How to finance becoming a farmer?

Discussion in 'Homesteading Questions' started by qtkitty, Apr 19, 2005.

  1. qtkitty

    qtkitty Well-Known Member

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    With land costs as high as they are how do farmers get started and able to get land to work? Are there grants or special loan programs?

    I am extremely interested in finding farm land and building my own working farm. I would like to make the main focus of the farming to be rabbit farming (meat, pet/show quality, and fiber AKA angora) with a secondary focus of red worm farming as well as a side of finished compost. (When we could afford it Alpaca.)

    I would also like space to allow us to become more self sufficient with extra to sell at farmers market or a road side stand if we have the location along with the worms. In the long run i would also like to start a green house for personal use and the sale of plants( and to use some of that compost that would be produced).

    My question is how do farmers get started if they did not have a farm passed down to them? I do not know if states have programs, but i would have to get a farm with in an hour of a rabbit processor ( from what i have been reading that is the only way to profit at all with in the first year). Does anyone know of anyway i can make this dream of mine a reality?

    I know that the Farm Service Agency has loans for new farmers, but do they ask for repayment from day one or do they allow you a certain amount of tiem to get stock and crops set up? Kevin's parents got their chicken farm by this method, but they seperated about 19 years ago and trying to get answers out of them is like :bash: . They had no prior experience in farm managment that neither Kevin nor I know of.

    Our Local Farm Service Agency told Kevin that this area does not have a demand for rabbits( WELL DUH .. no rabbit meat processing plants in the county so of course there isn't), that it is more goats and Llamas. Although the #1 stock sold is cattle and it actually gets a btter price per lb then in some other areas. It is okay because we would rather relocate to be able to do the type of farming we wish to do sincead of what is forced on us and where there is a high demand and a future of regular large quantity meat rabbit sales.
     
  2. pcdreams

    pcdreams Well-Known Member

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    I'll be watching this thread closely as I'd like to do the same (except with cattle and chickens).
     

  3. bare

    bare Head Muderator

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    Farming is just like any other business. You get a concept (your dream), put it on paper, come up with a business plan, finance and implement.

    No one, not banks, not friends, not even most sane parents are going to finance a business start up. Why? Because it's obvious you don't have any experience in your dream endeavor and most new inexperienced business people fail.

    Even most lifelong farmers struggle in today's business environment for various reasons. Livestock owners cannot conventionally compete with factory facilities.

    Even though agriculture is rife with government handouts, I'm not aware of any grants for wannabee farmers. Heck, around here, they pay you not to farm!

    Nope, I think yer gonna have to finance your dream lifestyle on yer own, just like the rest of us.
     
  4. mtman

    mtman Well-Known Member

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    if you have good credit save a little money buy your land then tighten up your belts keep putting some money aside when you have a little saved up do something on the land with it and just keep tighten up and keep doing thats what we have done now we are ready for the move in sep. good luck
     
  5. bgak47

    bgak47 Well-Known Member

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    I'll be watching this thread too because it seems to me that most working, family farms are passed from one generation to the next. Even then,many farmers & ranchers have to have a day job to sustain them. The main cost would be the land itself. In order to borrow the money for the land a person has to have some prospect of having a way of generating enough income to make the payments on the loan. In times past,banks were willing to make loans that were payable at harvest time, & carry the loan over from year to year. When times were good the bank got their money.When times were bad the bank got the farm. I've never been a farmer or a rancher, but I think everyone has to make monthly payments now. I bought my 17acr 22yrs ago for cash, & never had any hopes or plans of making a living from it.It would be nice if young people could accquire land for small farms,but I think Corperate Farming is eventually going to absorb most of the family farms. I really don't see how young people could start from scratch & make a living in farming or ranching now.If you can be self sufficient & pay your bills from your land, that would be a great accomplishment.That is exactly what this site is all about, & I've learned a lot here about ways to do that.I'm just looking foward to some chickens & rabbits in my retirement years.Some hunting & fishing & a garden. Good luck to all of you young folks that have the courage to try to make this lifestyle PAY!
     
