a lot of the fullfillment. (Let others do as much of the work as possible where you don’t even manage them at all).
Replying to the above response.
Regarding the “problem of people” I’ll say, lets invert that and turn the problem into a solution. No questions asked, you cannot build an empire without people. Period. You can’t even market and build your brand “by yourself”.
Everything you’ve stated I’m with you 100%. I don’t like the idea of “employment” what-so-ever. I will note though that being “free” to “not think about if money is coming in” can certainly be a liberating task, but ultimately you need to create as product/service that sells, which as we both know, usually requires you to consider money.. uhm at least a little.
“The hard side is most people willing to really do so with your help, have already done so without it.”
I might say this is your particular perspective on it, which I interpret as a scarcity rather than abundance view. That is just my reaction to a statement. Think positive and attract positive people. I’m sure there is no shortage of amazing talent, who “dont’ know no better” for Joel Salatin or Mark Shepard. There might be EVEN MORE if the branding was bigger and bigger and bigger.
It’s one reason why I believe cultivation of human beings is one of the most important things we can do, particularly as leaders, of which benefits in both directions. I’m sure you know all this already hah, but I figured I’d state it out loud anyways.
Awesome interview thanks for locking this on.
I’ve been a small business owner several times over the past 40 work years of my life and the people factor was always way too critical. Not all people but certainly a majority are trained to be co-dependent on systems of dependency and entitlement.
Before I became a “Sustainable-addict” and still building one of my most profitable small business ventures, I was sitting at my desk one night searching my heart for a word that described what I was after in the process of building a business that provided such things as value added service, streams of revenue, scales of economy etc… etc… The word was right there on my tongue but I couldn’t spit it out. Suddenly, like a revelation from heaven it came, “SUSTAINABILITY”. Then I looked at my people roster and just shook my head in dismay. How was I ever going to achieve that word with the folks in my employ, which was about 17 at that time.
“People Care” is a Permaculture Principle so building a Permaculture business should require good people recruiting and nurturing skills, right! The problem is, a true business, which I believe Jack and company are working towards, “IS NOT A CHARITY or MINISTRY”… Too many times employee’s think that your business is their personal charity. That business’s primary goal is to provide revenue, employment and in most cases confiscatory capturing of the profit cream by Uncle Sugar. This thought spins us to the real challenge of creating Perma-People. You have both tilled up the soil of an issue from two different perspectives and I believe Mark Shepherd has a third perspective, hence Jack’s comment, “we are deep into it depends”.
We and our parents have allowed all this to happen to us, you know…
Our children have little choice or opportunity to learn differently, so let’s change things up for them. With great risk of sounding too metaphorical, my proposal to attack and solve the People dilemma is to go to the root system of the problem, (the problem is the solution) design and develop a Perma-People Institute so that you can take a small sapling of a child and nurture them in the Perma-way and develop a Tree of a Perma-Person, then transplant them or export them into a patch of society where they can put down roots and express their full human potential by producing their own sustainable fruit. My hope is to develop young men and women that are free of Uncle Sugar’s full and exploitative influence of dependency therefore producing a crop of “SUSTAINABILITY” minded young men and women. I see where Mark has planted his own family seed into the soil he has built by developing his own children in that Perma-way. I am sure that several in the audience are prolly get’n it done this way as well. The Shepherd’s are a wonderful example of a Perma-Family.
Hey would you mind shooting me an email? I’d love to chat with you offline.
mike@freedomlouisiana.org
And yeah, that’s fine for him, but I agree, it’s not for me. I’m going to “do it my way” 😉
I really enjoy listening to Mark and respect his volume of great agroforestry and permaculture work. I’d just caution any young/new permies to be careful trying to heavily leverage your way into profitable Ag or farming. I’ve seen leverage work well for some people in certain cases, however; more often I’ve seen folks get devestated when they couldn’t cash flow monthly obligations. If you’re eager to start and without deep pockets, I’d suggest you look at one of Joel Salatin’s models of leasing land first. Pay an above market lease rate conditional upon the owner granting you The first right of refusal to purchase the property upon any sale. You can generally renew the lease and if the owner/heirs decide to sell later, you are first in line. It’s ended up in a purchase at a below market price for me on multiple occasions since 1992. Just my $0.02
In my opinion, I’d say taking too much caution does more harm than good, in almost any situation you look at.
If its a matter of debt leverage to give something a shot, especially big and spectacular, or just live a regular life, I’ll choose debt leverage every time. Again like Jack talked about, “consumer debt” is a totally different situation. Or any kind of very legally “protected” debts (like student loans).
