Courtesy of beginningfarmers.org, I learned of this project from Michigan State University on assessing common factors of success among Michigan’s Upper Peninsula beginning farmers. The project interviewed eight beginning farmers and two supporting organizations to ask about, among other things, the challenges and opportunities for beginning farmers.* What I found most interesting about the study were the responses from the two supporting organizations regarding:
- the most important factors of success among newer farmers; and
- the most common pitfalls newer farmer should try to avoid.
What struck me was the same themes in the answers to both questions. Researching the market. Persistence. Organization/recordkeeping. Calculated risk-taking.
With the possible exception of one of the above (persistence), the other themes are skills that can be learned by beginning farmers. But how does a beginning farmer research the market, keep records, and decide when to take a risk with the operation?
Researching the market:
There is no one-size-fits-all answer to how to research the market because each market is different. Do you want to establish an organic vegetable direct-marketing operation? Or enter the feeder cattle market? Maybe you want to establish a CSA? Or perhaps row crops such as corn, soybeans, and wheat? The possibilities truly are endless but that means different research is required for each possibility.
You must know the type of operation you want to run. That requires making a business plan, even if it is a rudimentary one. Research the cost of inputs (e.g. seed, fertilizer, livestock). Research historical trends of input costs, productivity of the land, selling price. Understand the possible federal, state, and local rules and regulations. Talk with local producers about their operation and practices. Determine how you will obtain access to land and how much land your operation requires. With this research, you can determine how prepared you are to launch your operation but also, set the foundation to be persistent and become a successful farmer.
We’ve discussed recordkeeping before but it bears repeating: without knowing the cost of your inputs, the cost of your time, and your break-even point, you will not be able to properly manage your operation.
This is the scariest proposition. When do you look to expand your operation or change enterprises? Are there value-added enterprises you may add to the operation? Do you continue to rent or purchase land? Do you have the resources and labor expand both your production and distribution capacity? Can you live off the farm income alone or do you require an off-farm source of income?
To make those decisions, you have to return to research and recordkeeping. Research and recordkeeping is critical to responsibly running your operation and knowing when it is possible to expand, when to consider changing enterprises, knowing whether production and distribution capacity are at their maximum, and knowing whether you are making a profit.
Want some help navigating the landscape? Feel free to contact us because we’re here to help Nebraska and South Dakota’s beginning farmers and ranchers!
*The caveat to the study is that this is a small qualitative study focused on a small geographic region. However, the study authors do you claim to extend their results beyond what the results state. I am the person suggesting that the answers by the supporting organizations provide food for thought to all beginning farmers.