How to grow the farm w/o debt

[Curtis B]

Has anyone grown their farm with out debt? Right now I overloaded with orders, and my 20 acres can't handle the demand in any way. Word of mouth has gotten out, and I have so many people wanting meat, eggs, and veggies than I have actually considered taking out a loan. I don't want to take out a loan to grow, but looking at the cost of land and the economy, I don't see how I can do it with out. I am talking to some people about renting out pasture until I can afford to expand without going into debt, but even with that I still have to increase the amount of stock, and it is very high right now as most know, not to mention relying on them to maintain their land that fits with my customers wants. I also have bad thoughts about shelling out the money to decrease my time with water lines and cross fencing, shelters etc when I can't take it with me, and will not increase the value of my current property. We are trying to pay off all debt so that we can free up cash flow, but it is hard to save and pay off debt at the same time. Oh, and if there is anyone that raises free range chickens in SC Kansas I may have customers for you since I have maxed out the legal amount I can sell in a year, and I can't find a USDA butcher within an hour away that doesn't charge $7 a bird.

[Txrider]

Originally Posted by Curtis B

Has anyone grown their farm with out debt? Right now I overloaded with orders, and my 20 acres can't handle the demand in any way. Word of mouth has gotten out, and I have so many people wanting meat, eggs, and veggies than I have actually considered taking out a loan. I don't want to take out a loan to grow, but looking at the cost of land and the economy, I don't see how I can do it with out. I am talking to some people about renting out pasture until I can afford to expand without going into debt, but even with that I still have to increase the amount of stock, and it is very high right now as most know, not to mention relying on them to maintain their land that fits with my customers wants. I also have bad thoughts about shelling out the money to decrease my time with water lines and cross fencing, shelters etc when I can't take it with me, and will not increase the value of my current property. We are trying to pay off all debt so that we can free up cash flow, but it is hard to save and pay off debt at the same time. Oh, and if there is anyone that raises free range chickens in SC Kansas I may have customers for you since I have maxed out the legal amount I can sell in a year, and I can't find a USDA butcher within an hour away that doesn't charge $7 a bird.

Sounds to me like you might need to raise your prices until the demand equals the supply, and use the extra money to lease a place and buy stock as you can afford, and if you fill the new place and have demand enough to sell it all too use your profits to buy a piece of land...

Or not, a lot of folks never buy land, only lease it.

A loan, financing, is quick.. Doing it without debt is slow and takes time...

[lonelyfarmgirl]

We are kind of in the same situation, and have not yet come up with a solution that I am happy with. We have raised prices to the point I think is pushing it, and I am very careful to do NO advertising, except a few places online and one local free publication. If I did push it, I am afraid we would be in trouble.
It's a shame when you realize sometimes success isn't the greatest thing, even though it really is.

[Curtis B]

We have/are raised/raising prices. My other reason for not wanting to lease land is having to travel to check/care for the animals. Where I am looking now is at family members land, but they are often unreliable, don't have the proper fencing, and don't have the money to put it up. I have thought about offering to pay for fencing in lue of renting their land, to a point, and then renting. My hands are full making my current property more "user friendly" (without wasting too much money), to cut my time, so an hour or two driving from place to place isn't too feasable.

lonelyfarmgirl, we don't advertise at all yet and DW was going to put together a websight, but I also am afraid to have to turn more people away.

[MO_cows]

If you have maxed out your own production ability, is there some way to "franchise" out? Hook up with other producers who meet your standards and send the excess business to them for a percentage?? It meets the customers needs, it garners more income for you, without the risk of borrowing money to expand your own operation.

[Txrider]

ROFL, I'm more interested in what all you grow and raise and sell and how you got the word of mouth out... You have a problem I would like to have one day..

[Curtis B]

MO_cows, I have thought about that, and even thought of starting some sort of CSA. What I have ran into so far from people I have discussed it with is that soooooo many/all are unreliable. I have issues with being overly honest, and the thought of telling someone that the product they are getting is raised a particular way, and not being able to guarentee it not something I take lightly. I have even brought up to some people about coming out to butcher their own chickens to make that part legal, but most city folks are squeemish.

Txrider, FWIW I raise cattle, pigs, chickens, turkeys, sheep and goats. I couldn't tell you why we have this "problem", but it all started with two different people that were randomly talking to at different times, and they told others, they then had friends over for dinner who tasted the meat, all have at one point visited the farm after that, and that is all I know. I like to think it's because they like us, but I'm betting I am wrong.

