Musings:  Reality Check – Small Farming As A Living (Long Read)

I recently saw a post from an individual who was looking for information about starting a small farm, with the intent of “making a living” off it. Ah, dreams are grand (and we should all have them) but the reality is that it is very difficult to make money running a small farm…for a number of reasons.

First, I am aware that there are many books out there that purport to tell readers how they can make a (profitable) enterprise of their micro, or even nano, farms. By nano, I mean a quarter of a acre, which is what I’d call a roomy suburban backyard. Am I saying it can’t be done? No. What I am saying is that it can only be done under very specific circumstances, in specific markets. Could any person with a quarter acre make their living off it? Doubtful.

When I was new to small farming, I tried to learn as much as I could about it, including how to capitalize on business opportunities. I attended training sessions at the local cooperative extension on various topics (like farm finances and grant opportunities), and also paid for a farm marketing course that was connected to a well-known farm-focused organization. This marketing training ultimately ended up being rather expensive fluff, with few useful takeaways and too many technical problems, but other new farmers attending the course (virtually) opened my eyes to how others were approaching trying to make a living from their farms.

One farm, in particular, stood out in my mind: a young couple who had purchased a large farmstead with existing buildings. They had also jumped in and purchased lots of expensive equipment and many different types of livestock. The home on the property was old and needed work. They were looking for the formula to be able to work their farm full time and make a decent living.

Sadly, I’m skeptical that this farm is in operation today. The desperation in their tone when asking the trainer about how to make money from their farm indicated a couple things to me: (1) that they hadn’t done their market research and (2) that they were in dire straits, financially. Have you priced a tractor? The first time I went tractor shopping (we have a subcompact tractor) I was shocked at how expensive they were. Haying equipment, even for small-scale haying? Expensive…as in around ten thousand dollars. Fencing? Livestock trailers? Housing? Feed? You get the idea.

Most people simply don’t have the capital required to set up even a small farm. Having a small barn built can cost upwards of $10,000. Fencing runs into the thousands of dollars to put in livestock fencing on small property. Fencing!

The couple with the farm I mentioned earlier had the added burden of needing to fix up an old house – the cost of new windows, electrical, plumbing, foundation work (if needed), etc. can be overwhelming. Remember the movie “The Money Pit”?

Not all farmers are lucky enough to inherit land or – even luckier – a working farm that is turnkey. Our farm certainly wasn’t – not only did the house need work, but the barn is very old and was not well-maintained. We’ve managed to work with what we have, using housing like tractors on pasture, but I would dearly love to have a sound, functional barn for a milk cow or to store feed (currently stored in a downstairs room).

New farmers who aren’t independently wealthy will have to face the reality that they will be fighting an uphill battle to carve out a niche for themselves. Small farms don’t receive the government subsidies that huge agribusiness does, like federally-subsidized payments for failed crops and other forms of aid.

Small farms also often aren’t selected for local government farm grant programs (even though, intuitively, it seems like small farms should be the intended recipients); during an information session I attended some years ago as a new farmer, I heard the manager of one of these programs actually say that it’s administratively easier for the agency to simply give a large grant to a single farm, rather than spread it around to multiple farms. These are grants that match funds (usually 50%) for items like infrastructure, so that means that large farms with more capital are the ones receiving the grant money. Small farms are basically on their own.

A few more expenses worth mentioning: filing very complex and convoluted farm taxes and the need for liability insurance. If you can even find an accountant who will file your farm taxes, be prepared to pay a pretty penny for it. The accounting firm we used has a $350 minimum fee for filing farm taxes. That may not sound like a lot, but when you’re just hoping to make a profit, that takes a big bite out of your net.

Other fees include various filing fees for filing articles of incorporation, changes, annual reports, etc. Many counties also charge occupational fees if you operate a business. Our state also has a minimum (limited liability corporation, LLC) tax of $175 a year even if you don’t turn a profit, which means when we had our yearly farm taxes prepared, it actually cost $525 out of pocket, between the prep fee and the LLC tax.

If you’re selling meat or eggs (yes, eggs), liability insurance should be explored. And don’t forget that each state has its own requirements for selling eggs for consumption – ours requires new cartons to be used, for example, and that will add to the expenses.

Another reality: the cost of health insurance. We live in a country that doesn’t offer basic coverage for all qualifying residents, and that ties health insurance coverage (as bare-bones as it often may be) to employers – so if you’re a farmer (self-employed), you have few options for affordable health insurance coverage. If you’re old enough, you may be able to qualify for Medicare; if you’re poor enough or disabled, you may qualify for Medicaid (prior to 2014, childless adults, regardless of whether they met the Medicaid income threshold, were categorically excluded from Medicaid coverage). There is no safety net for small farmers.

What you may also find, when more closely examining those widely-touted examples of farmers who have “bootstrapped” themselves to financial success and are eager to market their methods to the people chasing the dream, is that there’s often a “dirty little secret”: off farm employment. Quite frankly, for the reasons I’ve already described, people dreaming about becoming small farmers should not quit their day jobs. At least not yet. That small farm marketing course I mentioned earlier in the post? It turns out that the individual who ran the course had a spouse who worked off-farm, thus providing steady income and health care coverage. That’s very different than the scenario that she presented in her marketing materials for the course…and it’s that kind of omission of pertinent information that prevents people from making fully informed decisions about what and how, realistically, can be accomplished. Ironically, that individual no longer even runs the small farm enterprise that the original marketing “training” was based upon.

