Farming for the Long Term and Having Income Into Retirement

Barbara and Jason Kafka described their conservative methods of earning and saving money for retirement at MOFGA’s 2018 Farmer to Farmer Conference
Barbara and Jason Kafka described their conservative methods of earning and saving money for retirement at MOFGA’s 2018 Farmer to Farmer Conference. English photo

By Jean English

Barbara and Jason Kafka of Checkerberry Farm in Parkman, Maine, and Paul and Sandy Arnold of Pleasant Valley Farm in Argyle, New York, spoke at MOFGA’s 2018 Farmer to Farmer Conference about continuing to farm as they age and having income into retirement.

The Kafkas: Creating a Lifestyle and Avoiding Risk

Jason said the couple originally did not intend to farm but wanted an affordable place where they could raise a family, garden and have an income. By the time they finished college, land prices had escalated in their native Massachusetts, and working just to pay down a 30-year mortgage didn’t make sense to them.

They had heard that land in Maine was affordable. When they found 40 acres with a fixer-upper house and barn, the first bank they went to for a loan turned them down because they weren’t working in Maine – even though they were putting 50 percent down. Then a local bank manager said he would loan on $3,000 less than the price the Kafkas had settled on with the sellers. The sellers and realtor each took a cut, and the Kafkas ended up borrowing $13,000.

Both Kafkas mentioned that they’re risk-averse and like to be debt-free, so they paid off their debts as quickly as possible. When their neighbors decided to sell their land, the Kafkas bought it by cashing out Jason’s 401k (paying a penalty for early withdrawal, but still coming out ahead), putting 30 percent down and paying 7 percent interest to Bangor Savings Bank – versus 50 percent down and 13 percent interest that other institutions wanted for raw land. They paid off the 10-year note in six years.

Barbara said, “Farming is not work; it’s a lifestyle.” She and Jason morphed their farm and fixer-upper to suit their lifestyle, progressing from homesteading to selling at farmers’ markets to – since they were so rural – building their wholesale market. Both had off-farm jobs at first. Jason drove a truck for an oil company until the mortgage was paid and he could farm most of the year and drive only in winter. Driving “was a great way to learn the state of Maine, to meet people and to become part of the community,” he said. “When I’m in farm mode, I don’t go anywhere. I make my runs to Portland twice per week. The variety is nice.” Barbara taught elementary school for 25 years and continued to garden in the summer and cover the flower business of the farm.

The Kafkas had animals early on, including 15 Herefords for 10 years, but raising animals and haying conflicted with growing and selling vegetables, so they cut back to just vegetables and flowers. In the off season Jason cuts saw logs and sells pulp and poplar. He says he is never bored, loves his woodlot and all the wildlife. “I thoroughly enjoy where we are.”

Staying diversified and having upbeat workers – which Jason is good at promoting – has helped with their success. They are flexible and don’t get uptight with their labor, which sometimes includes moms with kids. If workers show up late, they just stay late.

Jason, who likes dealing with equipment, noted that for farmers, expensive toys are depreciable on IRS Schedule F. He enjoys creating and building gadgets, finding and fixing old things, and being able to fix something as soon as it breaks. He makes bed lifters for other farmers.

Various USDA and Maine Department of Agriculture programs helped them develop their farm. “Our pond – Mousehead Lake – was a cost share with the Maine Department of Agriculture for irrigation,” said Jason. “We put geotextile fabric in a section to make a sandy beach.” Other helpful programs and organizations included Maine Farms for the Future, Coastal Enterprises, Inc., and MOFGA. “At first we didn’t fit any of the models [for some funding programs] because we weren’t big dairy or potato farmers,” said Barbara, “but over time that changed.”

Barbara said that a key to a successful lifestyle is knowing that you love it. “So much is personal. We can’t tell anyone the right or wrong way of doing things.” She recommended the book “How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor” by Ernie J. Zelinski.

“Our philosophy,” said Barbara, “is to live lightly on the earth. Make your farm work for you and make it enjoyable.” Jason agreed: “You’ve got to enjoy the ride, because when you get to the end, that’s it. Friends who became ‘professionals’ now tell us we had the right idea. I remind them that I didn’t have a clue!”

“We know farm couples who have gotten divorced,” said Barbara. “If you really like it, you’ve got to work it out for each other. I started gardening when I was 15. Then, when we got to the farm, I would grow too much and would ask Jason for help, and Jason would put a machine to it. Because I was teaching, at one point I had to say, ‘Don’t look at me for labor.’ So Jason hired people and was great about respecting my needs and wishes. You can’t do it all. I see couples working that out or not.” Barbara retired from teaching three years ago and is thrilled to be back on the farm. She now wholesales up to 60 flower bouquets twice a week, “which is work!” she said. “With WERU playing, especially those late evening music shows, it’s pretty fun too.”

Liking things that work and changing things that don’t is important, said Barbara. High tunnels are among the things they like, for control over water and options for workers on rainy or chilly days. They have a little over 10,000 square feet under plastic, including a 26- by 48-foot production greenhouse where they raise seedlings for their own farm, for other farmers, and for their biggest event of the year – the Fedco Tree Sale. They retailed produce for many years at the Common Ground Country Fair.

