Sheep farm working its way back to sustainability

In January 2005, someone set fire to the barn on Steven and Jodi Ohlsen Read's farm near Nerstrand, Minn., killing 500 sheep. Shepherd's Way, once the largest U.S. sheep dairy and the home of prize-winning cheeses, was in trouble.

Desperation can breed creativity. In this case, it has led to an innovative small-loan program in which ordinary people, many of whom probably love cheese, become investors in the farm.

"As far as I know, it's probably not a common thing," said Read, who sees this as a means of sustaining the farm and enabling it to buy more sheep milk as it pursues longer-range financing.

Briefly, it works like this: Lenders decide how much they want to invest, then choose an annual interest rate of up to 10 percent, for loans with a term of six years. The loans aren't secured, so there is some risk.

That aspect of risk has butted up against the ideals of sustainable agriculture.

"Some potential lenders want to talk, 'How big? How fast? Can you franchise?' and all of a sudden, your value system is on the table," Read said.

And make no mistake: Such devastating loss leads to some soul-searching.

"People came in and said, 'Let us take your problems away. If you use herbicide, you won't have so many weeds. If you use BST, you'll get more milk,'" Read said. "The question is, where is that line for you?"

In some ways, the values-focused nature of the sustainability movement has undercut how people perceive it in the business world.

"The whole sustainable movement has acquired this sort of nonprofit aura," he said. "You go to the farmers market and there might be a collection jar on the table."

Customers want to talk about living off the land, or about artisan craftsmanship.

"So oftentimes, what you're not talking about is financial gain, because that's not the No. 1 goal," Read said. "But the meaning that conveys to the listeners is that you're not interested in profit. We need a new model of sustainable that includes an emphasis on financial sustainability."

Shepherd's Way has been a farm for 14 years and a cheesemaker for 10. It has 250 to 300 sheep, compared with more than 800 before the fire.

As for the small-loan program, "We're raising just enough money to keep us sinking slowly," Read said with a laugh. "But we can't just survive. We have to return to success."