I think people’s fear of “going bankrupt” does a lot more harm than good. While I don’t consider my parents to be a great example they filed for full on bankrupcy about 15-20 years ago. I asked my mom the other day (just to prove a point) why they went bankrupt and she didn’t even have a clue. Has zero effect on them today and they can’t even recall why. Ignore the fact she has a crappy memory about something they should remember for a moment, to take in the fact, it doesn’t impact them FOREVER.
We have one life to live, and if we’re going to wager “it all” (its not it all, not even close) to live a better life that is productive, and healing, why not? MOST people who “go broke” trying and doing new things, aren’t homeless, unable to eat, etc. They’re setbacks and temporary pull backs. If you’re willing to put skin in the game and give it a shot, you have the caliber to go get a job and get back on your feet.
Let me add if you do this right you set up a company, the company borrows, the company spends, the company pays distributions. Etc. Should the company fail the COMPANY goes bankrupt. You may have to fund or leverage your personal assets in your first deal, so you do it really smart, make a decent profit, build up some capital reserves, then borrow as the company and at that point you can pay yourself back what you put in.
So New Mike doesn’t go bust, NM LA, LLP goes bust. Make sense?
The one thing Mark said that was inaccurate was Trump went bankrupt twice, nope, Donal Trump the man has never gone bankrupt. That is how he goes bust and then steps onto a private jet. Trump B Inc. went bust but Trump C Inc. owns the Jet. Trump A, Inc owns Trump C inc by the way while Trump D Inc. owns Trump B, Inc.
Trump even has a book on this type of structuring, remember at one time Franklin-Spirko, Inc was a consultant to Trump, we helped sell this book,
http://www.amazon.com/Trump-University-Asset-Protection-101/dp/0470174641
In a nut shell control every thing with a corporation, control every different thing with a different corporation, have corporations own your corporations and own those corporations.
Control wealth and be as close to penniless on paper as you can.
You want to sue me, go ahead, I have nothing. We will take your house, I don’t own it, Company XYZ does. We will sue you for Company XYZ, I don’t own that one either, Company ABC does. I do happen to own Company DEF, they happen to own ABC but well, we have a no risk rider between us, so legally you can’t sue them though me. You can sue them but your issue is not with them it is with me and I don’t have much.
I’m actually quite grateful he brought the whole tax thing up and you guys drilled into this.
When I was starting my LLC Nursery (which at this point is just me paying money to receive spam galore in the mail), I spoke with the CPA about various tax and asset strategies. A lot of what Mark spoke about, is making me feel like I need to spend a lot more time considering it.
We discussed purchasing land (as a company) and using it as a “2nd home”. Payments on the land instead of being “mortgage payments” would be “cost of doing business”. If you retired and lived on company land, or you use it as your summer home, it doesn’t really matter.
Using a rental “company” is definitely a much larger gold gem than probably many people will realize. The rental company owns the assets, not the business. If your business owned the property (as i described above) you could lose your house in a lawsuit or bankrupcy (of the business). Not if its owned by a rental company totally unrelated.
I think one thing to think about much further is the concept of ownership. (I know this was heavily discussed with Xaviar Hawk) But ownership (freedom) is really all about control and options. Whether its “in your name” or not, you can do just as much or clearly more if you “owned it legally”. Mark hit on the idea of removing concepts from reality. Good lord I have been on that kick in depth for months and months and months, even years. Concepts are boxed versions of reality that continually need to be adjusted based on feedback provided via our senses and understanding of what we’re observing.
Awesome show as always! I could have listened to you two talk for hours! Thanks again Jack and Mark!
I like Mark and loved the book, but I have some problems with the content of the interview, but correct me if I am wrong on a few points…
1. Mark stated that we are ready to switch to perennial crops, but he seems to ignore a major issue of mass harvesting. If I waved a magic wand and turned a 1000 acre corn field into a 1000 acre diversified Chestnut savanna, you may produce more and better food, but I don’t see how you can harvest it all. Rotating animals through will harvest a lot, but I believe chestnut harvesting without monocropping is still a largely manual process. The only tree crop that has started to solve this issue is hazelnuts. Am I missing something?