Barbara continued, “For short-term items, buy cheap; for long-term, buy the best and take care of them.” Jason said that in 1981, their first big purchase was a $120 Garden Way cart. “It’s still working. It’s never spent a night out, and I’ve painted it.”

On the advice of a financial advisor and because they don’t like to take risks, they put money into secure annuities that can’t lose the principal. Barbara has a modest teacher’s pension; they have savings and IRAs (Individual Retirement Accounts); they have their land and will have Social Security. They’ve always bartered, too, which has helped them save.

In April 2018 they put solar panels and a net metering system on their barn, dropping their electric bill to $11 per month. “We should see it break even in eight to 10 years,” said Jason. “That’s an investment that seems to have made sense.”

Jason recalled that the deed to their property transferred it from William Greeley to his son, William Greeley, and then to his grandson, William Greeley – with the stipulation from the first to the second William that the first could live there for the rest of his life and be treated in a decent manner. “Things have changed in our current world, so we need to be prepared and have options,” said Jason.

He cited an old quote: “You can’t call a place your own until you bury your dead there.” His father, who was a Unitarian minister, asked to have his ashes scattered on their farm, as did his mother. Barbara’s mother (a teacher and an escapee from the farming life) wants the same. “It’s nice when your family appreciates that you were true to what you wanted to do,” said Jason. Regarding that connection to the land, “It will be interesting later on to see how it turns out,” said Barbara.

The Arnolds: Prioritizing Good Business Practices

Paul Arnold said, “When people ask me what I’m going to do when I retire, I say I retired 30 years ago. I’m doing what I love to do. As people get to my age, they slow down, and they’re going to slow down more every day.” To get money for that “slowing down time,” a farm has to prioritize making, saving and investing money.

“To us,” said Paul, “profitability from the start meant to pay all our bills, maintain what we have, invest back into the farm, have health insurance, invest maximum IRAs yearly, pay our children’s wages and IRAs, have family time weekly and take family vacations.” They couldn’t meet all of those goals during the first four years on their farm when they were developing its basic infrastructure. After that, however, those goals started to become doable. After purchasing the land in 1988, it took four years for the farm to provide their sole source of income, and every year it was important to spend wisely to make more money so that they could add to the infrastructure yearly, which included a large house they started building in 1991.

Creating a mission statement helped in meeting their goals, said Sandy. One part of that statement was having the time to educate their employees, customers and the community about environmentally sound agriculture. “We have done a lot of presentations. We made mistakes in our early years, and try to help others not make them, so they can be better farmers more quickly.”

Some key factors in reaching their goal of profitable farming included an inexpensive startup; good business management and record keeping; labor and production efficiencies; good soil management; mulching and weed control; pest and disease management; season extension; good postharvest handling and crop storage; and creative marketing.

Sandy said she and Paul had combined savings of about $50,000 when they started farming. They kept some of that invested in the stock market, where it did quite well, “so it didn’t make sense for us to spend it all when we could borrow a lot cheaper through Farm Credit at 3 or 4 percent.” When they were farming only from May to October (the first 18 years), they did short-term borrowing from Farm Credit in the winter. They also used 0 percent credit cards for short-term loans, paying the balance before interest kicked in. That enabled them to build great credit.

“Economize when you’re young,” said Paul. They did buy some tools and equipment that would enable them to do better over the long haul, and they bought 20-year term life insurance for about $200 per year, in case something happened to one of them. But building up the farm was slow in the first 10 years because they had mortgages and young kids, and they were figuring out their systems and markets. “After that, things started to move fast. We had great clientele, and once we got out of the mortgages, we started moving ahead financially.” They have reinvested in green energy to reduce overhead, often using grants, and have increased investments over time.

“We’ve always run our farm as a business [a sole proprietorship], and I think a lot of farms don’t do that,” said Paul. Sandy and the kids have always been employees, which enabled the family to buy health insurance under Sandy’s policy in the early years and use that as a farm deduction. (Insurance rules have since changed.)

They paid their two children starting at age 6 by putting $1,000 per year into their Roth IRA accounts. “If you invested just $800 for three years at ages 6, 7 and 8 and you never gave them anything else,” said Sandy, “that $2,400 investment would be worth over $208,000 when they turned 65 at an 8 percent average return. If you did $800 every year, it would be worth $1 million!” (Ed. note: See, for example,

They meet with their farm accountant each December, who tells them, for tax purposes, whether to pay for seeds (about $5,000 per year), seed potatoes and other items in December or January. “If I spend $10,000 and save 30 percent [on taxes] on that, that’s over $3,000 [saved],” said Sandy. In the early years, they reinvested about $10,000 each year into the farm and kept their taxes low. Now, “we typically are still in a low tax bracket where we pay no more than $5,000 per year, and we have done Roth IRAs rather than traditional every year except the last few. For the first 10 years we couldn’t max out our IRAs, but for the last 20 we’ve been able to. A good farm accountant has been critical to our financial success by guiding us each year.” (Ed. note: For the difference between a Roth and traditional IRA, see

“To determine purchases for improving efficiencies,” said Paul, “we look at payback based on records of what each crop yields and the amount planted. We’re always thinking more about what an investment will cost for the long haul rather than just the cost today. For many people, as their gross goes up, their net follows right along, so they’re not really getting ahead.” He mentioned a farmer who went from 4 to 35 acres, was working a lot harder and was not netting any more money. “It’s important to farm smarter, not harder.”

