Wednesday, August 31, 2011

Exploring a Market Farm Business

A market farm is often a food crop and/or animal product business that directly markets its produce/flowers/herbs/eggs/meat/dairy products, etc. to consumers or restaurants.

Many non-farmers enjoy growing and raising plants and animals, but without a solid business approach such ventures will be unsustainable and may be better pursued as a hobby. With that in mind, explore a market farm business through the following steps (these are not necessarily linear and will build on each other) prior to contacting the Extension office. An acre is 43,560 square feet, or roughly the size of a football field without the end zones.

1.  Develop a business plan. A market farm is a small business. The Grow Your Farm course was development for the program to focus on business planning and management. Assumptions and unknowns can plague your thought process as you explore a market farm operation. These include production costs, goal setting, risk management strategies, equipment needed, labor needs, etc. You may not know the questions to ask until you work through a template such as “Building a Sustainable Business” . Most ag lenders will require a business plan prior to any financing.

• If you are interested in farmers markets and ask yourself, “Am I a people person? Can I work with the public in an intensive way necessary to market directly?” Most new market farmers enter through the farmers markets.

• Visit local farms and look at the labor needs and ask yourself, “Am I physically capable of this stoop labor and/or can I afford to hire labor for planting, weeding, and harvest? Or feeding, milking, moving, etc.?”

• If you don’t own land, inquire about leasing private and public land and ask yourself, “Do I want a landlord and can I afford the lease? What terms of a lease are important to me?”

• Think about other ways to earn money and ask yourself, “Why do I want to be a market farmer? And what are my goals for embarking on this business venture? What will my business look like in 5 years?”

• Check out the equipment listed in some of the publications and ask yourself, “Which do I need? Which can I afford? How will I learn how to use this equipment?”

• National statistics show that on average 80% of small farm gross income is absorbed in production and marketing costs, netting a farmer 20% of total. Ask yourself, “Can I afford an annual operating budget of $50,000 - $150,000 (depending on scale)? Will I need financing?”

A market farm is a small business. Ask yourself, “Are you ready to manage employees, maintain equipment, keep records, make decisions based on limited information, file farm taxes, etc.?”

2.  Intern, apprentice or volunteer on local farms. This option (when available) gives you a sense of the hard work involved in market farm operations and may allow you to ask specific questions of local market farmers. It will help you learn the differences between gardening/raising livestock on a small scale and farming on a larger scale.

3.  Water. For a successful farming operation most producers must receive between 25-36 inches of rain fall. If at the right times this will provide not only good crop/plant growth but also replenish the soil moisture and restore water stored in ponds or lakes. Since rain doesn’t always come when the crops need it most, many people use surface reservoirs or ponds to store water for irrigation. If you are irrigating from a pond the amount of water is generally listed as acre feet of water storage. A foot of water in one acre of surface area of a pond is approximately 325,850 gallons or “acre/ft” of water. If you are using a pond for irrigation it is recommended that your drainage area (watershed) for the pond be a minimum of 10 acres of drainage for every acre of surface area. (Example – for a 3 acre lake you should have a minimum of 30 acres of drainage area going into the lake). This should provide adequate recharge of water into the lake. For irrigation you need to make sure you consider the cost of pump and piping equipment, the cost of building the pond (or digging a well) and the labor cost necessary for setting up and operating the irrigation equipment. If irrigating, you also may want to have the water tested for saline content and see if that will affect short term plant growth or long term soil health. If selling vegetables, you may need to get the water tested for bacteria or parasites to insure that you are providing a safe healthy product for customers. If you are concerned that you may not get enough rainfall in your area you can check this out by going to this website, to get daily rainfall events in all 50 states. If you are using a deep well you can check with the recharge and depth to water in over 100 monitoring wells statewide by visiting this website. Water is vital to most farming operations, whether for crops or livestock. Making sure you have enough available water is one key to a successful farm business.

4.  Read, read, read!!! There are many good publications that will help you to better understand the complexity of market farm operations, production and marketing related expenses, and production and marketing strategies. Many are listed on (and include) the Growing for Market website (“Market Farming Success”, “The Hoophouse Handbook”, “The New Organic Grower, “Four Season Harvest”, etc.) and other websites:

5.  Try selling your produce. Some farmers’ markets have provisions for new farmers and small operations to sell produce at the market. See if you enjoy it and note the volume of produce necessary to reach your business goals.  Start small and grow as your market grows.  To find a farmers' market near you try this website.

6. Attend workshops and conferences. Extension and other groups provide local, regional, and national market farming workshops and conferences for continuing education and networking. These are advertised on state and national listservs.

• Beginning Farmer programs such as the MO Beginning Farmers Program
• Local and regional workshops and conferences are listed in the Ag Opportunities e-newsletter.
State listservs are also available - SARA, SUSTAIN-AG, MOA and more.
• National conferences are often advertised (also with discussion) on SANET

7.  Lifestyle changes. Many new farm operations are challenged to make a profit for the first year or more. Long days in all weather conditions and weekends at farmers’ markets are physically challenging and require adjustments to other work, family and personal schedules. Will you work part time while you begin a farming operation? Are you physically ready for the work? Are your family and friends flexible with your availability? How will you adjust to these changes?

(written by Adrian Card, Boulder County Extension, University of Colorado adapted for Missouri)

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