Episode 3: Bright Beginnings: How to Start a Farm

Allison Beichner, AgChoice loan officer, highlights her perspective for beginning farms that will help now and in the future. She shares advice for beginning farmers and outlines steps to get started. 

Transcript

Iris:

Welcome to the AgBiz Cast, where we share inspiring stories of young, beginning and small farmers. Listen to hear from our Ag masters graduates about their farming, operations and advice for those looking to start their own business. 

Raechel:

My name is Raechel Sattazahn and with me today is Allison Beichner, loan officer with AgChoice Farm Credit. In this episode, Allison will share advice for beginning farmers and how to get started. Allison, thanks for joining me today.

Allison:

Yeah, you're welcome, Raechel.

Raechel:

So Allison, I know you've been involved in agriculture your entire life, and you now serve as a loan officer where you help many beginning farmers get started. What excites you the most about the future of agriculture?

Allison:

In a time where our agricultural markets can be so volatile, sometimes it's tough to find the silver lining and figure out what's the positive direction agriculture is going. And for me, one of the experiences has honestly been in my own personal life. So I have been involved in agriculture for quite a while. I actually joked and said, if I wasn't an agriculture, I probably would have gone into music, but thankfully my high school didn't have that great of a music program, but our 4-H was really strong in our county.

Allison:

So here I am an agriculture, but I grew up on a part-time farm. So my dad was actually an electrical engineer, which gave me a little bit of a different insight because he had some more of a techie side to him. And then it turned in that I married an Ag and biological engineering major. And he worked for [inaudible 00:01:38] about six years before we returned back to our home farm here in Northwestern, Pennsylvania. We're not quite as technologically advanced, I think, as he would like, but his opportunities at [inaudible 00:01:51] give him a really unique background in kind of being about three years forward in the advances of technology. So what's just coming out now was being developed when he was working at Case New Holland testing combines. And I think we're going to see a lot more of that in agriculture.

Allison:

I think we're going to see a lot more people that have left the family farm, gone and worked in industry, got a lot of knowledge and they're coming back and starting to implement some of those changes in their home farms. And I think what that's going to mean is a bigger spread between our margin for profits. So employing the use of technology to better drill down on fertilizer application or insecticide application, being able to have that on demand measurement as to what we're going to need to grow the crops we need or to grow the best animal. I think we're going to see a lot of that employed. The other thing I think we're going to see that kind of excites me is more people with an interest in agriculture that haven't necessarily been interested before. So I think you're seeing a lot of people in part-time farming that might be in the tech sector that have kind of found out about some of these technologies and have a part-time farm.

Allison:

And they're actually really contributing to what we're doing on a daily basis as full-time farmers. So I think what excites me the most, for sure, it's going to be the technology and how it's used going forward in the future of agriculture.

Raechel:

Thanks Allison. Great insights there. So starting a farm can be daunting. What advice do you have for beginning farmers to get on the right path for future success?

Allison:

First and foremost, Raechel, I recommend the beginning farmer gets connected to others. In some cases, the beginning farmer may be part of a family operation already, so they already have a network even. So I encourage all beginning farmers to find a mentor. It doesn't need to be anything formal, just a relationship with someone else, perhaps another farmer in the area for the beginning of farmer to learn from and bounce ideas off of.

Allison:

I know when we returned home, my husband had been disconnected from the Ag community in our area for quite some time, but one of our local larger farmer's kind of connected with him sharing that tech interest. And the two of them have really hit it off. They go to a lot of different conferences together and I would kind of consider that farmer as a mentor to my husband and someone that we enjoy learning from. And he enjoys teaching us. If the beginning farmer doesn't have farming experience, getting experience is also critical. In addition to learning the ins and outs of how to grow crops, to raise animals, get experience with the business side of farming too. Start a single enterprise. Learn how to plan and use resources and assess the outcome. This is really critical as you start your farming career. A lot of people just dive right into it without actually drilling down and seeing how the outcome's going to affect them.

