How much does it cost to get started in farming these days? There is no simple answer to this question. Your startup costs depend on many variables including the country or state where you live, the amount of land that you want, the crops and livestock you intend to keep and much more. In this article, we present information to help you determine how much it might cost you to get started in grain farming and in homesteading. Read on to learn more on how much does it cost to start a farm.
What You'll Learn Today
- What Do You Have To Start With?
- Get Your Farming Equipment Together
- How Much Does Land Cost?
- Plan For The Unexpected
- How Much Does It Cost To Start A Small Homestead?
- Remember To Include Your Storage And Packaging Costs
- How Much To Start A Smaller Homestead?
- Include Livestock Costs
- Homestead Land Is Cheaper Than Large Scale Farm Land
- There Will Be Immediate, Ongoing Expenses
- Remember To Factor In Your Water Costs
- You Have To Live Somewhere
- Put The Puzzle Pieces Together
What Do You Have To Start With?
Before you set out as a grain farmer, you’ll have to know what you’re doing. This may mean pursuing an agricultural degree which could cost you as little as $20,000 or as much as $120,000. This cost depends on which college or university you attend and what kind of financial aid you receive.
The alternative to this might be to get some experience with farming as a farm hand or an apprentice of some sort depending on what kind of opportunities come available to you. This can be a very good way to gain knowledge for homesteading.
Get Your Farming Equipment Together
Once you’ve got some experience and knowledge under your belt you’ll need to set about getting the equipment and machinery you’ll need for grain farming. You can start out by financing brand-new equipment, or you could put in some legwork and find some used machinery.
Generally speaking, well-maintained farm machinery between five and ten years old is a good value. At this age, the machines will have depreciated greatly from their new purchase price, but if they been well cared for they should still be serviceable for many years.
Here’s what you’ll need for grain farming:
- Combine with grain platform and corn head: $175,000
- Large tractor for planting and plowing: $125,000
- Miscellaneous tools: $15,000
- All-terrain vehicle: $10,000
- Grain truck: $60,000
- Sprayer: $35,000
- Grain drill: $40,000
- Field cultivator: $25,000
- Chisel plow: $30,000
- Grain cart: $15,000
- Planter: $75,000
- Trailer: $15,000
- Disk: $30,000
All in all, even buying secondhand, fully equipping a large grain farm could cost you around $715,000.
You’ll also need some buildings. A pair of metal buildings to keep your equipment in will cost around $200,000, and you’ll need some storage bins for your grain. Each one should hold about 75,000 bushels of grain and will cost about $75,000.
How Much Does Land Cost?
If you already have some land, either owned or leased, you’ll be ahead of the game. If not, purchasing your land could be very pricey venture.
For those who do not own any piece of land, the purchase might seem stressful and not an attractive process. However, with enough knowledge and preparation you will confidently make that commitment. To be prepared for purchase of farmland you need to write a checklist with consecutive steps. For example, you need to consider obtaining all permits that are required, you need to analyze your financial position and closing costs associated with the land purchase, etc.
Here are some general estimates that might apply to someone hoping to find land in one of the big grain producing states (Indiana, Illinois, Iowa, etc.) for the purpose of grain farming.
In order to farm enough grain to make a profit, you’ll need a total of at least 1500 acres. This could be all owned, or you could own part and lease part. Generally speaking, owning about 500 acres and leasing about 1000 is a good proposition.
When you choose your land, of course you’ll want to look for very good quality land that will turn a profit. You want to be able to produce about 150 bushels of corn per acre.
Generally speaking, land of this quality will cost between $7000 and $8000 an acre. This means that your 500 owned acres would cost you nearly $4 million.
With all these expenses combined, you’d be at almost $5 million start up costs, and you haven’t even bought your seed grain yet. Additionally, you’ll need to have some operating capital to be able to:
If you are planting 1500 acres in half beans and half corn, you’ll need to plan on spending about $140 per acre on beans and about $290 per acre on corn. This will mean a total operating cost of roughly $323,000.
At this point, your startup costs are well over $5 million, which may be well out of the reach of the young farmer just starting out. This is why so many corporate farms are overtaking traditional family farms.
Plan For The Unexpected
The costs we’ve outlined so far are those that you can reasonably plan for. You also have to take into account unexpected expenses and catastrophic events such as floods, droughts and tornadoes.
