Financials of a start-up farm

Most businesses don’t make money in their first year. The initial investments in property, supplies, utilities, and other product materials can be significant.

Farming is no different. I’ve spoken with some farmers who have spent almost a decade trying to turn a profit. It’s even more difficult for many of the sustainable farmers who don’t benefit from government subsidies in the same way the conventional farmers of the Midwest do. One farmer in Bedford County, Virginia, admitted to me that he would not be able to do what he does now if the land wasn’t already in his family’s name. Trying to lump that kind of property cost onto him (in addition to the machinery and other things he pays for) would have buried his farm.

I understand this now better than ever. I’ve said in other posts that farming is not my primary source of income, so financial impacts don’t hit me as hard as they would full-time agrarians. While we have sold some of our garlic and other produce in seasons past, 2011 is the first year that we have truly looked at this as a business, along with the marketing, inspections, certifications, etc. that go along with an energized business (it’s part of the reason you’re now reading this blog).

Despite our business-minded focus, our revenue stream remains small. We expect less than $1,000 this year in income from our produce. That is, if we didn’t have to occur any up-front costs. But this is essentially a start-up business, so costs abound. I’ve tallied our anticipated numbers, and once we account for holding back a part of our stock to use in the next planting, we will get back in sales only 50 to 60 percent of the money we have put into farming this year.

That means hundreds of dollars that we will lose. The notion isn’t entirely unexpected. Farming is something that my wife and I love, and like any passion (whether it’s skiing, boating, bowling, hiking, automobiles, etc.), people have to spend money to pursue it. We do hope that as our investment costs go down, that gap between what we spend and what we make in revenue will close ever more tightly. Someday, our spreadsheets may even go into the black.

But as part-time farmers, making money isn’t our priority. Getting good food -- grown in the best ways -- to people is important. It goes back to the idea of being stewards of our land, of the environment, and of society. That mentality does pay for itself.

Will more acres of corn translate into greater yield? We hope so.

Opening the business section of a newspaper over the past couple of months, it’s a safe bet that you will have read about rising food costs and their link to one of the most basic ingredients in our food supply: corn.

Last week, The Associated Press reported some good news for consumers on that front. U.S. farmers planted their second-largest crop in 67 years. The implications of this are that we could see a greater surplus of corn come harvest time and the possibility of lower food prices.

Yes, it’s possible. Yet it’s wise to lock into the uncertainty of that word.

We are also in the midst of a treacherous and devastating meteorological year, during which tornados have already killed hundreds and destroyed miles of property, and flooding in some parts of the country seems to be counterbalanced by drought in other parts. The Associated Press is reporting on the optimism of the food industry as its article begins by saying, “U.S. food prices may ease later this year …” I , too, appreciate optimism, though I am also aware of the brutal honesty of agricultural life.

After hearing about the woes of farmers in my native Midwest struggling to get seed in the ground because of the wet weather, I am surprised at this latest report of the 92.3 million acres being planted. I also wonder whether getting the seed in the ground as late as many did will create a new reality of what 92.3 million acres mean. For example, if all other factors were equal, 1 million acres under a normal planting schedule would certainly yield more crop than that same land would under the abbreviated time frame.

Food inflation is something that should be of concern to people at all economic levels. More corn would give all of us a reprieve from rising prices -- but there are so many factors still to come that it’s prudent to keep your optimism at least a little guarded for now.

Accepting farming in many forms

Everyone has an agenda, but not everyone makes their agenda apparent. And a good journalist does what he or she can to set aside any bias and write factually and objectively on topics for which the writer may not agree.

In many parts of my life -- especially my work professionally in print and online journalism -- I seek out that balance both in my own work and in the work of others. Last night, a colleague and I had a brief, but important, discussion about our feelings toward different farming methods.

My bias, as it may come out in this blog, is in favor of sustainable farming, which often incorporates organic and organic-like processes (such as the grass-roots Certified Naturally Grown). However, I did grow up in Indiana, where corn and soybeans are abundant -- as are the pesticides, herbicides, and fertilizers to encourage their growth and easy harvest. If I could call the world a perfect place, we wouldn’t have any of those chemicals being sprayed onto our food.

Of course, the world is not a perfect place, and I have come to accept these things that I perceive to be imperfections. Conventional farming is solidly ingrained in society and supported by our government through federal subsidies. Authors and advocates such as Michael Pollan have highlighted the links between chronic health problems in America and the rise of processed and chemically altered food. They have also shown us that conventional farming produces crops that are less nutritious for the current generation than they were for our parents’ and grandparents’ generations.

The key, though, is that conventional farming produces. Period. It’s not what it produces, it’s simply that it does produce. Without this method of farming, people would starve. Usable farmland is being devoured by development as the population of the world grows and grows. That forces the agriculture industry to seek higher yields and to make those yields more affordable to consumers. Pollan gained my respect when, after chapters of promoting his vision of the ideal agricultural society in his book “In Defense of Food,” he did make concessions that the ideal won’t work for everyone.

Sustainable farming can’t survive against the rising price of land, and people without a farming ancestry rarely can afford -- or would choose -- to become first-generation farmers.

Accepting things for what they are doesn’t mean standing idle while the environment and health of society deteriorate. Speaking for change is good. Telling the government to spend more encouraging sustainable agriculture projects and less on conventional ones is good. Walking to the farmers market and buying the fresh produce there is good.

And realizing that conventional farming has its role in our modern, populated world is okay, too. We don’t have to love it, but failing to acknowledge it is simply irresponsible.