Starting a New Farm Enterprise
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Here’s the question of the day, a letter I received from Ivan Toby A. Farmer (get it?).
I have some land and would like to start farming. Please help.
For any enterprise you are considering, I think you have to try to answer six questions:
1. Can it be grown here?
There are a wide variety of crops that can be grown successfully in NC, including many grains, vegetables/herbs, medicinal herbs, Christmas trees, blueberries, blackberries, strawberries, peaches, grapes, apples, pecans, mushrooms, flowers, forestry, nursery stock and more. For almost any viable crop, N.C. Cooperative Extension has a production guide that will provide information on recommended varieties, fertility requirements, pest management and more. You should be able to find specifics at the links above or simply by typing [name of crop] plus “NCSU” into any search engine. Of course, if you prefer you can contact me and I can send you a link or even print and mail it. For almost any enterprise, there is a statewide growers association that has an annual conference each winter, and you would be wise to attend to learn from experts as well as make connections with other growers. If you hear of “new” crops, please keep in mind that production and marketing could involve substantially greater risk.
2. How much will it cost to plant the crop and buy necessary equipment, facilities, infrastructure, etc.?
The establishment costs and equipment needs will vary greatly depending on the crop. Also, don’t forget that almost any enterprise will require access to an ample water supply. To help you plan, look for an Enterprise Budget for the crop in question which will provide detailed estimates. Enterprise Budgets are available from many of the public, land-grant universities, including NCSU. University of Tennessee has provided a list to many of them.
3. Where will I get the money?
Do you plan to tap into savings? Borrow from a bank? If the enterprise fails, will you be able to recover financially? Farm enterprises may be vulnerable to additional risks compared to other enterprises, such as unfavorable weather and pest issues.
4. Can I sell it?
This may be the hardest question to answer, but I would advise you to research this question thoroughly. I recommend interviewing several potential buyers, whether that is grocery stores, restaurants, wholesale buyers, processors, etc. Ask them about price, packaging, quality requirements, quantities needed, etc. If you are considering “direct-to-consumer” sales, then find out about local farmers market and roadside stands (visit NC Farm Fresh as a start).
5. Can I make a reasonable profit?
The enterprise budgets mentioned in item 2 can help you answer this. Don’t forget to account for all the costs from planting to market, including labor, transportation, advertising, etc. Just because you can grow and sell it does not guarantee a profit. If supply of the product from existing growers has pushed the market price to a point where you can’t make a profit, then you would be wise to consider a different enterprise. The best way to evaluate the profit potential of a particular enterprise is to create a business plan. The AgPlan website offers a template you can use to create one on-line.
6. Are there agencies and organizations that can help me?
Yes! Here are a few:
- N.C. Cooperative Extension – That’s me! Your local Extension office offers advice on crop production, pest management, marketing and more. We also offer conferences, workshops and seminars on a variety of farm-related topics. My office numbers are 252-438-8188 (Vance) or 252-257-3640 (Warren).
- USDA Natural Resources Conservation Service – Technical and financial assistance (cost-share) on certain practices that conserve natural resources. Local number is 252-438-3134 (Vance) or 252-257-3836 (Warren). Recently they have offered grants to put up high tunnels (i.e. unheated greenhouses) for vegetable production.
- Soil and Water Conservation District – Technical and financial assistance (cost-share) on practices that protect soil and water resources. Local number is 252-438-5727 (Vance) or 252-257-3836 (Warren)
- NC Forest Service – Technical and financial assistance (cost-share) for forest management practices. Local number is 252-438-7249 (Vance) or 252-257-5960 (Warren).
- Carolina Farm Stewardship Association – A private non-profit that offers technical assistance and educational programs, primarily for small farmers. Their farm tours and annual conference are fabulous.
- Black Family Land Trust – A private non-profit “dedicated to the preservation and protection of African-American and other historically underserved landowners assets.” Education and technical advice on how to preserve family land and keep it productive.
- RAFI-USA – Competitive grants for innovative farm projects. Their website also contains lots of helpful information on options for financing an agricultural enterprise.
- Kerr Tar Council of Governments – Revolving loan fund for existing businesses and new entrepreneurs.
- USDA Sustainable Agriculture Research & Education Program – Competitive grants for innovative farmers.
- The Conservation Fund – A private non-profit that, through their Natural Capital Investment Fund, “finances and advises small to mid-sized enterprises…that create lasting jobs and community wealth, while using natural resources responsibly.”
- The Rural Center – A private non-profit that offers micro-enterprise loans to small businesses, among many other programs.
- Growers Associations – For many if not most commodities, there is an association of growers. They generally have programs to promote the respective products and provide support and information to their members. Many of them have an annual conference. Here is a list of growers associations in North Carolina.
BONUS QUESTION: Where can I learn more?
- NC Farm School – This multi-session course takes you through the process of creating a detailed business plan for your agricultural enterprise. Includes several field days with visits to working farms. Offered by N.C. Cooperative Extension, contact your local Extension Agent for schedule, application, etc. (to be offered next in 2017).
- Local community college – Vance Granville Community College has a Small Business Center that can assist with business planning, as well as an Ag Entrepreneurship class. For more information, call 252-738-3276.
Read another letter from Ivan on his quest to farm.