  6. mtman

    mtman Well-Known Member

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    if you maintain about 40 head cattle and 1 bull you can make enough money to live on if your land is paid for thats why we waited till then to move
     
  7. patarini

    patarini Well-Known Member

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  8. bethlaf

    bethlaf Homegrown Family

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    youre gonna love this
    you cant get a govt usda loan for a rabbit farm!!!!!

    we were just there last month wanting to see if we could get a loan to build our rabbit barn ,
    guess what, even though we are an hour and half away from a large rabbit processor, we couldnt get a loan for that barn ...
    Rabbits ARE NOT "livestock" according to the us govt.

    there areo ther loans available, but not for rabbits
    theres perimeter fencing grants available, from the usda aept of ag, assuming you purchase land that has no perimeter fencing and plan on raising "livestock" IE, cows goats or sheep ( pigs arent considered fencable livestock though and the only money for them is for confinement operations,same as for chickens)
    this according to the info i had from the usda guy

    as for how we make it, hubby works off the farm , we do farmers market for veggiesand soap/crafts
    , sell pigs chickens rabbits goats milk
    theres not one single thing on the farm that makes the most money, and we rely soleley on nothing , the diversity ensures our productivity and financial stability
     
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  9. bethlaf

    bethlaf Homegrown Family

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    oh yes, i didnt mention the 2 years experience because someone else had ....
    its true, cant get a "new farm" loan without having the 2 years exp., and you have to proove it too ....
     
  10. pcdreams

    pcdreams Well-Known Member

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    I suppose it depends on what you mean by "small" farm. We purchased 10 acres for around 1k per acre.

    But I don't see how people pay 100k+ for land (or a house for that matter). I think you'd need a good chunk (100+ acres) to do a small farm that would be profitable enough to sustain itself.


    Selling produce on the other hand can be quite profitable and you don't need a lot of land. Just need a niche in the market.
     
  11. Freeholder

    Freeholder Well-Known Member

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    The best way to go about getting started farming is to start where you are. You are wanting to raise rabbits -- start raising just a few, for your own use. It only needs a few cages hung in the garage or a shed. As you gain the skills necessary, expand a little and let people know you have rabbit available. You might be surprised at how many people would buy rabbit from you right where you are now. Work on your gardening skills. Start some worm bins. Grow seedlings for sale at the local farmer's market. You might not make a full-time income off a city lot, or whatever little bit of land you have now, but you will gain some important skills. Then, when you need more land, either lease some unused land near you, or move to a little larger piece. It will take time, but eventually you should be able to build up to a full-sized farm, and the important thing is that you will have gotten the necessary skills to run it along the way. Raw beginners jumping into farming wholesale is a recipe for disaster. A few might make it, but most don't. The learning curve is just too steep.

    The other really, really important thing is to get out of debt, and stay out of debt. Live frugally, beneath your means. No matter what it takes, keep your finances free and clear of debt. Do without things you might even consider necessities if you have to, in order to meet this goal. As long as you are in debt, you are a slave to servicing that debt, and that is why all those farmers have to work in town, off the farm. Even a small farm *can* support a family, IF there is no debt to service.

    Kathleen
     
  12. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    I am currently starting up a small farm, and I am doing it pretty much the way that BlueJuniperFarm has suggested. For us, the crops are berries, and soon to be asparagus and honey. It gives us the security of our home and employement, while simultaneously allowing us to start. I started in my back yard, and I am now moving my set-up to the land we have bought.

    I DO have a mortgage on my 5 & 1/2 acres, though. Hopefully the sales will soon help us pay off the land. We'll see. We put down a standard down payment, and the realtor told us which bank in the area would finance us. It's bare land which is what we could afford. Our payments are $156 a month.

    Here's an idea. Why don't you take a map and mark off where all of the rabbit processors are? Then, mark a circle of one hours drive all the way around each processor. THEN, check www.unitedcountry.com to see where the affordable land is. United COuntry wants the going price, so if you can afford the land at United COuntry, check with the other area realtors as well because you can afford land in that area.

    We have a rabbit forum here, and there was mentioned just recently a couple of websites to find the locations of rabbit processors. The moderator started in the rabbit business just a couple of years ago, but she had the advantage of already having a barn. I THINK she broke even the first year, so you should be prepared to support yourselves doing something else for AT LEAST a year.
     
  13. Jen H

    Jen H Well-Known Member

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    Even farmers with large acreage who are on land that's been handed down have to take jobs off the farm now and then to make ends meet. The reality of farming is some years you plain old don't get a crop - hail storms take out the almonds just before harvest, the river floods and washes away all of the raisins laid out to dry (actually saw this happen when I was a kid), etc.

    My husband and I waited until our house in Seattle was paid for, the cars were paid for, and we had no other debt. Then we sold that house and bought property outright with money left over to use for apple trees and processing equipment. Plus a little bit to live on while we found other jobs, got the apples producing, and found a niche we could actually make money in.

    I know it feels like it's never going to happen, but it will. You also might have to expand your search to places away from metro areas. The only reason we could afford this place is that it's a 45 minute drive to the nearest grocery store.
     
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  14. woodsrunner

    woodsrunner Well-Known Member

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    It's a secret
    Buy 10-20 acres with a decent house and barn(s).

    Rent cropland

    Make a profit, save a little, buy another parcel for cash.