Additionally, some years the price you will be able to fetch for your crops may not cover your expenses. This is why attempting to start a large farming operation on your own can be such a risky business.
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How Much Does It Cost To Start A Small Homestead?
If you’re looking at starting a homestead, small farm or hobby farm, the costs are quite different. Depending on how much help you can get and what resources you have available, you may be able to start a small farm for as little as $600.
If you have as much is $10,000 to put into it, you can get off to a nice start. The amount you need to start out depends a great deal on:
1. What do you want to do?
What are you planning on doing with your small farm? If you just want a small property of half an acre or so, your startup cost will be very minimal.
It’s surprising how much you can produce on a small plot, so if you don’t have great expectations and you’re able to work steadily attaining incremental goals, you can start off small and eventually work your way up to a larger property.
2. What equipment and resources do you have on hand?
For small farming, you’ll need an array of tools. Just as with large, commercial farming you can save money when you buy secondhand. Here are some of the basic hand tools you’ll need:
- Shovel: $40
- Bed rake: $30
- Digging fork: $60
- Stir up hope: $30
- Standard rake: $35
- Wheelbarrow: $70
Unless you need heavy machinery, it is possible to outfit a small, family farm for a under $500. If you already have some tools on hand or if you know people who are willing to donate used tools or sell them to you cheaply, you can save quite a bit of money.
For family vegetable gardening, you can get by with the hand tools listed above. If you have a larger enterprise, you’ll need some heavier machinery.
There’s a great deal you can do with a high quality tractor and implements. The size and type of tractor you need will vary from one location to another and one requirement to another.
Generally speaking, a good quality tractor and full array of implements can set you back about $50,000. To learn more about choosing the right tractor, see our article.
3. Outbuildings And Greenhouses
You’ll also need some outbuildings for small homestead farming. For example you’ll need a sheltered area where you can clean and sort your produce and prepare it for market. This sort of simple shed can be built for as little as $150.
Depending on your climate, you may need a greenhouse. There are many different options for greenhouse building ranging from a couple of hundred dollars for hoop houses made with ranch panels to many hundreds of thousands of dollars for a professional set up.
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Remember To Include Your Storage And Packaging Costs
If you’re growing large amounts of produce to sell, you’ll need a place to store it and keep it fresh. It’s best to have a large walk-in cooler to keep your products fresh and market ready.
A new one could cost you as much as $1000, but you can often find very good secondhand models on offer for between $200 and $500.
In order to sell your produce, you’ll need to be able to package it up neatly, hygienically and attractively. Plastic containers can be bought in bulk if you wish to pre-package your produce.
Alternately, if you’re selling at a farmers market to package it up on the spot and sell it by the pound in paper bags. Even more thriftily, you could ask your patrons to bring their own bags.
If you are purchasing packaging, plan to set aside between $100 and $200 for this purpose.
How Much To Start A Smaller Homestead?
To determine how much you will need to save to get started on a one acre homestead, review the costs listed above and then follow up with legwork and research in your given area.
If you just want to have a one or two acre homestead for yourself, your cost will be different than those involved in setting up any kind of commercial farming venture.
Again, your cost will vary depending upon what you want from your homestead. A good balanced homestead might include this combination of animals and crops:
- An acre of well draining, fertile land is more than enough to produce food for an average family. As noted above, an acre of land can cost anywhere from $1000-$7000 depending upon where you’re buying and the quality of the land.
- A milk cow would provide milk most of the time. A good jersey milk cow will cost you between $1400 in $1800.
- A pair of dairy goat nannies would provide milk when the cow was nursing a calf or was dry. Two dairy goats will cost you between $200 and $500.
- Pigs provide meat and income from sales. The cost of pigs varies tremendously depending on the age and type of pig you purchase.
- A dozen can hens provide meat and eggs and income from sales. You can buy your hens as chicks for very little. Generally speaking laying hens can cost as little as $10.
TIP: Good manure management saves you money! All of the animals produce manure which can be composted to make excellent fertilizer for crops of all kinds. This saves you money in terms of soil amendment purchases.
Include Livestock Costs
If you plan to keep livestock, you’ll need to factor in the cost of purchase as well as feeding. Keep in mind that livestock of all sorts take quite a bit of time to care for properly. Even a small mishap with an animal can result in extremely costly veterinary bills and loss of potential income.