2. As the guy who goes out and tries to convince farmers to switch to new methods, shouldn’t he avoid saying that it doesn’t pay? That whole roll the debt onto future purchases stuff was VERY troubling to me. I’m no financial wizard, but what it sounded like, and this is an echo from the book, is that farming doesn’t pay, but that’s OK. What does pay is the real estate investments. You buy abused land cheap, farm at a loss, but use permaculture and government incentives to improve the property enough so that the increased property value offsets your losses. All the while protecting other assets behind separate corporate veils. Then use the increased property value as capital to borrow more money to buy more land to continue to farm on a larger scale at a loss. I think I understand how this could work, but it gives me the creeps. It bothers me because I don’t think this is what he is doing, but he seems to like to tell the story this way. He says that he lives his life in an expanding debt bubble which pops at his death and then the vacuum is filled with life insurance. I’m just saying that this tale may go well to farmers who swim in seas of debt, but it should be repackaged for other audiences. Correct me if I am wrong, but it sounds like if you were doing this when real estate values crashed, or you made a bad investment, you’d loose it all. I guess the diversity of the corporate compartmentalization would be part of your insurance, but wow, I just think Mark needs a better sales pitch. This one makes him sound a little like a scam artist in a permaculture Ponzi scheme and I think that is the exact opposite of what he is.
3. The whole nursery versus planting seeds seems a little disingenuous. In the book I believe he mentions that nurseries are a waste of time and tells a story about convincing someone not to have one on property just plant the trees where they will ultimately go. That is a little different from saying that you should farm out the task of turning seeds to seedlings and then plant the seedlings. Am I remembering that wrong?
I think you misunderstood. That client wanted a nursery to buy plants from a nursery at, then plant them in that grow area only to replant them later. Not a nursery for the propagation of new plants.
Richard, thank you for posting your point 2. I came away with the same impression. I have to pop a cold one and give this podcast a closer listen tonight. I am thinking that my D.Ramsey induced perspective may be the problem. The programmed aversion to words like “debt” and “leverage” to folks that have used his methods (to great success) may actually be a disadvantage in this particular case.
Point two, you may not like it but it is true. In fact I would say farming is a terrible way to get rich but it is a great way to buy and develop land and get rich from doing so.
Do you know what the average corn and bean farmer makes per acre? That would be 339 dollars! Yes 339 and no cents.
Which means if you farm 100 acres and hit the average (many fail to) you can expect to make about 33,900, on that note, compared to any decent job, farming doesn’t pay shit.
So I don’t begrudge a man for telling you the truth even if you don’t like it. As to how this effects converting farmers, it doesn’t hurt they already know they don’t make jack shit.
Let me put it this way, multiple choice test.
Why is McDonalds one of the richest companies in the world?
A. French Fries, Burgers and Milk Shakes
B. Real Estate
C. Using the Sale of A. to acquire B.
So if I buy a 100 acre farm, farm it for 10 years and it pays for itself in that time. Even if I made 50K a year from my LABOR on it during that time. But ten years later the debt has been paid off, I flip the farm and sell it for say 3 million dollars where has my actual profit come from?
By the way the answer to the multiple choice question, it was C.
If I hear you corectly you are saying you personaly would not take the same aproch as Mark, but understand his aproach.
You are also saying farming will not make you rich.
What is your opion on a permaculture desinged farm providing a comfortable living with out doing classes, books, speaches? By comfrotable I am mean meating your necestities food, water, shelter, clothing, taxes, morgage and a little extra money.
Is there a way to do that and hand it down to the next generations with out having to have 10 difernt papper companies?
It is fine if you would like to awnser on the proposed monday show or another show so you have time to articulate and explain in an easier format.
The major thing I took away from the interview is I have been asking the wrong question how does so and so do it and how are they making a living. I need to ask How can I make a living on a permaculture farm?
Hate to do it to you but dun dun dunnnnnnnnnnn it depends.
But the answer is absolutely yes. Mark is coming at this from a mass production model. Further if you read the entire book not just parts of it, farms even in his model do become VERY profitable in time, as inputs decline to almost nothing.
It is not that farm revenues are bad, it it farm profits that are bad.
Let us do some math and see what I mean
Typical price of corn say 3.50 a bushel
Typical yield of corn per acre is about 150 bushels =
150×3.50 = 525.00 an acre of revenue
Meaning 100 acres generates about 52,000 and change.
Farmers if they are lucky make a GROSS Profit of 339
Now that is just gross, most are netting more like 100-150
You do see the difference right there correct?
In the early years where Mark was doing some alley cropping for produce and running animals and not getting a yield at all from the tree crops he was as high as 4400 an acre but only on the land being heavily worked for production crops.
10 acres that way with pretty low inputs is a gross revenue of 44K, 100 acres with LOTS of inputs is 52K, which makes you more profit?
Frankly I think a 10 acre homestead can make a family a living, especially if they are smart. If I wanted to do this, first thing is first, pay for the property and make a profit doing so.
