How to Start a Small Farm

May 8, 2023

If you dream of starting a business that will involve your whole family, a small farming business is a great choice. In fact, the majority of small farms are family owned. And small farms are also by far the majority of farm businesses. A whopping 90% of all farms in the US are defined as small farm businesses.

That designation has little to do with the size of the farm. Farm operations are small by acreage but by Gross Cash Farm Income. If that’s below $350,000, the business is a small farm.

Ready to get your hands dirty?

The Current State of Small Farming in The US

Although 90% of all farm businesses are defined as small, their numbers have been in a gradual decline since the 1980s. According to the United States Department of Agriculture statistics, there are about 2 million small farms in the US, with an average size of 450 acres.

But it’s important to know that although their numbers have declined, their output has tripled. That’s because of technological improvements in many aspects of farm work. Small farmers contribute about 20% towards the US agricultural products (crops) output.

Want to know how your state fares? The USDA has information specific to each state and is a great resource to learn the best states to start a farm.

Why Do You Want to Start a Small Farm Business?

Beginning farmers in all types of farm product businesses share certain characteristics. Like other farmers, they enjoy outdoor work. They are self-starters, self-sufficient, and not adverse to working 7 days a week.

Many farmers who start their own businesses grew up in a farm environment, but there are equally as many who did not. Many want a change in lifestyle.

How to Start a Farm: A Step-by-Step Guide

Commercial farming on a large scale produces the bulk of food that hits our tables. The large farms are growing food such as corn and soybeans, as well as farming animals such as chickens, turkeys, and cattle for the food that makes its way to our grocery stores.

The small farms fill a niche, often in local markets and on a small scale. They might be organic farms, or running a produce stand. The small local farms could be raising animals such as alpacas and goats (and even rabbits) that produce fiber when sheared.

On a micro-scale is the hobby farm. Hobby farms focus on a specific niche that is lacking in production from the large farms. For example, dairy farms can have large herds of cattle, or they can provide goat’s milk from a small herd for a local market.

Identify Your Farming Niche and Get Farming Experience

Educating yourself via the written word is important, but nothing will compare with actual hands-on real-world experience. You may join a community-supported agriculture group and team up with mentors to help you gain experience and narrow your choice.

Find Suitable Land for Your Farm

Although the average size farm is 450 acres, many are much smaller. You won’t know how much land you need until you settle on the type of business you want to run.

For example, the USDA has a specific guideline for the amount of space required for certain farm animals – mostly hoofed animals and poultry. In other words, before you choose to raise milk goats you need to determine if you have enough land for their required pasture size. You’ll also have to get certified in food safety courses.

There are niche crops you can grow, such as sunflowers and hops. Or you can choose aquaculture ventures, such as raising crawfish, shrimp, oysters and catfish.

Growing Season

The length of your growing season can greatly impact your production costs. For example, if you live in New England states, you’ll be starting plants indoors and paying to heat that area. The majority of aquaculture ventures take place in southern states.

Market Research

To find your niche, you need to check out the competition. If a local farm stand is well stocked with a wide range of vegetables and fruit, you can plant different crops such as flower farming. There may be some crops you can grow fresh (especially in aquaculture) and sell locally – competing with products that are frozen and shipped through distribution channels.

Make a Farming Business Plan

A farm business plan is extremely important. It can help you navigate through getting financing, and also getting approval from local zoning entities to locate and run your business.

For example, you should seek land that is zoned agricultural, or even commercial, if you need processing facilities. The location of your business is a key part of the business plan.

Decide on a Business Structure

If you’re starting a small farm as a sole proprietorship, you should most likely form a limited liability corporation. An LLC protects your personal assets.

Look into Finance for Your Farming Business, Including The United States Department of Agriculture Grants and Loans

Wondering how to start farming with no money? It’s actually possible. The USDA has direct farm ownership loans that don’t require a down payment. The USDA also has various grants and loans, click the above link for a comprehensive list.

