As Tobacco Loses Currency, a New Cash Crop Blooms

Source from:  By Thomas Heath Washington Post Staff Writer Sunday, June 29, 2008 06/30/2008

Jamie Raley's family has been farming in St. Mary's County since Abraham Lincoln was president, mostly growing tobacco. But with the drop in U.S. cigarette smoking over the past decade, tobacco no longer pays. So the Raleys cast about for something else that would keep them on the farm. They discovered petunias. And begonias, marigolds and impatiens. The Raleys borrowed $318,000 to build a half-acre, climate-controlled greenhouse that could grow tens of thousands of garden flowers and add a tidy income to bolster Jamie's slim government pension. They are among a growing group of local farmers at the forefront of what could become a revolution in Maryland agriculture. Theirs and 40 other farms in Southern Maryland and the Eastern Shore have created a factory-like network of greenhouses to produce a viable new cash crop for an industry once dependent on tobacco and poultry farming. The Raleys still farm corn and hay and raise a few Angus cattle, but these days the flowers seem to hold the most promise for a regular payday. "Either my wife or myself would have had to get a job off-farm to maintain our standard of living," Raley, 53, said of his colorful new revenue stream. At the center of their new business model is a family nursery operation in eastern Montgomery County with a big contract to supply Home Depot with plants for its stores in the mid-Atlantic. The collaboration with Bell Nursery helps shelter the family farmers from many of the ups and down that typically haunt growers, but it's hardly a sure thing. Farmers have to keep flower spoilage down and watch their costs. And there are other risks. Bell can end the relationship at the end of a season, which would force the grower to find another buyer. Also, Bell's only client is Home Depot. If Bell lost Home Depot, farmers would again have to sell elsewhere. Even with perfect execution, the profits from flowers alone may not generate enough income to keep the family on the farm. But for those who have tried, the income is enough to make farming feasible. Raley last year netted a $15,329 profit from his flowers, but he expects that to soar to $70,000 in two years when he pays off the mortgage on the greenhouse. "The idea is to try to have as many different ways for farms to make money as possible," said Jok Walsh, who as executive director of Caroline County's economic development authority helped promote the business model. Under the concept, farmers build half-acre greenhouses -- known as Bell Houses -- with their own money. Bell sells them seedlings in December, then the farmers mature the flowers in their greenhouses for 10 weeks or so, carefully controlling the temperature and watering the plants. Bell buys back the plants for twice the amount the seedlings cost but does not buy back plants that die. The cycle repeats itself in late spring, when the growers get another wave of seedlings. The season ends in April and then is over until the next year. Gary Mangum, the co-owner of Burtonsville-based Bell Nursery, said each farmer gets a three-year contract to start, and after the third year the deal goes from season to season. "In our nine-year history we haven't walked away from any relationship," Mangum said. "We need the growers as much as they need us. We've invested too much time to replace and retrain." The Bell Houses take their inspiration from the Dutch, who are known worldwide for their expansive climate-controlled centers. Brainstorming with others, Walsh wondered whether instead of building sprawling greenhouses, farmers could band together to create a network of smaller operations, much like the chicken houses that dominate the Eastern Shore. Walsh and others urged Bell Nursery to try the idea and a meeting was scheduled at the library in Denton, near the Maryland-Delaware border. From the 20 farmers who showed up, two agreed to be test cases. The selling point: Flowers could be healthier, cleaner and more profitable than raising chickens. And the farmers would get help. There would be close supervision to help farmers reduce the risk of losing the flowers. In addition, Walsh schmoozed banks, credit companies and finance firms to convince them that the idea wasn't crazy. "The smart, big farmers outright rejected the thing," Walsh said. "The profit margins look so good, everyone was suspicious. In agriculture, you can't make so much and do so well without there being a catch." The Lohmeyer family took the gamble. Their greenhouses in Caroline County on the Eastern Shore, not far from the Delaware border, are a work of art. Farmers come from miles around to view the Lohmeyer operations. The polyethylene roofs, automatic sprinklers and barley-based heating system that keeps the flowers in a crisp, 98-degree environment even on the coldest January day have made the Lohmeyers the poster child for Bell Houses. Profitable, too. The four greenhouses across two acres turn a $175,000 annual profit, which is far more lucrative than the $150 an acre annual subsidy that the federal government pays them not to plant on much of the farm. "We heard about Bell and went to an economic meeting in Denton to see what they were offering," said Charles Lohmeyer, who wasn't making much money raising chickens and growing soybeans and corn. Business was so bad for the farm family that his son, Keith, ran a convenience store down the road. "I gave that up when this become profitable," he said. Bankers laughed at Charles Lohmeyer's proposal to build a greenhouse. But he eventually borrowed $238,000 for the first of his four half-acre greenhouses. To maintain diversification, the family still raises 56,000 chickens in a nearby poultry house. "It's definitely a profitable thing, and we are only working six months a year," Keith Lohmeyer said. "When we are done, I go on vacations. At 81 years old, my father finally got a passport. He and I are going to get in a minivan and head toward New Orleans in July and up to Nova Scotia in September." Enditem