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Profiting From a Micro-Farm
By Laura Wheeler of Firelight Farm
I met a woman who had retired to take up herb farming. I thought she was nuts. I'd been a small business startup expert for many years, and the one thing I knew was that you cannot make money from a farm. If you are going to do anything to make money, that WASN'T something lucrative! Imagine my surprise to learn that I was dead wrong! It started with Crohn's Disease. I have it. I decided to treat it naturally instead of with medications. That meant I required a whole host of natural foods that were very hard to find. I started shopping the little corner grocery shops, and frequenting markets where merchants sold produce and eggs direct from the farm - no distribution channel. One day I had a talk with a store owner, and was surprised at how much of the price of what I bought went directly into the pocket of the farmer. Once I learned that, I started researching the markets. I've always had an entrepreneurial bent, figuring that if I could DO it, I could also SELL it. And we had come to the conclusion that the only way we were going to be able to control the supplies of the things I needed, was to grow everything ourselves. I was now learning that I could, in fact, profit from our little budding micro-farm. There were some tricks to it. There's a whole economy out there, and a whole series of assumptions that people make about farming. They assume you are going to build a broiler house and raise thousands of meat chickens the same way every other chicken farmer does, and sell them to Tyson. They assume that you'll buy a lettuce farm and grow only lettuce. That you'll sell to a packing house, and make only pennies on the dollar of the selling price of your product. They also assume you'll run a large enough operation to be subject to federal regulations that will make it prohibitively costly to do business, and that the small farmer can just never compete with the big ones. Well, if you follow the rules of all those assumptions, they are right! You'll be broke in no time! If you think about doing it a different way though, the equations look quite different. For every successful corporate farm out there, there are hundreds of dissatisfied customers who want something better - something fresher and cleaner, and they'll pay well to get it. You just can't think like a corporate farmer if you want to succeed as a small farmer. 1. Find the things there is a demand for LOCALLY. This varies by location, so I can't tell you to sell eggs - that market may be saturated in your area. Find out what there is a demand for, that you can supply.
2. Sell in-state only. In the US, this is one of the elements required to avoid having to meet federal regulations for your produce or eggs.
3. Do not sell meat already processed. Just sell animals for butcher if you want to raise animals for meat. If you sell meat, you get into HUGE regulatory issues.
4. Look up the regulations for selling YOUR product. See what the lower limits are to avoid federal oversight. For example, if you have fewer than 3000 hens, you can sell ungraded, uninspected eggs for human consumption, as long as you label them correctly.
5. Find local markets where you can sell your product - you can sell them to local natural food stores, farmer's markets, via online listings, by putting flyers up on bulletin boards, etc.
6. Check with your state to see about regulations for selling produce or eggs. Sell the things that aren't regulated to death. This is important in keeping your profits good.
7. If you sell breeding animals, supplies, hatching eggs, etc, you can often make more than you can selling food. This means maintaining good lines, but it is potentially more lucrative than selling animals directly for food.
8. Avoid selling items that have costly batch verification regulations. If you sell potted herbs, no batch verification. If you sell bagged herbs, you have regulations to abide by.
9. Raise animals and garden crops together. This combination keeps your animal feed costs low, your animal health higher (and vet bills lower), it keeps the gardening costs lower because you have plentiful soil enrichers from your animals, and allows your farm to be more self-sustaining, and therefore more profitable. This can be done even in limited spaces, rabbits take up very little space, but produce a lot of manure for the soil.
10. Diversify - raise a variety of crops and animals. This way, if one flock or crop is hit, others are likely to survive. This provides a buffer that allows you to weather hardships that non-diversified farms will not be able to survive.
11. Organic labeling has to meet federal requirements, and that is expensive. "Naturally raised" items do not, and they'll sell just as well at a farmer's market, where people can ask just what that means. The point is, do the things that are inexpensive to do, and have minimal regulation, but which still have healthy profit margins. Keep your operations small and limited to specific regions to fly under the federal radar and legally be able to sell farm products without costly inspection and licensing requirements. Make sure you know the regulations, and abide by them, so you can sell without fear of getting caught doing something illegal. I now know that small farms can be very profitable, and that the stereotype of the "poor farmer" was largely created by small farmers trying to take on the big farmers on the same terms as the corporate farm. The small farmers who do it differently live well.
Laura Wheeler is a mother of eight, designer of websites, milker of goats, and feeder of chickens. She's also a small business startup expert, and Webmaster Trainer.
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I totally enjoyed reading your intel Laura. I found it to be quite an informative article. Thanks again for sharing such valuable information.
Great Intel, thank you!
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This intel was contributed by Laura
Laura
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May, 2012
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