Profitability?

I think of "living off the land" and "homesteading" as a way of life, being one thing and farming for profit as something every different, Everything we sell is a profit and we declare on our taxes, everything we raise and use is breaking even, every loss or mistake is a learning/training experience. (and these on going education opportunities are a valuable asset)

Our place was profitable from day one, because our goals where in line with homesteading, not farming or just living in the country.

__________________
Thumper/in Okla.
Growing a Homestead from the dirt up.

save the grass, eat a cow
C.L.F.
{chlorophill liberation front}

Read Joel Salatine's books. Just remember, any new activity has a learning curve. He has written several books on how to become established as a farmer.

In Joels case, he started farming AND Farmers Marketing as a kid. It DID take him a few years to become prosperous, but you will take more because you will be learning from scratch. That doesn't mean that you cannot do as well, just that it will take you longer even IF you make his plan work for you. Last I heard, Joel was making $25 an hour farming.

I will try not to repeat some of the excellent information you have already been given.

DH and I bought land long before we thought we could move to the land. We worked to get it paid off, put in the well and septic and took the kids on weekend vacations and camped out on the land. So, you might think of finding the land and just letting it sit for a while.

Any business, regardless of what it is, needs capital. Capital for starting and capital for staying with the business while not making a dime of profit. So, as part of your plan, figure how much you would need if the farm didn't make any money at all and how much you would need to provide the farm with everything to get it going and then figure that you will need to provide that money for 3 years and then double what you think you need.

Figure up what you think you need for moving expenses, temporary housing, and money for a permanent house. Then double that. Add that money to the above amount.

You can offset a lot of this money if you or your spouse will have a job while getting started.

Farming is a broad term and you need to define it for yourself.

I live in a farming community. These are generational farmers. Very few of them do not have off-farm jobs. The ones that only farm tend to be strictly grain farmers who lease a lot of land. They don't own land, they own equipment.

My husband has farmed all his life. We have close to 1000 acres altogether. Row crops, 100+ head of cattle, a few hogs and I have my chickens. We cannot make a living. The farm makes money, but not enough to for us to live on. If we didn't have the kids, we could maybe do it, but not now.

Health insurance is probably the number one reason why people work. Either they get it through their jobs, or the job pays the premiums. We are fortunate that my husband got life long insurance as part of an early retirement deal.

It is true that you often get paid once a year, but usually farm loans are also due once a year. Often people have operating loans or lines of credit to pay expenses inbetween, but then you get stuck in a trap of paying off the loans with the crop money and being dependent on the next operating loan. So,e creditors have been known to refuse to give an operating loan with little notice and thus sinking a struggling farmer. Farm Credit Service is one that I know of that likes to do this.

It doesn't sound like you would be doing the kind of main-stream commercial farming thing, so I guess that wouldn't apply to you.

I have found that specialty markets take time to grow. My meat business is doing very well, but I have a long ways to go before I could sell all my calves that way! My chickens are catching on, but there are still plenty of people who haven't heard about me or aren't willing to try my stuff (yet). I don't know where I'll be in five years, but I can't get to that point in one year, or two, or three. It takes time.

It will do you absolutely no good to produce something if there is no demand for it. Be sure you have a market before you invest a lot in an enterprise. Slow growth allows you to invest as your market grows, but you have to wait for that income.

If land prices are rising that rapidly in your area, you may very well find yourself zoned out of farming before you were quite ready for that. Climbing prices usually means developers have moved in and they can ruin a good thing (farm wise) faster than you think. It might not be as simple as zoning out ag (something that is protected in IL), but escalating rules and regulations are just as effective in turning a profitable enterprise into a unprofitable money pit.

In my situation, I didn't make a business plan or start from scratch at all. I married into an operating farm, but I saw opportunities to make it more profitable, using what was at hand. That is working well, but if it didn't work out....no harm done really.

Jena