[goatlady]

You are under NO obligation to fill everybody's orders/desires. You have a solid customer base and you are handling it right now, so learn to say no to new customers if you cannot fullfill their orders, just do not take the orders! You can only do so much and stay true to YOUR principals. Nobody is going to die if you say no to providing them with your product and if they get upset it is THEIR problem, not yours. You are NOT everybody's momma and poppa.

[littlejoe]

There is nothing wrong with debt, as long as you are making it WORK FOR YOU! Everything you do is a gamble, whether renting, leasing, or owning. Research your ideas to your utmost to cut down your risk, and look at long term also.

As far as leasing goes, you can write anything into it you choose, provided it is agreeable to both parties... improvements to be made should be stipulated at the beginning of the contract, and done by ?

Any improvements should cheapen your lease rate, over none. There are many, many options open to you, and a very broad canvas to paint on.

THe main thing is... Is the risk commensurate with the reward?

[lonelyfarmgirl]

We raise beef, no soy pork, eggs, and rabbit. just adding no soy chicken. We got started with the farm to school program. We only had 6 retail customers the first year. only 6! after that it took off. Sometimes, especially in the worst winter months we might only have a few customers the whole month.
This past week, I sold 35 dozen eggs, 16 rabbits, over 1000 dollars worth of pork and several hundred in beef. It really depends on the month.
I havent had an egg customer in days! Its totally random, and mostly word of mouth. I had a new customer today. She got my name from a friend who got it off our local farm atlas website.

[Maura]

Can you get a deposit from those wanted meat? I just put down a $50 deposit to a new CSA nearby to get half a hog. I also slapped down $275 for this summer's vegetables from the same place. You don't have to ask for an advance/deposit on everything, but certainly for the meat.

[Callieslamb]

Originally Posted by goatlady

You are under NO obligation to fill everybody's orders/desires. You have a solid customer base and you are handling it right now, so learn to say no to new customers if you cannot fullfill their orders, just do not take the orders! You can only do so much and stay true to YOUR principals. Nobody is going to die if you say no to providing them with your product and if they get upset it is THEIR problem, not yours. You are NOT everybody's momma and poppa.

Take what orders you can and put the other people on a waiting list. Raise your prices so the waiting list filters out those not seriously interested. Then slowly build. I am all for no debt. What good does it do you to raise more so you can make a land payment? Is that really getting ahead? No debt is our commitment though. One of the things that debt allows you is to try to do too much too soon - so you end up with more work than you can support physically. What happens to the debt if the customer base disappears? I'd rather have a few dependable customers and add what I could as I could than expand and find out they aren't committed - after you have committed my finances.

[Sawmill Jim]

Same thing growing lots of businesses . On a plus side they aren't making anymore land . Thing i always ask is if things don't work as planed can i sell at a profit or at least get all my money back . Here land is renting for 100.00 to 125.00 per acre on ten acres if you could find it it would be cheaper to rent but with no fences or barns not to good .

At my age i just need a good shade tree wife says no more debt

[lonelyfarmgirl]

Must be nice! Land rent here is 180-300 per acre.
we just started a meat CSA. hope it helps get business under control.

[Sawmill Jim]

Originally Posted by lonelyfarmgirl

Must be nice! Land rent here is 180-300 per acre.
we just started a meat CSA. hope it helps get business under control.

We got bad land

My neighbor rented land on one side of my small acrage and he lived on the other side. I allowed him to run his critters from the barn on his home place, across my land to the land he rented. When he sold out and moved he took the electric fence he erected around the rental land with him. Why don't you rent land with a contract that allows you to take improvements with you when the agreement ends. That way you can increase production and profits without borrowing and take any improvements with you when it ends.

Congrats on working toward the goal of no debt. I have been debt free for a few months and the piece of mind is wonderful.

[bruce2288]

Curtis, If you are in Kansas there have to be a lot of small parcels of land that could be rented. If you are operating on 20 acres, 5-10 acres would be a sizeable increase. Here small or irregular fields are not the favorites of farmers with big equipment. Pasture that will not carry at least 15 cows is not sought after by most. I would look around for small pieces of ground close and approach the individual. A large farmer with a 1000 or more acres may be happen to not have to mess with a 12 acre field.

[thestartupman]

I hope this thread keeps going for a while, with a lot more input. I am planning o start my farm debt free. I have to say that having enough customers that you are having trouble keeping up with would be a problem I would enjoy trying to solve. Curtis, do you live near a large city?

[7thswan]

Figure out what product brings in the most profit and go with that. Cut down on the others.

[AuntKitty]

Maybe contact local 4H or agricultural college to see if there is a student near where you want to lease the land who could help with daily chores so you wouldn't have to go to the land so often?