Make an Operational Plan for Your Small Farm Business

When learning how to start a business, you need a plan that works for your specific industry. Research how to make money farming in your niche to develop an operational strategy.

Source Equipment, Seeds, or Livestock if you are Raising Animals

The USDA is also a source of loans for expensive equipment if needed.

Begin Your Successful Farming Operation!

Enjoy the success of your first crops!

Market Your Farm Business

Find a farm app that suits your objectives. There are various software programs for different aspects of the farm business. For example, there are farm apps called Growers Edge and Machinery Guide.

Sell Your Products; Consider Farmers Markets

For selling your products, there are other resources in addition to a farmers market to help you reach your customer base. For example, via social media.

Farming Niches to Consider for a Successful Farm Business

Here are a number of farm ideas to spark your interest:

Potato Farm

Demand is year-round and production costs are low.

Butterfly Farm

Can be done in small spaces.

Chicken Farming

You can compete by raising organically and/or free range.

Egg Farming

Organically or free range.

Quail, Chukar, Pheasant, and Game Bird Farming

Birds can be raised for fine restaurants, or also for sports use on game preserves.

Flower Farm

Can be a welcome addition to typical farm stand fare.

Alligator Farm

An alligator grows a foot a year during the first four years of its life. At that time it is harvested for its meat or hide. Obviously suited for southern climes.

Dairy Farm

Dairy goats fill a specific niche for those who are allergic to cow’s milk.

Strawberry Farm

Seasonal with a very busy period in late spring.

Sunflower Farm

Beautiful and reliable to grow.

Bee Farm

In high demand for honey, and also for travel – as beekeepers tote their hives to locations where they are used as pollinators.

Hay Farm

Learning how to start a hay farm takes expertise. Chemical fertilizers and weed killers used on most crops don’t work with hay farms – the hay is grass. A farmer needs to get complete control of weeds in fields before planting hay – this is usually done by planting corn or soybeans for several years, and spraying those crops to kill weeds.

Other factors for raising good hay are the pH of the soil, and the type of hay needed locally. For example, the majority of hay farmers harvest hay in large round or rectangular bales which much be moved with large equipment. Small horses and other livestock farms still want the small bales.

Deer Farming

Venison (deer family meat) is in high demand and deer are also farmed for their antlers. They are fast to mature but require high fencing and 1,000 square feet per animal.

Crawfish Farm, Shrimp Farm, Oyster Farm, Catfish Farm

These all fall under the category of aquaculture and such farms are prevalent in the southern states, due to the need for a long growing season.

Rabbit Farm

Rabbits procreate at warp speed. A female rabbit, or doe, can be bred again 9 days after she has given birth. The young rabbits reach harvest size (if raised for meat) in 8 weeks. A true niche is the mohair rabbit, raised for its luxurious hair, which is stripped from the rabbit and spun into fiber.

Sod Farming

Grasses are grown with a thriving root mat, cut in rows and rolled up for delivery. Requires expensive equipment to harvest, large flatbed tractor trailers to deliver, and expertise at the delivery site for installation.

Tomato Farm

There is a myriad of types of tomatoes. A niche option here is the “low acid” varieties, which aren’t commonly grown and sold.

How Much Does it Cost to Start a Farm?

As you can guess, the cost of starting a farm varies greatly. Factors include whether or not the land is owned and the type of venture.

Here’s a very important fact – the majority of successful small farms get their beginning with a mix of farm income and “off-farm” income. In other words, beginner farmers may need a regular job to help them get through the first years successfully.

Why Small Farms Can Sometimes Fail

There are a number of reasons why small farms can sometimes fail:

Natural disasters
Expensive machinery breakdowns
Crop disease loss or animal/poultry disease loss – crop insurance can help, and livestock insurance are available from the USDA.
Operating costs higher than estimated

The Bottom Line

The hardest choice may be the type of venture to start. It won’t be easy, but making a living from natural resources and hands-on work on your own farm can be very rewarding.

Image: Envato Elements

This article, “How to Start a Small Farm” was first published on Small Business Trends



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