If you’re looking to get into farming, you can get started for as little as $600 up to $10,000 or even more. If you’re looking to start at the very basics, that number might be accurate, but the more greenhouses you want, the more machinery, the more labor that goes into starting your farm, the more funding you’re going to need. Check out this blog post for a breakdown of farm startup costs and how you can get financing to get growing!
First of all - what kind of farm are you starting?
Obviously the parameters of your farm will make a huge difference in the startup costs for it. If you’re going to be doing a small, organic, market-garden style farm, your costs are going to be much different from a large commodity farm’s. For the sake of this blog post, we’re going to assume you’re looking to start up and finance a small-to-medium sized market garden farm, because those are often more difficult to find financing for than a large farm.
How can I fund my new farm?
Crowdfunding!
Startup farmers often have a great community backing them up. Maybe if they started gardening as a hobby, they amassed a community of friends they shared their bounty with. Farming communities are often close-knit as well, with farmers helping each other out on each other’s land. This means that startup farms might be a good business to crowdfund - especially if they run an investment crowdfunding campaign.
When you run an investment crowdfunding campaign, like with Honeycomb Credit, you can raise money for your farm and also support your neighbors by paying them back!
USDA / SBA Loans
The USDA has a number of different loans available to farmers, from operating loans to ownership loans (which help farmers own their own land or expand their farms). There are even loans for Beginning Farmers!
The Small Business Administration (SBA) is another federal agency that can help connect farmers to loans - you can check out their Access Financing Wizard to see what’s available to you.
Grants
There are a number of different grants, through the government and through agriculture nonprofits, that can help startup farmers get financing. If you’re looking to innovate how to get your produce to the market, if you’re looking to grow specialty crops, or if you are raising sheep, these are all grants that are available through the USDA for farmers.
Up-Front Start Up Farm Costs
When you first start up your farm, there are going to be some costs up-front that you’ll need to take to invest into your business. Here’s a brief rundown of some of the basics - some things may or may not apply to you, depending on your style of farming and your situation.
Property
Probably one of the major up-front costs is going to be the land you farm on. Maybe you’ve already got a piece of land that you’re planning to use as your homestead, and sell produce you grow. Or, if you’re already starting from scratch, you might be looking for a place to buy or rent. This cost is also going to fluctuate depending on how much land you think you’ll need. You can easily start a small farm on as little as a half acre, but if you’re looking to grow rapidly, you probably want to find a parcel with more space.
This cost is going to be widely variable depending on where you decide to start your farm. For example, an acre of land in Wyoming costs on average $740, but in California it could cost $10,000.
New farmers often find ways to lower costs of property when they’re just starting out by a variety of tactics. Some people make deals with already established farmers to be able to work a bit of their land in exchange for some labor on the other farmer’s land. Many urban areas have Adopt-A-Lot programs inviting urban farmers to grow on vacant lots in the area (and some, like the Pittsburgh program, even include licensing so that you can sell the produce you grow on that lot!)
Equipment
This is going to be another item that’s dependent on the size of your farm. If you’re planning to work mostly with hand-power, you’ll still need shovels, rakes, broadforks, pitch forks, irrigation systems, wheelbarrows, and more to make your farm as efficient as possible. This can cost upwards of $500.
Machinery
If you’re looking for machinery for your farm, whether it’s a tractor, a rototiller, or something else, expect to pay several thousand for each piece of equipment. A walk-behind rototiller is priced from $239 to $899, A compact tractor can cost from $9,000 to $12,000.
Greenhouses
If you live somewhere with winter snow and cold temperatures, you might want to invest in a greenhouse to give your seeds a nice start and expand your growing season through the winter and fall. Whether you just want a small shed-sized greenhouse or a fully-functional hoophouse or solar high tunnel, you want to include a greenhouse in your startup costs.
Building a greenhouse costs about $15,000 on average, and ranges from $2,000 to $25,000+.
Refrigeration
If you’re working with perishable products like produce, eggs, dairy, and meat, you’re going to need refrigeration to keep them fresh and safe. It can be as much as a household refrigerator ($500-$1,500) or two, or as large as a walk-in cooler ($7,000-$13,000). If you’re traveling long distances, you might also need to consider a refrigerated van ($50,000), or maybe a couple of chest coolers would be all you need.
Business Licensing
Besides all the physical stuff you need to startup your farm, you need to make sure that you’re able to safely and legally sell the produce you grow! The licenses and costs you’ll need vary by state and locality, so check with your local government to see what you need to get. Usually business licensing costs $100 or so, but it depends on where you live.
Recurring Costs of a Farm
Seeds
Depending on how much you’re looking to plant, as well as what you’re going to plant, you should expect to pay $400-500 on seeds for a small-to-medium sized farm.
Fertilizer and other inputs
Often seeds need a little boost, such as fertilizer. You also need to consider fuel, if you’re using machinery, or any chemicals that you might use, if you choose to do so. Expect to pay roughly $200 an acre for all these inputs.
Labor
Most likely when you get started farming, you and maybe your family members will be the primary source of labor. You might want to factor this into your startup costs - what are your living expenses, and can you afford to devote the time to farming?
Actually, most farmers have a full-time job and farm part-time to supplement their income. Or, one partner will have a full-time job and support the other who farms. This gives them the chance to have more income, potentially have health benefits, and it also looks good to lenders to have some off-farm income.
Insurance
Insurance for your farm is a must, especially because the weather makes harvests often unpredictable. You can insure your farm for as little as $2,000 a year. You want to make sure you’re insuring any structures you have, any machinery, and even large livestock like cattle can be insured!
Packaging
Whether you’re farming direct-to-consumer or are selling primarily to restaurants, packaging is going to be something you need to consider. If you’re selling D2C, you’ll need packaging that works for small serving sizes, like smaller plastic bags or ties. You can probably get away with less packaging for selling to restaurants, since they often buy in bulk, but you’ll need crates and boxes to store and transport your products. Expect to pay $100-200 in startup costs for your packaging.
Farmer’s Market Fees
If you’re looking to sell at a farmer’s market, there’s a chance you might have to pay a fee to set up a booth in the market. This helps the market’s organizers cover their own costs, like the managers’ salaries and other fixed costs. This cost depends on the size, location, and popularity of the farmer’s market you’re looking to sell at, but can range in price from $20 a week or $500 a month to rent a booth.
Now you know the costs, are you ready to plant the seeds?
When you’re looking to finance a new farm, or expand on your existing one, consider crowdfunding a small business loan. You can build up your community around your farm, improve your customer relationships, and access capital you need to grow. Learn more by filling out the form below!