From Dreaming to Doing: 5 Tips for Beginning Farmers
The number of young farmers is growing. These tips can help new farm businesses successfully navigate the startup stage.
Newly released data from the 2017 U.S. Census of Agriculture show an increase, for the second census in a row, in the number of farmers under the age of 35. A 2017 National Young Farmers Coalition survey found that a majority of young farmers are college educated, and many are first-generation farmers. Census data reveal that beginning farmers, with 10 or fewer years of farming experience, made up 27% of all U.S. producers in 2017.
What advice would you give to this growing group of well-educated yet relatively inexperienced women and men looking to forge their own pathways into farming? Here are my top five considerations for beginning farmers. This list draws from well-established business best practices, plus my own successes and failures working to build a small farm business, as well as personal observations from working with dozens of first-generation farmers.
This list is also backed up by my own personal experience launching a small farm business, quickly failing, slowly recovering, and ultimately trying again with a very different approach. I wish someone had pounded these ideas into my head the first time around, and forced me to think through (and write down) answers to all the hard questions before I got too far along. While these tips are critical for beginners, they may also be good reminders for more experienced agricultural entrepreneurs.
- Get clear on your goals and abilities.Why do you want to farm? Are there other ways that you could achieve your goals with less risk or less effort?
If you aspire to work outdoors with plants, animals or machinery, why not get a job with an existing agricultural business? If you dream about the self-sufficiency of growing your own food and pursuing a rural lifestyle, perhaps approaching farming as hobby would be appropriate.
Can you identify a burning consumer need that your farm business is uniquely suited to fulfill? Congratulations, now you’re thinking like an entrepreneur! As you develop your big idea, take time to create and practice an “elevator pitch” so you can explain your farm business concept in less than 60 seconds to someone who knows next to nothing about agriculture.
Before you dive into farming, reflect on what competencies you are lacking, and on how you will address those deficiencies. Working for a successful farm operation (or several) can be a wonderful way to build skills and experience, and give you a head start in your own business development.
- Develop a business model. Once you have developed a big idea, you need to analyze it from all possible angles. If you will be selling any agricultural products at all — even if you plan to start at a small scale — you need to consider and plan for all the various functions of a business. The three primary functions you need to address are operations, marketing, and finance. Writing down your plan for each of these areas will help you to think critically and identify weaknesses.
A farm operations plan should describe your production system, including all inputs, outputs, and processes for transforming inputs into outputs. Identify your primary input suppliers, to demonstrate that a supply chain exists to support your production system. Consider transportation and storage needs. Educate yourself about local, state, and federal regulations that may affect your business, and discuss what steps you will take to comply.
A marketing plan describes your target market and their critical need that your business is uniquely positioned to meet. This section should explain how you will approach the 4 P’s of marketing — product design, placement, pricing, and promotion — to reach your specific target market. This applies regardless of whether you are selling your product to the end consumer, or to a wholesaler or other intermediary buyer.
A financial plan should answer the following questions: What is the projected scale of your business in 3, 5 or 10 years? Will the business be profitable at that scale? How long will it take make a profit, and how will you fund the startup phase? How much will you, the owner, take out of the business to support your cost of living?
- Keep business and personal finances separate.Before you spend a penny on the farm business, open a new checking account for all of your farm transactions. To open a business checking account, you will first need to visit the county clerk’s office and file a DBA form to register your business name. Having separate personal and business checking accounts will make it easier to distinguish between farm and non-farm expenses, which is critical for accurate record keeping.
- Dream big, but also manage risk and plan for failure.Farming is an incredibly risky venture, and it takes a colossal investment of time and money to get started. Minimize your financial risk as much as possible by financing the business from savings or business earnings, rather than debt. Grow slowly. Live frugally. Be prepared to keep an off-farm job for years until the business is large enough and stable enough to support you.
Consider starting your business on rented land. Renting is almost always cheaper and less risky than buying. Plus, you can gain experience to know exactly what you will need if you decide to buy land in the future. Develop a sound lease agreement to protect your access to rented land and any investments you make in a rented property.
Have an exit plan from the very beginning. What happens if the business doesn’t work out, or if you decide to downgrade it to hobby status? What happens if you have an unexpected medical emergency? How quickly can you liquidate your farm business assets, and how much are they worth? Having a plan for your worst case scenario can help to take some of the pressure off, and reduce the stresses of navigating the startup stage.
- Relationships are key. Connect with other farmers, extension agents, and agricultural service providers in your community. Building relationships with other producers, especially older generations, can be incredibly valuable and satisfying for all parties.
Ask lots of questions, not just about production, but especially about finances. Be generous in supporting other farm businesses in your community. Establishing strong ties with the agricultural community will give you access to resources for support and information. A solid social network can help you make better decisions and grow your farm business faster.
Source for more info:
If farming sounds like the right direction for you, check out the many resources on the Cornell Small Farms Program website. Their website offers a variety of technical resourceson topics ranging from establishing your production system, to navigating regulations, to farm business planning.
The National Young Farmers Coalition educates and advocates for young and aspiring farmers and ranchers. For a review of challenges facing young people in agriculture today, and policy recommendations to address those challenges, check out the 2017 NYFC publication “Building a Future with Farmers II: Results and Recommendations from the National Young Farmer Survey.” This report identifies land access as the number one obstacle that young farmers face. In response, NYFC offers resources, trainings, and decision-making tools to help young farmers and ranchers secure access to productive farmland.
A version of this article was originally published on the South Central NY Dairy and Field Crops Team blog and in the team’s April 2019 Dairy Digest newsletter.