Easiest way? Rental income.
Make sure first to be in an area where you are not screwed with and can do this. Take out a loan for about 40K (if you can) or pay from pocket if you can instead and put in two small cabins, like two bedroom type things for about 20K a piece. This will have to include a well likely. Have power metered to them so you don’t pay the power bill. Find two people or two couples that want to live in such an environment and rent to them at say 450 each. If I take an equity loan for that (gasp) people say look at the debt.
I say here are your numbers
1. Loan of 40K on a 10 year loan = 415 bucks
2. Rental income monthly 900
3. Monthly profit = 485
I may have to do a lot of the work myself, build one, put in a tenet and then build the second but I can get this done in year one. Keeping such a home occupied on a farm like this, not too hard to do.
I know have a cash flow of let’s round it down to 400 a month. I will also depreciate the structures for an expense each year. But that is another angle.
They key is I now have 400 a month to invest in my “farmstead” which is 4800 a year.
That is but one way to do things! There are a million, if you just want to do it from production it can be done but doesn’t the above make a ton of sense. I mean I can get the shell of building that can become these cabins installed for about 12K on site where it just shows up. This gives me 8K to finish each as a DIY. It can be done cheaper but that would be highly expedient.
Now I also have 2-4 people that look after my property, I can take the occasional vacation. With a 10 acre place I can put them off to one end and it is just like they are distant neighbors. If I have great internet I can resell that to them with a repeater most would want that, say I charge 20 bucks each, or they can do a few chores a month and get it free. Since it doesn’t really cost me and I need the net anyway I’d prefer to barter for it.
You can it depneds me all day long, just means my question is not specific enough.
OK Still reading the book takes time. 🙂
I am still studing it all out but looking at Joel Salitan, Mark Shepard, Goeff Lawton, Ben Faulk and others and I begin to wonder are they doing the PDC, consulting books and speaking becasue they need the money or they want to help others or a little of both.
I know my abilities and limitaions and teaching PDC’s and dealing with people in large numbers is a not a strong suit. Getting plants to grow in my garden I get better and better at.
Just began to wonder if I was wasting my time trying to find the skill set, cost, profit, niche that will work for me.
I have lived my whole life in Kansas and watched farmers try to make it work and have to work other jobs to make it work.
@david ks (wrong reply level)
I already ranted on this below.. but the real issue IMO.. is that you don’t need to start with ‘how does successful person x do IT’.
What do YOU want? Is that the same thing that person x wants? If so, then you can take a look at their strategies.
YOU are unique (talents, gifts.. weaknesses).. your strategies need to be based on YOUR goals.. and your abilities/resources.
The only exception to this.. if you see somebody doing something and you think ‘That guy is EXACTLY like me.. and what he’s DOING is EXACTLY what I want to be doing!’ (This happens once every 100 years or so.. )
Improvise – Adapt – Overcome
Know thyself.
I get that traditional farming is not a lucrative pursuit. And as stated I think Mark is profiting from his land, but the reason I have a problem with the plan … as stated in the interview…, is that it isn’t permaculture.
It isn’t farming, it is mining and if it is as stated and the land isn’t self-sustaining, then the system isn’t self-sustaining. I have no doubt that it could be profitable, but I consider it mining because it relies on a finite resource of low value land which can be restored to create value enough to finance the next property and support the existing property. The reason it isn’t sustainable is that if he is creating properties that are not self sustaining then at the end and the bubble bursts, the system would loose the momentum it requires and then the system would work in reverse and the properties would have to be sold one-by-one to support the remainder.
The thing is, as I said, I don’t think this is what he is doing at all. I think Mark worked hard to create a good credit rating, and a ton of real estate knowledge, then used it to buy a property, then worked his butt off selling annual vegetables and running animals to finance the planting of thousands of trees, that once mature, allowed him to dial back the annuals and profit from the perennials. Then he probably handed off growing some of the perennials off to others so he could value add on the apples and make cider. I think during this process his original land increased in value enough to finance further land purchases.
My guess is that he has been asked sooo many times for a simple “get rich quick solution” that he has spun portions of his complicated plan out to little stories that are simple enough for those with short attention spans to get and the whole “snow balling debt bubble” is one of those stories. It is as if you kept bugging a permaculturist about what permaculture is and didn’t want to hear any long explanation, so they finally broke down and said “its a better way to grow plants” or “it’s water management” or “it’s replacing annuals with perennials”, etc. Each answer has some truth, but only a tiny part of the real answer, so ultimately false, because the answer can’t be simplified to that degree.
I’m looking forward to your thoughts Jack.
