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.