Financial Planning for a Compact Farm

Follow these financial tips to successfully plan and manage your own compact farm.

| January 2018

  • Compact farm
    Every farm is different when it comes to financial planning and budgeting.
    Photo by Getty Images/aluxum
  • Compact farms
    "Compact Farms" by Josh Volk looks at a variety of successful farms with less than 5 acres of production and provides materials and advice for readers to plan their own.
    Cover courtesy Storey Publishing

  • Compact farm
  • Compact farms

Compact Farms: 15 Proven Plans for Market Farms on 5 Acres or Less (Storey Publishing, 2017), by Josh Volk provides tips and resources to help readers get started planning their own compact farm. The book takes a look at 15 different farm profiles on five acres of land or less, and offers a planning section, financial section, and appendixes with additional resources. The following excerpt is from Part 3, “Nuts and Bolts.”

Buy this book from the GRIT store: Compact Farms

Making It Work Financially

Farming is fairly universally considered to be a low-paid profession. This is especially true of farming on a small scale, but the big guys don’t necessarily make a lot either. Most folks know this when they get into it; they are in the farming profession for a love of the work more than for the paycheck. Even though no one is raking in millions by starting a compact farm, many people operating them live comfortable, happy lives.

Money, specifically personal or private business finance, is not a topic many people feel comfortable discussing. When I first became interested in farming, I looked for books and reports that would give me some sense of the actual numbers behind a farm business. I didn’t find any. Over the years, as I’ve worked for a number of farms and seen some of the financial numbers, I’ve realized it is difficult to put a single number on how much a farm will make per acre, or what the one best crop will be for a particular farm, or even how to set prices high enough to make a living and low enough that people will still buy the produce. I asked the farmers profiled in this book about their financials and a few were willing to share some numbers with me, but most did not want to make those numbers public. I will address the subject in a general way to give you, the reader, a jumping-off point as you imagine what is possible for your own compact farm. In this chapter, I define some basic business vocabulary and offer a framework for achieving a better understanding of those terms and the numbers.

A few compact farm operators (myself included) have put out actual numbers from their farms, so I’ll refer to those. There are two excellent books on the business side of small farms that have been published in the past few years and I recommend them for anyone wanting to learn more.

The Organic Farmer’s Business Handbook by Richard Wiswall takes a look at Wiswall’s own small farm in Vermont, with details on how he runs the business side of his operation. The Midwest Organic and Sustainable Education Service (MOSES) put out Fearless Farm Finances, an overview with profiles of different kinds of farms.

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