@Richard I can not tell you how much I totally disagree with this statement,
“It isn’t farming, it is mining and if it is as stated and the land isn’t self-sustaining, then the system isn’t self-sustaining. I have no doubt that it could be profitable, but I consider it mining because it relies on a finite resource of low value land which can be restored to create value enough to finance the next property and support the existing property. The reason it isn’t sustainable is that if he is creating properties that are not self sustaining then at the end and the bubble bursts, the system would loose the momentum it requires and then the system would work in reverse and the properties would have to be sold one-by-one to support the remainder.”
So your problem is at some point on the shitty land might be made into Permaculture land and that is unsustainable?
I think your problem here is because of certain biases against debt (which I share) you are not hearing what was actually said. The properties Mark develops over time are paid off in full and then the process is repeated. Could HIS PERSONAL BUBBLE pop, sure, BUT then what, all the properties that are converted and paid for are now in his own words, “not owned by him”, so fine I lost, take this last property or two and repossess it, let me turn around and admire the 1000 or 10000 acres I have restored that you can’t touch.
I ain’t going to lie, I don’t feel personally comfortable with his approach and I will not take it and I would say anyone doing so better really fing know what they are doing.
But I do know this, we in Permaculture keep saying we want massive change, we want the monocropping, poisoning, animal abuse, top soil loss, ocean destruction and 5000 more things to stop. Well this world runs on money and the flat reality is those that know how to leverage money as debt in a debt based economy get more done than those that don’t.
Now MY goal isn’t to transform 1 million acres, I will settle for helping 100 farms make the transition. I do that and when the flaming arrows light up my reed raft know I will be looking down, drinking a celestial mead and feel I did my part. People like Mark, want to do more.
I mean the guy isn’t flipping properties, perhaps one or two to get working capital but what he is really doing is transforming them.
He has simply taken the modern economics of farming and started planting trees instead of corn if you want to make it as basic as possible.
So when farmer Dan can’t plant his corn this year because he is broke his field grows weeds and sits idle. If farmer Mark can’t plant his field with ______ oh yea he doesn’t have to plant anything, that’s right.
Again, I found a lot of good nuggets of info in Mark’s interview, but at times I was surprised by the real estate and financial advice. I laughed and thought Dave Ramsey would have had a coronary listening to him! Mark’s got more trees and plants and Dave has more money and real estate. I guess you just pick your team and go for it. Just have that attorney and CPA on speed dial!
Why do you you assume Ramsey has more real estate?
I hate many forms of debt but again real property especially the development of it is a good place to leverage debt if you know what you are doing.
Ramsey should stick to what he knows, consumer debt elimination and nothing more. Every piece of investing and real estate advice I have heard has been horrible from him.
That said Mark threw me off a bit with some of his views. I was really wanting to talk about chestnuts and apples more than debt leverage. It isn’t that Mark’s approach is bad it is just risky and it requites a LOT of risk mitigation. Frankly I think he gets that and has it down pretty good. My concern is others just taking on debt to “buy a farm”.
I’ll have some concerns I will address on Monday, I was going to do it today but Monday’s show seems a better venue then a friday call in show.
Again though on DR, man I don’t think anyone should take the investment advice of a man that said not to worry and just keep buying stocks from June of 2008 right though the crash and flipping denied the crash was a crash!
On real estate and investing Ramsey is either a fool or a liar. He is either dumb enough to follow his own advice, which makes him a fool. Or knows that his advice isn’t sound and is lying to meet his marketing, either way I’d not take said advice.
The truth is I think it is both. I think Ramsey to a degree believes his own bullshit but doesn’t manage his own money and portfolios. Most people with his money don’t, if he does and follow his own advice again the thought a man who represents himself in a court of law comes to mine, “he has a fool both for council and for a client”.
A fabulous interview! I thoroughly enjoyed every minute of this interview. Where I was particularly intrigued was when y’all began to discuss business structure. I mean, I understand tracking inputs versus outputs, etc in order to track profit of a venture. But it seems to been (and always has) that in order to have a tax efficient structure that protects assests, there’s a tremendous input there. I’m not saying it’s not worth it, but, as an engineer and not a lawyer or accountant, I find it hard to focus there rather than actually fixing a problem. Could you talk Monday about the importance of business structure, tax effiencoency and asset protection in a commercial farm and homestead setting?
Homestead meaning perhaps several small streams of income say small amounts of eggs, plant propagation, livestock, honey, timber from a less than 20 acre property
Great to finally have Mark on the show, have listened to many of his interviews…was top notch Jack! I would really like to grow some American Chestnut from seed but have had a hard time finding seed nuts vs seedlings. Have a few acres in WA I want to experiment with, any help from the audience would be great.
