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Financing the farm

12/9/2015

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As a farmer just getting started, I've found that the hardest part of starting out is financing the farm. Farming is hard work. Period. Getting started out in farming without having a family owned farm for many generations is even harder! We were very fortunate to find a great piece of land with a house, a stock pond, a small orchard and room to expand at a very reasonable price; however growth is limited by a small budget, medium entry cost and a long return time on your investments. Lets examine a real world scenario.

I raise chickens. Now there are two ways to purchase chickens: as chicks or as pullets. Chicks are relatively inexpensive at $2-3 a piece, but you have to feed them for at least 5-6 months before you expect to receive any eggs. Pullets are 3-5 month old birds that are usually ready to lay within a month or so of receiving them, but they are much higher cost, usually around $18-20 a bird. In order to achieve a steady production of 10 doz eggs per day, you need around 150 birds. That's a lot of feed if you go the chick route and about a $3,000 investment if you go the pullet route. Each dozen eggs will gross about $3-4 so your ROI per day will be about $35 per day or about $1,000 per month. Sounds like a good amount of money, but then you have to factor in variable costs like feed, water and electricity (if you raise chicks, you have to keep them under a heat lamp for a while). You also need to factor in your fixed costs like outbuildings, fenced areas (coyotes can decimate a flock in short order) and roosts/nesting boxes.

Adding up all these costs extends out your ROI time frame from 3 months to over a year before you start seeing a real profit. In the meantime, your getting "free" eggs, but a family can only eat so many eggs before a delicious, nutritious, free range fried egg sandwich doesn't seem so appetizing. In the meantime, you're planting gardens and harvesting fruit from the trees and catching fish out of the stocked pond to supplement your food budget, but there are still things you can't produce on the farm. (I refuse to use leaves when I am on the throne and TP doesn't grow on trees! :)  )

Would I go back to an office job? Only if I ABSOLUTELY had to. Am I enjoying what I do daily? Definitely!! Will I ever get "rich" as a farmer? Probably not. Being a farmer requires looking at the long term end game while potentially forgoing some short term luxuries, but I feel that it will be worth it in the long run.
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    I grew up on a small farm in rural Michigan. My earliest memories are of feeding the chickens and picking blueberries with my dad. Share my experience as I create those memories with my twin daughters.

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