A Decision Tree for Building a Farm

Why Should I Build a Farm?

The economy of the post-pandemic world has changed.

As the world takes on the challenge of economic recovery in the post-COVID-19 world,  displaced workers are looking at digital sales, direct marketing, and, believe-it-or-not, organic farming as niche industries where they can hang their hats anew, and restore the success they had when the world was less socially distant.

The move to online sales is not surprising.  Companies like Amazon are thriving, not only because they deliver anywhere, but also because an ambitious entrepreneur with a laptop can quickly build an online affiliate business that reaches clientele anywhere in the world.  Overhead is low.  Risk is low.  In many cases, inventory is unnecessary.

Organic food sales keep climbing. 

Like digital sales, organic food sales have seen steady growth in recent years.

The graph embedded here, assembled by the US Department of Agriculture’s Economic Research Service, illustrates the upward growth of organic food sales.  This positive trend has continued in recent years, and even accelerated with the arrival of COVID-19 in 2020.  Consumers faced with the triple threats of illness, a strained economy and reduced health care access, seem to be choosing healthier, more natural foods.

Starting a Farm can be Risky and Complicated

Getting started in organic farming is a bit more complicated than opening an online business or promoting affiliate sales.  Startup costs, including land, equipment, and inputs like feed and seed are considerable.  Not only that, but while a good marketing website can be established online within a few weeks, a farmer growing fruit trees may wait several years for the first harvest (and the first paycheck).  Needless to say, the risks involved in starting to farm are much higher than the risks involved in starting a home-based, online business. In fact, many new farmers are using home-based, online businesses to mitigate the cash flow risks of starting a new farm.

On the other hand, the long-term value of building a regenerative organic farm-a farm that produces nutritious food while restoring healthy soil, can reap rewards long after the latest internet platform has landed in the obsolete wasteland of 5″ floppy disks. When you consider the fact that people have been consuming food grown on farms for more than 10,000 years, and you realize that many farms around the country have been maintained for generations, you begin to realize that a sustainable farm-a farm that is both ecologically and economically sound-provides assets that can sustain you and your family before, during, and after pandemics.

If Farming is in Your Blood, Now May be the Best Time to Start

The reality is, becoming successful in farming is hard work.  It is not going to promise you a steady paycheck, financial freedom, or a lifetime of rest and relaxation.   Forget the image of sitting on the porch swing sipping on margaritas.

But if checking fields and feeding livestock in rain or shine, irrigating in muddy boots at 2 am, or keeping a job you hate just to pay the bills while your farm gets going are tasks you can see yourself embracing;  and if offering your community the highest quality local organic food inspires you, the odds are high that there has never been a better time to buy a new farm.

Questions to Consider Before Your Start Your Farm  

In a lot of ways, building a farm is like raising a child.  Each one is different. Every day is an adventure.  A farm won’t come with an instruction manual, and no blogger can tell you everything you need to know in order to succeed.  But perhaps answers to the three questions below can serve as a springboard for ideas that will launch you in the direction of success.

Where to Build?

Where to build your farm really depends on what you are trying to grow,  how you will produce it, and who you are growing for.   If you are willing to invest in sufficient climate control, the technology today literally allows organic growers to produce fruits and vegetables anywhere.   But the economics of running a hydroponic greenhouses with artificial lighting, heating, and cooling are significant, and the most natural organic consumers don’t value food grown indoors.  So you better do some detailed cash flow and market analyses before you start investing.

If you are buying farmland with intentions of living off the land, keep in mind that soil, climate, water availability, and local ordinances can all challenge your ability to produce food.

Does your climate provide enough rainfall throughout the year to ensure production?

If you must rely on surface or well water to irrigate, you better examine the local water laws and learn what rights you will own before you buy.

What kind of soil and environmental conditions will support your crops?  Growing blueberries in the alkaline soils of the Southwestern United States will take some seriously intense soil development.  Climate control requirements will limit your ability to grow olive trees or lemons in North Dakota.  Some crops prefer sandy soils.  Others thrive in heavy soils rich in clay.   Make sure that the environment of the farm you purchase is suited to the kind of crops you plan to grow.

The local business environment may be as important as the local growing environment.  If you are farming near a big city, you may find yourself in a neighborhood that is not very farm-friendly.   Local taxes, air and water quality issues, and various city ordinances may work against your efforts to grow food.

What to Grow?

If you have raised, or are raising children, you must realize the job is harder than it looked before your bouncing balls of joy arrived.    As living beings, each child is unique.  Each child changes daily, and each day brings new challenges.  Expect the same variability with each plant and animal on your farm.

To mitigate the wide variances between individuals, you should begin by raising crop and/or livestock species that you know well and love.   Love?  Really?  Should a business venture be so emotional?  I believe so.   Why?  This job is not easy.  You are not going to succeed if your heart isn’t in it.  You want to be aware of every little nuance of what is happening on the farm. You want your time in the field to fill you with peace.  You want to be so enthusiastic about what you are producing that others who love your crop will gravitate towards you.

Some of the enthusiasts you attract will become your mentors.  Treat them with dignity and respect.  Others will become your customers.  Teach them what to look for in quality farm produce.  Teach them what good food can do for their health and wellness. Then, produce and deliver your best products.

Who will Help?

I’ve heard it said, ‘Behind every successful farmer there is a wife with a good job.'”  This humorous quip highlights an underlying reality:  farming takes teamwork and a reliable cash flow.    While every farmer’s situation will differ, those who begin owning a suitable piece of land,  having capital to invest, partners to help, and good mentors to guide them will grow the fastest.

The challenge will lie in analyzing your own skill-and-resource base, then identifying partners who can complement or expand your skills-and-resources.  Farmers who really understand  good husbandry, but lack business skills, might need a partner who excels in accounting and marketing.   The point is, it will be wise to ensure that you have partners who can contribute any of the capital, sweat-equity, or knowledge that you may be lacking.

What is your Expected Return on Investment (ROI)?

Country-style paintings of farmers sitting on the back porch sipping sweet tea with Grandpa and Grandma belie the fact that a farm is first and foremost a business.  Whether you are raising beef or salad greens, your farm is going to have overhead costs.  You will need tools and equipment, consumable inputs, labor, and one or more paychecks.   If you don’t pay yourself, how long will you survive?  How much do you need to earn in order to cover your costs and put a little money away for future growth and retirement?

As with any business, accurate projections of your yields, anticipated markets, prices, and expenses will help you develop a plan that is as sustainable economically as it is ecologically.  While any business development center can help you with the basics of putting together a financial plan, consulting with experts who understand the ups and downs of agriculture will help you prepare for the unexpected.

 

Leave a Reply