Alternative Farm Enterprises

Agriculture, in general, has entered a period of financial crisis. With lower crop prices and below average yields, farm income is much lower. The lack of rain in August and early September resulted in average soybeans yields around 40-50 bushel plus/minus. I am hearing yields ranging from 130 to 220 bushel on corn, but most farmers tell me they are averaging 180 bushel or less, but takes almost 200 bushel to break even. So, farmers are hurting financially. Soybeans were so dry (as low as 4-8% moisture) that many beans shattered and many early harvested soybeans fields had a perfect new crop of soybeans growing after a rain in late September, but most are gone now with frost. 

Some small farmers may be looking at alternative farm enterprises to supplement their farm income. Regular commodities row crops like corn, soybeans, and wheat have a lower profit margin and farmers make money when they produce high volume or yield. Alternative farm enterprises may improve farm profitability by increasing diversity and usually have higher profit margins. However, the learning curve can be steep, the risks are higher, and it takes a lot of research to understand new farming techniques and markets. There are a wide range of alternative farm enterprises such as bed and breakfasts, tourism, wild and cut flowers, unique livestock, mushrooms, herbs, and greenhouse crops, etc. Many small farmers use this business diversification to improve farm profits and farm satisfaction by working at home as their own boss. 

The first place to start is to research possible alternative farm enterprises. This starts by taking an inventory of your soils, your climate, your interests (livestock versus plants, abilities, knowledge, finances) and also your assets like barns, equipment, other facilities, and also your risk tolerance. Let’s take an example. Say you are interested in blueberries. Blue berries require very acid low pH soils (pH of 5) which tend to be muck or high organic matter and they take several years to grow. For most of Ohio, this is not a good option but a few blue berry enterprises do exist locally. Blue berries are often fertilized with ammonium sulfate to lower the pH and add sulfur. Citric acid can also lower the pH quickly. Most of our soils are not a good fit for blueberries. Good research can prevent a disaster. Good research should include talking to current growers and buyers for your potential farming enterprise. 

For some farmers, the easiest solution may be a part-time off farm job. But if you are serious about starting a new enterprise here are some suggestions. Most new enterprises require good marketing skills. Find an outlet for to market your enterprise first. Develop a marketing plan, seek out marketing channels, and get professional help. Universities and Extension offices have a lot free resources that can get you started and can help direct you. 

The University of Maryland specializes in alternative farm enterprises and offers these tips. It helps that they are located close to many major cities on the East coast. Here are several things that they suggest you consider before starting a new farm enterprise. Before making a switch, you should be able to answer several important questions: 

• Does the enterprise, product, or service meet my long-term goals for my farm and family? 
• Do I have the research and marketing skills to sell the product? 
• Does my farm have the right type of soil and climate to meet growing requirements? 
• Can I meet standards for this enterprise, such as organic certification? 
• Can I provide the required labor management? 
• Do I have, or can I afford, the facilities and equipment requirements for this enterprise? 
• Does this enterprise fit in well with my other farming enterprises? 
• Does this enterprise have a strong potential to meet my financial goals, including the level and timing of returns? 

Finally, before investing in an alternative farm enterprise, you need to make several phone calls: 

1. Call your local zoning office to determine if you can have a permitted business where you live. 
2. Call your accountant to seek assistance in determining its economic feasibility. 
3. Call your insurance agent to see what types and costs of insurance are needed for the enterprise. 
4. Call your local Extension Agent and Marketing Specialist for support with production, processing, or marketing. 

Despite the need for caution, many farmers are successfully growing and marketing alternative crops, products, or services. Starting a new business can be exciting but it is also stressful. On average, about 60% fail within the first few years. But with good research and hard work, many also thrive. Source of Information: University of Maryland Extension.