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Considering a small family business startup and curious about how to start a farm? You’re in the right spot! Most small farms are family-owned, dominating the agricultural scene. In fact, a staggering 90% of all US farms fall under the small farm business category.

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? If the answer is yes, start exploring our comprehensive guide that will help make your small farm dreams a reality.

The Current State of Small Farming in The US

Although 90% of all farm businesses are defined as small, their numbers have gradually declined 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 seven days a week.

Many farmers who started 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

Large-scale commercial farms produce 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.

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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 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 choices.

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 start plants indoors and pay 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 frozen and shipped products 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 zoned agricultural or commercial land 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.

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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.

Comparing Farming Scales: Large vs. Small vs. Hobby

Navigating the world of farming can be intricate, with each scale offering its unique set of considerations and opportunities. This table provides a snapshot comparison of large-scale commercial farms, smaller local ventures, and niche hobby farms to guide potential farmers in their journey.

Step Large-Scale Farm Small Local Farm Hobby Farm
Identify Your Farming Niche Focus on bulk food: corn, soybeans, chicken, turkey, cattle Produce stands, organic farms, alpacas, goats, rabbits Specific niche such as dairy farming, either cattle or local goat milk production
Land Requirements Average size is 450 acres; high land requirement Size varies; must meet USDA guidelines for animal pasture Smaller plots, often specialized
Growing Season Continuous large-scale production; year-round with varying crops Seasonal based on local climate Often specialized seasons based on niche crop or animal
Market Research National or international distribution channels Local markets, community supported agriculture Highly specific markets, often local or specialty e-commerce platforms
Business Plan Comprehensive with multiple operational aspects Focus on local zoning, land use, community engagement Primarily for personal use, but may have small-scale sales channels
Business Structure Large corporations, partnerships Sole proprietorships, LLCs Typically sole proprietorship, possible LLC
Financing Options Multiple financing channels, including big banks USDA grants and loans, community lending Personal financing, possibly USDA loans
Operational Plan Extensive with multiple departments and stages More streamlined, focused on local conditions Personalized, mainly driven by personal preference and local conditions
Sourcing Equipment and Livestock Large machinery, bulk seeds, extensive livestock Specialized equipment, select seeds, smaller livestock Very specific equipment based on hobby, smaller livestock numbers
Marketing National campaigns, supermarket deals, and distribution partnerships Local farm stands, community markets Word-of-mouth, local community groups, and specialized online platforms
Selling Products Supermarkets, national chains, international exports Farmers markets, local stores, community-supported models Direct to consumer, local community sales, online platforms for specialty products

Farming Niches to Consider for a Successful Farm Business

how to start a farm - young farmer on farmland

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

how to start a farm - free range egg farm

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.

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Bee Farm

how to start a farm - farmers harvesting honey on their 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

how to start a farm - pic of a field with shrimp farms

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

how to start a farm - man picking tomatoes on his 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?

How to start a farm - Cost to start a farm, person calculating costs and using a PC

Venturing into the world of farming can be both exciting and daunting, especially when considering the financial implications. The costs associated with starting a farm can vary significantly based on a number of factors. Here’s a breakdown:

  • Land Acquisition:
    • Buying Land: If you’re starting from scratch and purchasing land, this will be your most significant cost. Prices per acre can vary dramatically based on location, accessibility, and fertility.
    • Renting or Leasing: An alternative to buying is renting or leasing farmland. This can be more cost-effective in the short term but does not provide the long-term security of land ownership.
  • Equipment and Machinery:
    • Depending on the type of farming you’re interested in, you may need tractors, plows, seeders, irrigation systems, and more. Second-hand equipment can sometimes be a more affordable option for beginners.
  • Seeds and Livestock:
    • Whether you’re growing crops or raising animals, there’s an initial investment in seeds or livestock. Organic seeds can be pricier than non-organic, and the breed or type of livestock can also influence costs.
  • Infrastructure:
    • Think barns, fences, storage facilities, and possibly a storefront or roadside stand. These structures can be significant expenses, especially if they need to be built from scratch.
  • Operational Costs:
    • Utilities, insurance, licenses, and labor (if you’re hiring help) all contribute to the recurring expenses of running a farm.
  • Marketing and Distribution:
    • If you’re planning to sell your produce or products, you may need to invest in marketing, transportation, and distribution channels to get your products to consumers.

It’s crucial to recognize the value of diversified income streams. The majority of successful small farms often rely on a mix of farm income and “off-farm” income. For many beginner farmers, maintaining a regular job can be a strategic move, providing additional financial support during the initial stages of their farming venture. This can help mitigate risks and ensure stability as the farm grows and becomes more established.

Why Small Farms Can Sometimes Fail

how to start a farm - A young farmer repairing farmer equipment

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

how to start a farm - family working on their farm

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


More in: Farming Business, How to Start




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