    Around here open land will set you back $5-$10k an acre. There are still farmers farming and many of them are newer. They only own the homeplace, and rent everything else for what the taxes would be. It's usually cheaper to buy an old farmhouse and outbuildings on a few acres, than it would be to buy a chunk of land.
     
  15. marvella

    marvella Well-Known Member

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    i agree with BJF too. start where you are. it's the only way to gain experience. i think it is a guaranteed recipe for failure to think if you can just borrow enough money, you can buy your way to farm life. start small and let profit feed the next step.
     
  16. agmantoo

    agmantoo agmantoo Supporter

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    woodsrunner has it correct. Buy only the amount of land that you know you can afford to pay for. Use that parcel to demonstrate your capability as a farmer. Rent additional land and take care of that land as if you own it. Get a good reputation and as you prosper rent more land and always tell the owners you would like first refusal should they ever sell. Take few vacations, buy few frills, read the menu right to left when eating out, drive used vehicles, farm with used equipment, stay diversified with you farm products, do not go to doctors unless you have to, pay for nothing that you can do yourself and save your money for the time the land becomes available. When the land does come of the market you will be prepared to buy. Just continue repeating this and you will become a landowner of size. PS... a little Luck hepls also!
     
  17. BCR

    BCR Well-Known Member

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    BlueJuniperFarm hit the nail on the head. Start small, make a profit, add on, build on, all along adjusting business practices/skills to succeed. I think it is important to know that you have the skills to breed/raise/sell rabbits so starting out small is definitely recommended. You may learn that you hate rabbits and the responsibility. You may realize the un-met need you think is there isn't...research and learn. Complete a market survey, etc.

    You want to start a business and the best way is to start with a business plan. You can learn all about them online or in any 'new business' book. This allows you to make mistakes on paper without investing tons of $ first. There are free templates and a lot of good general business startup advice at SCORE.org and the Small Business Admin. online. SCORE offers free confidential business counseling and can help you via e-mail or in person. ATTRA may have some grant opportunities that you could fit into your farm plans, though I doubt they would specifically involve rabbits.

    Remember that this is a new profession and you will have to start at the lowest level and work your way up. Apprenticing with others by working for them is a great way to learn how to and how not to do things. Get some experience and lenders might take you more seriously when you are ready to expand.
     
  18. mtman

    mtman Well-Known Member

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    what it boils down to how bad you want it are you willing to give things up to meet your goal
     
  19. Michael W. Smith

    Michael W. Smith Well-Known Member

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    You have to realize, 50 years & plus ago, most everyone who lived in the country was a farmer, they raised chickens for eggs & meat, pigs, cattle, etc mostly for their own use and what was left over was sold to buy things for what they didn't raise themselves. My grandmother tells how how living in a family of 14, all the kids worked, (can you see that nowadays?), and they had a huge garden.

    You are correct in that most farms are handed down. However, farmers of now can't make a living. The milk price is the same as what they were paid 20 years ago, but fertilizer, crop seed, equipment, etc. just keeps increasing in cost. When growing up as a kid, small farms were everywhere. Most have now died out with the farmer retiring, and the kids getting an education. If the farms are still around (with the farmers living in retirement) I'm sure the majority of farms will be completely gone once the retired farmer dies. Those acres will be sold off to the highest bidder (or developer) if the developers are knocking on the farmers doors now. Raw land around here sells for $1000.00 / acre +, but developers will pay many times that price to get the land to build houses and start subdivisions. That money looks awful good to farmers who work 7 days a week, are barely making it, and haven't had time off in years. Alot of farmers today, work off the farm to even have enough money to keep the farm. One or two bad patches of luck - too wet, too dry, too hot, too cold, disease, tornado, etc. and the farmer doesn't have enough money to pay the mounting bills that keep coming.

    If this is really your dream, I would say move to someplace where a processor is near, and start raising a few rabbits or market them yourself. You might figure out real quick that "farming" is not for you when you have to work 7 days a week, 365 days / year. There are no vacations, no sick days. If the rabbits get a disease, you will have deaths. Some mothers won't be mothers at all, and leave there little ones die. Heat will affect birthing as well as cold weather, etc., etc., etc. I'm not saying it can't be done, but it ISN"T going to be a piece of cake.
     
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  20. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    As mtman says, how badly do you want it?

    I wanted it worse than I wanted consumer goods or a hefty savings account. I did NOT want it more than having kids.

    So, after we got the kids I put my energy towards a farm. And, my farm may be tiny but it is MY! FARM!

    And, I do NOT have many consumer goods and I just used most of the savings account to repair the pick up. Alls well that ends well. :p This is the life I have chosen. :D
     
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