This may sound like it belongs in the comments for Episode 1418.. but reading thru these comments..
The big question.. WHAT do you want?
Only after answering that should you be moving on to HOW are you going to get it?
Based on what Mark said in this interview, what Mark wants is to ‘Restore as much agricultural land as possible in my lifetime’.
Based on HIS actions, his goal is NOT to ‘own my own homestead free and clear’ or ‘make enough off my land that I don’t have to work a job’.
So.. his strategy, his HOW.. is leveraging his property to the hilt, with the intention of gaining control of EVEN MORE property that he can start restoring.
There is no ‘Master Strategy for All Goals’ TM.. despite what’s being sold on late night infomercials.
Are Mark’s financial strategies sound? Will they work for you?
It Depends. 😉
WHAT is your goal?
Does Mark’s strategy work for Mark? Yup. If it didn’t, like any good permaculturist (or businessperson, parent, Marine.. etc. ), he would have observed where it DIDN’T work.. and adjusted his approach.. until he was getting the outcome he was shooting for.
I am SO HAPPY that Mark Shepard is doing what Mark Shepard wants to do.
I am SO HAPPY that Jack Spirko is doing what Jack Spirko wants to do.
What do YOU want to do?
Well put!
Awesome interview, but the last 20 minutes were pure gold to me!
I, along with most of the commenters, do not plan on taking the debt-based approach to starting/maintaining my permaculture farm. I am so happy Mark discussed this on the show though. When I went and saw him talk back in May or June, he was talking this way about debt too. It really made me rethink my beliefs about debt and how it works. I had such an aversion to it and now I understand debt can be good sometimes, under the right conditions, and with the right knowledge.
Also, I have to say that Insidious’s comment above pulls this all together for me. Mark is doing what he needs to do to make his dreams come true. Dreams are as individual as the person who has them so the manifestation of those dreams is going to be different for everyone too. I’m just grateful that Mark shares his story so that we can all learn from it and adapt it to our lives.
One thing that I think was missing from Mark’s comments is what happens if something really bad happens early in this process of highly leveraging? Your first property you will need to fully back personally. So I decide to go out and buy 100 acres of crappy land, using tons of debt to do it. I did the best I could, and did 30 soil samples all around the property, and they all showed that the soil was denuted, but not toxic.
Then I get started and find out certain areas of the land have substantial lead contamination, but I only sampled about one out of every three acres, so I missed that. So we can’t use that land for alley cropping or anything other than fruits, since the wood and green matter take up the lead, but not fruit.
Ok, we get started, I buy 10,000 trees at $2 each to jump start the seed planted trees, using almost all of the last of my cash. I then alley crop the area with ten different types of annuals. I’ve now worked 120 hours a week for the past two months. A 500 year flood event happens, or we have a hard frost in late June. This kills all my trees and annuals. I now have $100 left in the bank, and a $5,000 per month land loan starting in six months. Without the crop yields I can’t possibly pay, and now my savings and farm are lost. I have to declare bankruptcy, and it will be 7-10 years before I can try it again. I’m already 40 years old, so do I even bother trying again in ten years?
I am one of the most risk adverse people in the world, so my view is heavily slanted. However, I think everyone frequently looks at only the upside of a highly levered business venture. The whole idea behind leverage is to do more, faster than you could without debt. However, the more you leverage, the higher the potential gain, but the higher the potential fall; with a floor of bankruptcy. I could not imagine how anyone with a family could go into something like this. Perhaps if you were a 19 year old guy, you could go all-in. If you fail, hitchhike to PermaEthos and be an employee till you’re 26 and try again. If I go bankrupt right now I’ve let my entire family down, and will reset 30 years of progress.
Very unrelated, I wish he talked a bit about the amount of human labor as an input in a permaculture system. From what I gather, all the successful permaculture farmers are only wildly successful because they have an unlimited pool of free labor to pull from. I recently watched Geoff Lawton’s chicken tractor video for a second time, and I notice in every scene he has 5-6 free laborers toiling away to make the system work. Is a broad acre permaculture farm sustainable if you have to pay a wage to laborers? Or is fifedoms the only answer, which is really just punting the labor cost down the road to the point that the “business owner” is not valuing their labor.
I remember someone once saying that the holy grail of permaculture is to provide a “white collar” salary, otherwise people will always be taking a step backwards when they leave the traditional work environment. Perhaps the lifestyle and ideological changes will be gratifying enough to make that change, but I wish we could find a way to have a white collar salary and do the right thing.