As an example of investment costs versus benefits, their high tunnels are steel and aluminum with no wood, reducing operating and maintenance costs, and they’ll still be good in 30 years. Each cost over $30,000 to build, but each grosses $30,000 in one year; it’s easy to see their value over time.

When they could afford a new greenhouse for their starts in 2002, they put radiant bench heat instead of air heat in their 30- by 48-foot Rimol polycarbonate greenhouse; from November to May they spend about $2,500 to heat it. The bench heat cost more to install, but it paid back the extra cost in just three years, plus it enabled them to produce much more than their previous, smaller house.

They focused on making their washing station efficient because it’s their highest labor area. Their bubble washer “is phenomenal in getting greens clean and ready for markets quickly. The large tank replaces a triple washing system.” A barrel washer for root crops paid for itself in two weeks. (

Paul adheres to “the law of one-percenters.” For example, he doesn’t stop to buy coffee but makes his own and brings it with him when he leaves the farm. In their early years, they knew they needed irrigation but didn’t have money for it. “We figured we were losing about $10,000 per year by not having good irrigation,” said Paul. “In our fourth year, we figured we could spend up to $15,000, and it would be a good investment. So in August 1991 we dug the pond, and we cash flowed it with the money we were making that year.” They bought the necessary irrigation parts the following April 1 from a company where they had an account, so they didn’t have to pay the bill for 60 days. Then they paid that bill with a credit card, giving them 30 more days to pay it. “By the end of June when the markets were busy, we had made enough money to pay for the irrigation system,” which increased their gross by $30,000 that year.

They originally purchased older vehicles that got only 9 and 14 mpg. “We learned that having a good vehicle pays,” said Sandy. “Now we have two Mercedes-Benz Sprinter vans and they get 24 mpg, they don’t break down, and they hold their value well.”

Likewise, “we don’t hesitate to spend $1,000 on a piece of equipment if we think it’s really going to help with weeding and cut our labor costs,” she added. You can learn a lot by sitting down with a calculator, paper and pen for what purchases can mean to help with profitability.

Paul said that since 2002, when they built the greenhouse, they’ve invested close to $750,000 in equipment, trucks and buildings with 0 percent interest credit cards, “and it’s all owned by us free and clear.”

Regarding labor, Paul said that when he started as a nursery crew leader in the early ‘80s, his boss told him, “When your crew is here, you work with them. When they go home, you get on the tractor. And it’s a ‘come on,’ not a ‘go on.’ ‘Come on out with me and I’ll show you how to work,’ rather than ‘go out there and work.’ You set the tone and the pace.”

Sandy said that some workers are more efficient in the morning, “so we learned that some are best working half days, then Paul and I can do tractor work and other tasks in the afternoon.”

One June – always a crazy month of planting, harvesting and weeding – they lost a crop of carrots due to lack of labor; they calculated that if they had hired one extra person fulltime just for that month, they would not have lost the crop and would have made far more money than the cost of the employee. Paul noted that if you get behind in June, it’s hard to catch up, but if you have weeds under control by the end of June, you can sail through the rest of the year.

Moving to year-round production in 2006 created year-round positive cash flow. They accomplished this by building large high tunnels that produced greens all winter, which added to the storage crop sales. Through simple record keeping, the Arnolds know how much per square foot or acre their crops generate each year. “Most of our crops gross between $30,000 and $60,000 per acre. However, some are much higher, like winter Swiss chard in a high tunnel, which grosses $272,000 per acre!” Learning what crops make money is important; the higher profits mean more money to invest for retirement each year.

Technology has increased their efficiency and prevented disasters. A weather station monitors temperature, humidity, etc.; remote sensors alert them via their phones if water, carbon monoxide, temperature or other factors need attention; and cameras in the washing station enabled them to watch workers’ patterns (e.g., where they walk) so that they could improve efficiency.

Sandy said it’s important to calculate what you’ll need for retirement income and how you will accomplish that goal as early as possible (in your 30s!). “For us, we could sell our development rights, transition to the family or sell the farm outright. Maintaining the farm in good condition has been important to us to keep its value up. One never knows the exact future, but we have tried to invest wisely both in the farm and in investments so that we can live off a combination of investment income, our IRAs, Social Security and the farm.”

The Arnolds recommended a long list of resources to help make farming bring in more money for retirement, including the book “The Lean Farm,” attending conferences, visiting other farms, listening to Chris Blanchard’s Farmer to Farmer podcasts ( and more. “Farming is not always easy, but it can be profitable and will give us a good retirement income as we slow down,” they concluded.


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