Beginning a Farm: Where to Start
We recently interviewed Allison Beichner, loan officer with AgChoice Farm Credit. Allison shared advice for beginning farmers and how to get started. Listen to the full podcast episode with Allison here.
You've been involved in agriculture your entire life and now you serve in a role as loan officer where you help many beginning farmers get started. What excites you the most about the future of agriculture?
In a time where our agricultural markets can be so volatile, sometimes it's tough to find the silver lining and figure out, what's the positive direction agriculture is going?
I have been involved in agriculture most of my life and was involved with 4-H when I was younger. I grew up on a part-time farm. My dad was an electrical engineer, which gave me a bit of a different perspective because he always enjoyed the technology aspect. Then I married an Ag and Biological Engineering major! My husband worked for Case IH for about six years before we returned back to our home farm here in northwestern Pennsylvania. On our farm, we're not quite as technologically advanced probably as my husband would like, but his opportunities at Case IH give him a unique background.
One thing I think we're going to see is more people with an interest in agriculture that haven't necessarily been interested before. We’ve already seen more people interested in part-time farming, and they are curious about new technologies and how they can use them on their farms.
I also think we're going to see a lot more people that leave the family farm, spend time working in industry and gaining knowledge, and then coming coming back to implement those changes on their home farms, just as my husband and I did.
Starting a farm can be daunting. What advice do you have for beginning farmers to get on the right path for future success?
First and foremost, I recommend the beginning farmer gets connected to others. In some cases, the beginning farmer may be part of a family operation already, so they already have a network. Even so, I encourage all beginning farmers to find a mentor. It doesn’t need to be anything formal. Just a relationship with someone else, perhaps another farmer in their area, for the beginning farmer to learn from and bounce ideas off of. I know when we returned home, my husband had been disconnected from the agriculture community in our area for quite some time, but one of our local larger farmers connected with my husband and the two of them have hit it off. They go to a lot of different conferences together, and he is a bit of a mentor to my husband. We enjoy learning from him, and he enjoys teaching us.
If the beginning farmer doesn’t have farming experience, getting experience is also critical. In addition to learning the ins-and-outs of how to grow crops or raise animals, get experience with the business side of farming too. Start with a single enterprise – learn how to plan and use resources and assess the outcomes. This is critical as you start your farming career. A lot of people dive right into it without drilling down and seeing how the outcome is going to affect them.
Next, I tell beginning farmers to save money. Farming is a cyclical industry with upfront financial needs each year to get a crop planted or animals purchased. Learning the discipline of saving for a specific future goal, such as renting your first piece of ground, is good training for the seasonality of farming cash flow. For lenders, proving that you can pull together adequate capital is a key step in instilling trust that you will be able to adjust your lifestyle to accommodate the demands of agriculture and ultimately repay any funds you borrow.
It's interesting that we bring up this point today. I had the same conversation with a part-time farmer yesterday, who presented a business plan to me. We sat down and discussed his goal to transition from being a part-time farmer to a full-time farmer and the goals he needed to meet. Sometimes you just have to dip your toe in the water and not jump in head first. Still, the whole time you're dipping your toe in, put together your plan so that you can eventually jump in.
Finally, the beginning farmer should outline a business plan. A business plan demonstrates that you know what you’re getting into, including understanding the time, budget and resources you’ll need. For beginning farmers, simply outlining the business plan is a good place to start, with the expectation that you’ll fill in any blanks as you learn more. As part of your business plan, develop a cash flow budget, showing anticipated income and expenses.
A business plan with a cash flow budget will help others, including lenders and your family, feel confident in supporting you.
Are there any other thoughts you would like to share with our listeners on this topic?
One program that I encourage beginning farmers to consider is AgBiz Masters. AgBiz Masters is a learning series for young and beginning farmers that covers business and financial management topics. Registration is currently open for the program that will be held this winter and will include online modules and live webinars. You can learn more and register at AgBizMasters.com.
In addition to the AgBiz Masters, we have other programs at AgChoice that can be helpful to beginning farmers including our accounting, records and tax services and business consulting services. Many beginning farmers may need help improving their recordkeeping skills or putting together a business plan, and we have staff that can assist them to do just that. AgChoice has special loan programs for young, beginning and small farmers as well.
Other programs or organizations that help beginning farmers include:
- Penn State Extension: Provides education and guidance in many areas of agriculture
- Farm Service Agency (FSA): Provides loans or security for loans to beginning farmers
- Small Business Development Centers: Provides free legal help when businesses are starting up, including determining what entity structure is best
- Other agriculture organizations: Many agriculture cooperatives or other organizations offer programs for beginning farmers. Here in Pennsylvania, Pasa Sustainable Agriculture provides education, mentorship and apprenticeship programs to gain additional knowledge.
All of these programs can be vital tools in the toolbox for a young and beginning small farmer, but I think it's really up to you to determine which one's going to best fit your situation.
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