Two problems with your above story.
1. It is completely made up and fictitious but you wrote it like it happened to you.
2. IT IS NOT EVEN CLOSE to what Mark suggested anyone do.
Hey Jack, you are definitely right that it is fiction; re-reading I can definitely see how it looks like my wall of text turned into a personal narrative, instead of a fictional tale of the worst case scenario. It was made to highlight how just a few unfortunate events strung together could mean doom for someone being highly leveraged. Whereas if someone starts it slow, with minimal debt, an almost unlimited number of unfortunate events could happen and they would not be sunk.
The flip side though is without debt you won’t ever restore 100k acres in your lifetime, unless you do something like what you are doing with PermaEthos, or even TSP – empowering others to lead the fight too. But that’s not my goal, my goal is to make sure my family and community continually gain food security, and improve the environment around me.
I’m sorry Jack I love you with all my heart, but no way in hell, …borrow money.? If you can’t pay cash, you can’t afford it….period! My Grandpa taught me That in the 70’s
At least for me, for business this doesn’t apply, in fact it doesn’t even really make sense.
The problem is debt isn’t being viewed as a “it depends” situation which is where it is called for. With the amount of negativity surrounding debt its not hard to understand why there is so much financial illiteracy about it, but more importantly an unwillingness to think critically about it, what it is, and its reasonable uses.
Taking out debt to purchase something that does not pay for itself, first and foremost is a non-starter and can best be summed up as a waste of resources. (In my opinion). The only exception I MIGHT have for this, is at the start of a business where income and profits aren’t coming it at all. But any business taking out debt to finance daily activities is another story. This is quite different than taking in investors who want equity or investors who just want ROI via interest for something like growing or starting a business. “I will give you money so that you can create something awesome, and when it gets large enough to support itself, you can give me my money back plus some additional value.” Not exactly the devil’s play people act like.
Mark aptly described interest as what it ACTUALLY is. The cost of money, particularly somebody elses. If there wasn’t interest on the money, people would squander resources more than they already do. If you take out debt for something it should put a fire under your behind to get accomplished what you want accomplished.
Your statement basically removes the option of you taking money from friends and family (a debt) to accomplish something they might also want. By the same token no debt would mean no kickstarter. There really is no difference on a balance sheet. They have purchased something with terms, and there is an expectation of ROI. Because you don’t receive your goods when you purchase them with kickstarter, backers are extending credit to the company.
I agree with New Mike I also say it doesn’t apply to real estate period. I guess you are a renter for life Shannon?
It doesn’t even make financial sense to buy a house for cash right now, it really doesn’t. Pay it off early, yea, there is a case for that but to out right pay cash for a house unless you are totally flush with millions in cash, no way.
tree crops, the book that mark references, is available to download for free as a PDF from soil and health library.
http://www.soilandhealth.org/01aglibrary/01aglibwelcome.html
Look for:
Smith, J. Russell. Tree Crops: a permanent agriculture. New York: Harcourt & Brace, 1929.
My antenna went up big time when the Get Rich seminars were talked about without any negative connotations. Obviously he put in work and effort but going to more than one of those doesn’t speak highly in my opinion. Good for him for his success though.
Really I went to far more than one such thing in my life. Never bought their product they were selling or anything but went to them, so does that not speak highly of me Dustin?
Dustin, I am saying this with 100% no tone, or negativity what-so-ever, but as trying to deconstruct what mark said so its clear because I don’t think it quite came across from him as it should have, based on your statements.
When he says “Get Rich Quick Seminars” you’ve got to understand the level of tongue-in-cheek when people say this. It is kinda a “thing” to say “Get Rich Quick” when you’re referring to business and marketing seminars. Now obviously I’m speculating from this, but I’m coming from a very similar perspective as Mark, when he says these things he was looking into entrepreneurship, business, marketing, and how to improve himself and stand on his own two legs.
I’m sure there are plenty of the “negative” “Get Rich Quick Seminars” out there, but its more of a “thing” to call ALL of them that, with a smirk and a laugh. If you don’t believe me go listen to business podcasts, read business blogs, etc. You’ll see it everywhere.
I think in general Mark Shepard’s name definitely comes way before him, which should speak much higher of the path and his ways than people automatically assume. I don’t look down on Mark for going to “get rich seminars”, by any stretch.
A. getting rich means you would have had to provide an immense amount of value in aggregate, either a little to a lot of people, or a ton of value to a small number of people.