To maintain your animals on a one acre farm, you would want to divide your acre in half and keep half of it in grazing in half of it in crops at any given time. Access to good grass reduces the amount of money you will have to spend on feed and hay.
On the half-acre devoted to crops, you’ll want to be sure to rotate your crops seasonally for best production. Once every 4 years or so, rotate the crops to the grazing area in the grazing area to the crop area.
Manage your animals grazing by giving them specified turnout times. Don’t leave them out on the grazing area 24 7 as they will over graze the half-acre very quickly. Keep your cow, goat and pigs up in their stalls/pens most of the time, and give them a few hours a day of good grazing.
If you are a vegetarian or simply decide that you would prefer not to have and wants, you can do your 1 acre homestead in half crops and half wheat. Wheat will provide a good food crop and will act to improve the soil.
If you’re starting a hobby farm and you still have your day job, you’re probably better off dealing with plants rather than animals.
Homestead Land Is Cheaper Than Large Scale Farm Land
Before you go land shopping, you should have a clear idea of exactly what you plan to accomplish and what you’ll need. If you want to start out making a profit with your property, you could do this with half an acre but you’ll be better off with a minimum of 1 or 2 acres.
The amount you’ll need to spend to purchase 1 or 2 acres will vary from place to place. As mentioned above, high quality commercial farming land will cost between 7000 and $8000, but if you’re just looking for good property for a family farm or hobby farm, you can probably find some nice land at prices ranging from $1000-$3000 an acre.
If you don’t even have that amount to put down, you may be able to get started with a rent-to-own sort of agreement or by using a plot of land in exchange for a portion of the crops produced.
If this is your 1st time trying your hand at farming, you may be better off renting a property than buying one. When you do this, you give yourself the opportunity to give farming a try without burdening yourself with a huge commitment.
Looking for a rent-to-own agreement is a good option as it will spare you having to move your entire operation off of rented land in the future should you decide that you really want to make a life of farming.
There Will Be Immediate, Ongoing Expenses
You must also keep in mind that there will be immediate expenses you must plan for. For example, you may need to intensively amend your soil to get it ready for your first crop.
The quality of the land you have at your disposal will determine how much you’ll need to spend getting it ready to grow good crops. It’s best to start out with good soil to begin with, but this may not be possible.
Depending on what you need to do to amend your soil and make it crop ready, you may find yourself spending anywhere from $200-$2000.
Once your soil is prepared, you’ll need to purchase your seeds. Again, your cost will depend on what and how much you plan to grow. Small homestead farmers often do very well at the outset planting a variety of lettuces and salad greens and herbs.
These plants grow quickly and sell well. Your seed purchase should not be very expensive, and you should be able to make up that original outlay very easily.
TIP: It’s a good idea to grow wide variety of plants in your 1st year farming because this will give you good idea of what does well on your property and in the marketplace.
Remember To Factor In Your Water Costs
Whether you rent, lease, share crop or buy, make sure that any land you decide upon has an ample and reliable water source.
The amount it costs you to water your crops can vary greatly depending on what method you choose. You can water by hand, or you can use sprinklers or drip irrigation system. Of these 3 choices, sprinklers are the most costly in every aspect from installation to water use.
Watering by hand is an excellent cost saver, but it does take quite a bit of time, especially if you have a very large growing area.
Drip irrigation systems cost about $1000 an acre to initially install, but they save you money in both water use and man-hours with the passage of time.
If you have a very small family or hobby farm, you can simply use soaker hoses or rig your own drip irrigation system using old hoses.
You Have To Live Somewhere
You’ll also need to keep in mind any initial cost you may have for housing. If you’re young and rugged, you can save living expenses by setting up a camper, trailer or even a tent on your farm property. This will give you more money to invest in your venture.
If the property you choose already has a house on site, it will naturally cost more than vacant property. If it doesn’t, you’ll need to include the cost of the type of housing you choose whether it be tent, trailer, lunch or home, log cabin or what have you.
Put The Puzzle Pieces Together
Clearly, there is no simple answer to inquiries about the amount of money needed to start a small or large farm. Multiple variables factor into each individual situation. And yes, you could potentially start with no or very limited money as well, and go the old fashioned way.
We hope this article has provided you with some good ballpark figures and given you a good overview of the factors you’ll need to keep in mind as you prepare for your farming venture.
If you are interested in learning more about farm animal related businesses, here is how to successfully start an animal rescue farm.