Lots of big city folks are looking at alternative ways of living. One way is to completely sell the corporate 9 to 5 job with suburban home, and move the family to rural America (i.e. Iowa) to start your own farm! Sounds like a scene from a movie doesn’t it? A scene where the mom and dad are swinging on the front porch while the kids frolic about the yard playing baseball and picking flowers.
As fun as it sounds, getting into traditional farming is a lot harder than it sounds. From first hand experience, when I took over my dad’s farming operations, I never knew the complexity and know-how it takes to start farming. Now more than ever it takes having a lot of things in place in order to make this cultural and financial shift.
Here are a few things you need to know in order to get started farming:
- Leasing/Owning – so you want to move to a farm, huh? First off, you’re going to need a place to raise your crops, so start looking early. If you want to buy (prior to moving), then expect to pay a hefty price right now! Recently, in Iowa I’ve seen some properties go for $14,500/acre! For a traditional quarter section (160 acres) of land that would cost you a measely $2.32 million!!!!
- Equipment – since you’re going to start “living off the land”, then you’re going to need to have equipment to plant, control weeds, and harvest. If you are just starting out look at buying used, and not jumping for the latest and greatest planter or 24 row combines! If you want to start out small, then look at buying 10+ year old equipment.
- Line of credit – part of the sticker shock of farming was the initial line of credit that is needed to start! I was amazed at how much credit or cash is needed to pay for the land usage, fertilizer, seed, and equipment, and that’s even prior to putting your seed in the ground. Be prepared to have a lot of cash saved up or have a good friend that happens to be a loan officer. :)
- Repairs – every good farmer MUST know how to repair their equipment. It starts with basic maintenance that includes oil changes, greasing, and filter replacement. A good place to start is the users manuals that come with every tractor, planter, disk, combine, or sprayer. My grandpa kept every tractor manual he had from 1940-present, because he always knew they’d be helpful someday since repairs are a given. Welding and manipulating iron is a must as you develop your repair skills. Over the long term this personal commodity will go a long way to help save your farming operations money.
- Market Your Crop – like any job you need to make marketing you crop a top priority if you’re are going to make farming your way a living. Look at what options you have both locally and remotely (greater than 50 miles away) to sell your grain. A lot of consumers are paying premiums for organic or non-genetically modified grains. Also another great tool to leverage is buying puts and calls (short and long selling) of your grain on the commodities boards and exchanges. This way you can lock in a guarenteed price on your grains (puts) or reown it through buying a call.
Lastly, realize that farming is a lot of hard work! It’s not all roses, and there a lot of ups and downs that go with it. Farming can be a very stressful business and especially if it’s your sole source of income. It’s stressful, because there are so many highs and lows in grain prices and so much of your production is dependent on the weather. So going into this realizing a lot of variables are out of your hands.
Are you interested in farming? Are you thinking about making a switch from your normal suburban life? What’s stopping you?