B. He’s willing to go and explore all sorts of opportunities without snubbing them. “A permaculturist went to a get rich seminar!? Say it isn’t soooo.”
From this interview I actually contacted my CPA to have a sit down on Thursday.
My opinion, as I stated, is no. My opinion is not the be all end all. To each their own, just have seen to many of my family and friends part with their money and then rinse and repeat in those seminars. No offense intended, just personal experience.
Did you notice what Mark said the value of those seminars were to him? To learn how to write an offer letter, to learn how to tell your story to a lender, etc.
Now I am not going to lie I do have a hackle or two up now with Mark and some things he might be doing in the future with “teach people how to do this”.
Will I approve of how he does it? Don’t know, it depends but I am paying close attention. I don’t like the vibe of those seminar things, I really don’t but they were helpful to me at one time.
You and Mark were stronger people than those close to me. Again, to each their own and value can be found in anything. Sorry I brought it up.
I’m not (sorry you brought it up). It’s some good questions and worth fleshing out.
I’m sure it probably made you realize that “getting rich” is a totally different beast than what people make it out to be. (On any and all sides).
At least that is what it feels to me. I haven’t personally been to any seminars, but I’m always keeping my eye out. I’ll be looking for seminars on particular topics that I think I could use some improving on.
Great show! Lots of great information and got me thinking more about needing to set up an LLC and start deducting expenses. Lots to learn.
This one too, this guy was awesome, I don’t care at all about permaculture sorry, but this guys attitude by itself made me want to to jump right into it, he is very realistic. “Its time to stop playing with bricks making rocket stoves and go all in ” or something like that damn!!!
I think more people would “care about Permaculture” if they would look beyond apples and vegetables. Give me a problem, I will show you how to solve it with Permaculture thinking.
If you say “I don’t care at all about permaculture” what you are really saying is, ” I don’t care at all about a method of trouble shooting and design that can be applied to any and all businesses, problems, life styles, etc.” whether you realize it or not.
Have you ever heard these podcasts I did on business? Start with Episode 112 if you listen to them, http://www.jackspirko.com/tag/8-forms-of-capital
If you liked Mark you will LOVE these.
Other people’s money in a nutshell. Sound like a recipe for the next Permacultre bubble.
One of the more shot sighted and jaded comments of all time at TSP.
I actually relistened to the part regarding shuffling the LLCs so I could direct my CPA for important information.
I caught something I didn’t hear the first time (or as well). That is that he described PAYING OFF THE DEBTS before getting new ones. He said “you start with one, you pay off those debts, then another and then another”. Nothing about what he said described bubble, or anything else “shocking”. The only thing he really said hinted at is before you can get a huge loan, you better have experience managing a smaller one, and before you can get a gigantic loan, you better have experience with a huge loan.
It is not a bubble, but Mark’s story makes it SOUND like a bubble.
I think the problem is that Mark makes it sound like the agriculture on the properties purchased are not profitable ventures, and only the increase in property value makes it profitable. That is what makes this sound like a bubble, but it isn’t.
This incongruity in his story was my complaint, not the debt issues.
He says “farming doesn’t pay”, but doesn’t clearly convey that he is talking about is “traditional farming”, NOT “restoration agriculture”, which is what he is doing. What he is doing, DOES pay, even in year one, and more as the perennial crops are established and even more once you do value adds.
@Jack,
Relax.
I just finished the episode– As you can see I’m a bit behind- and was going to comment what an excellent interview this was.
Regarding my previous comment, don’t take it negatively. However, it does require some degree of management skill and some luck to not end way over your head in debt. But yes, buying the land so you can start producing on it can also leave you poor or too old before you can start doing anything.
@Mike,
I too was thinking of tossing the LLC idea to my accountant. With as many loses as I have had this year, I could use the write-offs.
Yeah, I would DEFINITELY get with your CPA about it.
For us, I think its going to be VERY iffy. The reason being that in Louisiana your property tax is roughly decreased by 1000 a year due to a “homestead exemption” that we’d lose. On top of potential capital gains, etc, etc. So I’m having him really go through the pros and cons, and get the exact real numbers to see if the house is do able. You gotta think you can start to deduct things like replacing gutters or regular home maintenance, or even buying appliances because that is part of the rental companies attempt to improve the property.
And if you didn’t hear it VERY specifically he stated that the businesses deduct their rental payments from the rental company. He also indicates the house (or a portion of it) is rented by the home owners, those are obviously NOT tax deductable. So the areas rented by the company are deductable, but not family.
Everything else in my life (just about) that is getting deducted. The truck, my earth works, tree purchases, everything.
Good luck.