So why is it so hard for small farms to make a living? Follow the money: small farms don’t matter to politicians. If you want to sell your free range, organic-fed eggs, you’re cutting into the bottom line of the factory farm egg producers (you know, the inhumane battery cage operations where de-beaked hens are crammed into tiny cages and treated like egg-laying machines instead of feeling creatures). These egg producers have the money to contribute to political campaigns, so their interests, not the interests of small farms, are the ones that politicians are looking to protect. Regulations ostensibly implemented to “protect” the public place undue burdens on small producers, many of whom can’t continue operating with the skimpy-if-existent-at-all margins small farms have to work with.

I had to fight the temptation to respond to the post I mentioned earlier with something similar to what I’ve just written. I wanted to ask the poster if they had done their research on their market and if they understood the upfront and ongoing costs of a small farm business. Ultimately, I didn’t respond because I didn’t want to rain on their parade: reality bites. I hope that those folks, with the starry eyes of the inexperienced, were able to start a small farm business and do it profitably. I really do.

But I also know, as a realist, that the scenario is not that likely: well-meaning people pour their savings into trying to make a go of it, only to run out of money and hit the wall. There is no safety net for small farms, even though we should be the food producers of the present and the future. And that means that small farmers often have to juggle off-farm work (to pay the bills) and their farm obligations. That’s the small farm reality.

When I think about who might be best-positioned to make a successful go of surviving from the income generated by their small farm, I think of retired folks, who have a consistent income; they don’t have to worry about paying all their bills, their insurance premiums, and unexpected expenses solely from the proceeds of their farm income. Small gardens may generate more than enough produce, for example, to feed a couple of people, and the extras, with homemade jams, soaps, or other value-added items, could potentially generate a nice sum from regular farmers’ market sales…to supplement retirement income.

On the flip side, though, I also realize that most retired individuals are older people who (1) may have little to no interest in running a farm as a business and (2) may not be physically capable of the strenuous work required in small farming. Years spent in desk jobs takes a toll on the body, and suddenly needing to carry 50 pound feed sacks for chickens or 40 pound buckets of water could be, in the least, difficult – or worse, injurious.

So what’s the crux of the matter? Making a decent living from the proceeds of a small farm is extremely difficult, for the myriad reasons I’ve described. As already mentioned, most small (non-inherited) farms also have off-farm income to fill the gap between the income produced by the farm and expenses generated by it and other living expenses. Significant capital is needed to start up a farm, just to purchase the land and living quarters; for basic infrastructure like animal shelters and fencing; for supplies like feed, waterers, vitamins/electrolytes/medications; for equipment like tractors, trailers, and trucks; for running power and water lines; and many more that I haven’t mentioned. When illness, predator attacks, weather phenomena, or just bad luck wipes out flocks or herds, or flattens animal shelters, many small farms don’t have insurance to help them replace the lost assets.

“Side hustles” are simply a fact of life for small farmers: finding ways to supplement their income in creative ways, like offering farm-related experiences, accommodations, farm sitting (for other farmers while they’re away), event venues (weddings and other events), horse boarding, etc.

Even hard work, creativity, flexibility, and a passion for farming are no guarantee of success (defined here as being able to pay all of your bills – thereby demonstrating to the government, for tax purposes, that you’re a “real” farmer and not just a hobby farmer – and maybe make a small profit that you can invest back into the farm). Being in the wrong market – one where customers won’t pay what you need to charge for your products or where they’re not interested in or aware of your products – will pretty much ensure failure.

And one more thing: there are no vacations. At least for us. If you’re lucky enough to have knowledgeable, trustworthy family members, friends, neighbors, or professional sitters who are willing to watch your farm animals or monitor your growing items, great. Unfortunately, they won’t care as much as you do, and they won’t know your animals they way you do. I’ve read numerous posts in poultry forums about someone taking a vacation and returning to find one or more animals have died while in a sitter’s care…including a case where a sitter failed to adequately water poultry during hot weather and another where there was apparently confusion about responsibility and, as a result, eleven chickens died because no one let them out of the coop.

Small farming is a labor of love. As things are now, the money is never going to be even decent in it, and to scale a farm up to the point of where it’s reasonably profitable isn’t something I’m willing to do because I think you lose too much when you’re too big. In addition, other “successful” farmers will tell you about how you may have to do things you don’t want to do in order to acquire and retain your customers, like selling parts of chicken rather than whole chicken (because, apparently, people don’t know how to cook a whole chicken). As a small farmer, I value being able to run my farm the way I think it should be run, and offering products that meet my high standards; the thought that I would need to compromise that to make money is repellent.

The way I choose to farm is labor-intensive and expensive. As a pasture-centered operation, it means moving animals often. I choose locally-sourced feed that I ferment and supplement with quality (expensive) treats like black oil sunflower seeds. During hatching season, I hand-turn goose eggs three times a day and mist and cool them daily. Waterfowl receive high quality nutritional yeast during their growth periods (until at least 3 months old) on their food to ensure proper development. Poop boards are scraped daily. Water is hand-carried (in 5 gallon buckets) to areas where hoses won’t reach. With all this effort, though, our animals are healthy and active. I look at the growing gaggle and flocks and feel pride: improving upon previous generations is my goal.

If you care about small farmers trying to farm in environmentally-conscious, responsible, ethical, and sustainable ways, support them by buying from them. Encourage your friends to buy from them. And, maybe – one day – small farming can be a viable way to make a living. Until then, go into small-scale farming with your eyes open, making well-reasoned and informed decisions, spending frugally and judiciously, growing slowly, viewing claims about “making a living” on some tiny bit of land with the skepticism those claims deserve, and knowing that you must be in it for more than just money.