Monday, February 15, 2016

Stages of Learning in Farming - Laying the Foundation

In my experience, every new farmer goes through stages of learning in building their farming knowledge and expertise. Lisa and I completed Land Stewardship Project's Farm Beginnings class in 2001. We learned much in this class which was organized to help beginning farmers get started. Even with this advantage, we had a significant learning curve to make the transition from growing on a small scale (literally gardening in our back yard) to taking the first steps into the commercial market place on a scale that is 10 or even 100 times the size of our starting operation.

I am going to organize these stages according to our recent experience. The farm calendar typically operates on a seasonal basis and whether you are growing vegetables like we are, or growing row crops and small grains, or livestock, the stages are similar. I have provided links to other articles on our website  for more in-depth information on certain topics

Laying the Foundation

I'm going to define our experience before Farm Beginnings class as Stage Zero, each prospective farmer or farm family may have significant experience prior to attending the class. In our case we had been growing 1/4 acre of organic vegetables in our back yard and marketing them at our local farmers market for 5 years. We had a net income of about $5,000, most of which we reinvested in tools and equipment. The important thing in Stage Zero or the "pre-farming" stage is building experience, learning from others, and laying a financial foundation. You could consider Stage Zero to be a transitional stage, the end of which is an event like the Farm Beginnings class.

Key elements of Stage Zero are:
  1. Hands on experience. You will never have a better time to build experience than before you have committed to your farm enterprise full time. Mentorships, internships, and actually engaging in farm activities on a limited basis will help you match your interests with real farming activities. Find farmers who will stretch you and challenge you where you don't always know the answer to the next question. Farmers who know what success looks like looks like. This stage of exploration will either lay the foundation for the future or confirm this isn't the path for you. If you are married, it is very important that your spouse is on board with your direction. Small farms are a great lifestyle and a wonderful way to raise children. But not if you aren't both on board.
  2. Learning. Most of us know that hands on experience is valuable. But don't forget that learning from the successes and mistakes of others can jump start your farming process by years and even decades. This can be through a mentor or reading farm books or business books in your area of interest. Every hour spent on learning will multiply your time ten fold in avoiding mistakes that can derail your farming dreams.
  3. Lay a firm financial foundation.  Here is a financial check-up. Not everyone will agree with what we did financially. Some will tell you that you can grow faster if you borrow money to capitalize your farming endeavors. This is true, you can grow faster, but you can also fail faster. My advice is "don't borrow" to start farming! We didn't, it can be done. 
  • Find a way to save up for your tools and equipment. I spent about $5,000 a year on tools for about 10 years after our Farm Beginnings class. Here is an example of the money I have spent on pickups for our farm..
  • If you can save a good nest egg prior to starting farming, life will be well. Our savings was used to purchase our first tractor for $7,000 and make a down payment on a farm. This was not the normal 10% or even 20% down payment. We paid 70% down on our 30 acre farm and house. We had been debt free in our urban home for over 10 years, so we used the equity from our home. I wish we had been able to pay cash because that last 30% has been the hardest  to retire, especially with 3 of our adult  children soon to be in college. (They are attending college debt free by the way. Here is an article from my 21 year old daughter on her debt free college journey and how she made $10,000 last summer towards that goal.)
  • Get rid of all personal debt. Cut up the credit cards, pay off automobile loans and student loans before you start farming. You cannot service large amounts of consumer debt in the early years of farming. Debt will derail your farming goals faster that almost any other factor.
  • Save up an emergency fund. My father would have said you need to save for a rainy day. One thing is for sure, sooner or later it will rain. You need to be ready. Financial teachers say the typical guideline is 3-6 months of personal expenses. If you have to dip into the emergency fund, then make it a priority to replace it.
  • If you need to get a second job this is a far superior to taking out loans. Better to work 20-30 hours temporarily off the farm to meet a goal for the purchase of equipment or land than cripple your farm goals. Maybe this extra work could be done in the winter when the work load is lighter.
  • Take advantage of free stuff. Most soil inputs can be almost free.
  • When I purchased our original tractor I started saving for the next one because I knew a used tractor had a finite life and would need to be replaced. This is called a replacement fund.
  • The only thing that I would consider going into debt for is land, but only if I could make a strong down payment and have an very strong plan to make the payments. Renting land is always an option and there are some Land Stewardship Programs to connect land owners with beginning farmers.
The next article in the series is Stage 1 - Building on the Basics.

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