Starting a new farm comes with many challenges and uncertainties. But one key factor to being successful is having solid financial numbers. It’s important to understand your cost of operation, know your inputs, and set realistic yield expectations. By having solid financial numbers and projections, you can make informed decisions that pave the way for your farming success.
Kevin Plante, Senior Agriculture Specialist at the Wisconsin Farm Center, says the first step new farmers should take is establishing a plan of action.
“Utilizing the SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goal-setting framework can be a valuable tool,” explains Plante. “However, it’s essential to approach this as a multi-year transition. Starting small and gradually scaling up is often a more realistic as well as sustainable approach.”
Accepting the reality that you might encounter obstacles and temporary fixes along the way is crucial. While you may aspire to own top-of-the-line equipment, you might have to make do with what’s available initially, using a bit of “duct tape and baling” to keep your operation running smoothly. Land leasing may also be a viable option at the beginning, especially if land prices in your desired area are high.
Market volatility can significantly impact a new farmer’s operations, especially in today’s uncertain climate. Therefore, it’s important for new farmers to explore risk management tools and resources. These may include futures contracts and options to reduce price fluctuations and provide a more predictable income.
“One of the main concerns for new farmers is the escalating prices of agricultural land,” says Plante. “While some regions have seen record-high land prices, it’s important to evaluate whether investing in land is a viable option. Assessing the capacity of your operation relative to the cost of inputs, operational costs, and also expected yields is key.”
New farmers should consider how much debt they can comfortably have without compromising their financial stability.
Plante adds, “For those with questions or seeking guidance on their farming journey, Wisconsin’s Farm Center offers assistance. Our team is ready to engage in conversations, understand your needs, and help you chart your path to farming success.”
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