Allison:

Next, I like to tell beginning farmers to save money. Farming is a cyclical industry and upfront financial needs each year to get a crop planted or animals purchased. Learning the discipline of saving for specific future goals, such as renting your first piece of ground is good training for the seasonality of farming cashflow. For lenders, proving that you can pull together adequate capital is a key step in instilling trust that you will be able to adjust your lifestyle to accommodate the demands of agriculture and ultimately repay any funds you borrow. It's really interesting that we bring up this point today. I actually had the same conversation with a part-time farmer yesterday who presented a business plan to me that it looked really rosy whenever he read through it. But I found a few key missing points that he had kind of forgot about.

Allison:

So we sat down and we discussed kind of the transition from just being a part-time farmer to a full-time farmer and the goals he needed to meet in order to get from point A to point B, so it's important. Sometimes you just have to dip your toe in the water and not jump in head first, but plan the whole time you're dipping your toe in so that you can eventually jump in. Finally, the beginning farmer should outline a business plan. A business plan demonstrates that you know what you're getting into, including understanding the time, budget, and resources you'll need. For beginning farmers, simply outlining the business plan is a good place to start with the expectation that you'll fill in any blanks as you learn more. As part of your business plan, develop a cash flow budget, showing anticipated income expenses. A business plan with cashflow budget will help others, including lenders and your family feel confident in supporting you.

Raechel:

Great information. Thanks Alison. So are there any other thoughts you'd like to share with our listeners on this topic?

Allison:

Sure. One program that I really encourage my beginning farmers to consider is our AgBiz Masters program. AgBiz Masters is a learning series for young and beginning farmers that covers business and financial management topics. Registration is currently open for the program that will be held this winter and will include online modules and live webinars. You can learn more on register agbizmasters.com. In addition to the AgBiz Masters program, I also like to let our young and beginning farmers know that our accounting record and tax keeping as well as business management services can really be valuable assets and tools to help our young beginning and small farmers get started, whether it be improving on those record keeping skills that AgBiz Masters kind of sets the sound foundation for or helping with that business plan that AgBiz Masters also helps you set the foundation for.

Allison:

Both our art and BMS teams have the ability and the professional help that a young and beginning farmer oftentimes seeks. There's also some additional benefits that may be offered to some of our YBS customers depending on their eligibility. Another area I like to highlight is some of our program partners that have helped us put AgBiz Masters on the map and get us as far as we have in the program, so that would be our extension educators. So reaching out to our local extension office to maybe an extension educator that specializes in either grow crop farming, agronomy, maybe livestock, and having them help and mentor can often times be a very valuable resource as you're kind of starting your toolkit as a young and beginning farmer. Another organization to look into the often times has small and beginning farmer programs is the Farm Service Agency.

Allison:

They're a division of the U.S. Department of Agriculture, and they can also often times have some funding sources and be able to supply some funding or security for loans or lenders such as AgChoice Farm Credit. The other one I like to mention too, is our small business development center. They have the ability and the access to some free legal help when businesses are starting to establish an entity or determine which way is going to be best for them to set up their entity to move forward in their business. The last one I wanted to highlight, but not necessarily forget about is our industry and cooperative partners. Oftentimes you can find young beginning farmer programs through your cooperatives that you may work with, whether that be a cooperative that supplies you with your fertilizer, chemical and seed needs or cooperatives that you may ship your products to, such as Land O'Lakes.

Allison:

Our family is a member of the Land O'Lakes cooperative. And we have friends down in Franklin County that are as well. And they told us about a program for young and beginning producers to help to establish leadership skills and allows the producers to kind of grow in their management of the dairy and nut farm. Another one to recommend too would be Pennsylvania's Sustainable Agriculture Association's mentor program, where they actually connect you with mentors that specialize in certain fields that you may be interested in for maybe a year or two year apprenticeships so you can gain some additional knowledge. All of these programs can be vital tools in the toolbox for a young and beginning small farmer, but I think it's really up to you to determine which one's going to best fit your situation.

Raechel:

Allison, thanks so much for joining me on the podcast today and sharing your perspective to help beginning farmers today and in the future.

Allison:

You're welcome. I'm happy to give my advice.

Iris:

Thank you for listening to the AgBiz Cast. To learn more about the AgBiz Masters program, visit agbizmasters.com or check out our Facebook page. Tune in every two weeks to hear more stories from our graduates and partners. Thanks for listening.