It’s tough to get started in agriculture: Most young and beginning farmers and ranchers just don’t have the capital to start on their own. They may lack other resources, as well.
Landscapes asked three young producers who are featured in this issue — all with different backgrounds — for tips based on how they began. Each stressed the importance of finding a good mentor and renting land; their suggestions expand from there. We also called on two Farm Credit experts for advice.
Justin Barrett, Wetumpka, Ala.
Barrett works full time as a biosystems engineer and spends evenings and weekends raising cow-calf pairs with his father and grandfather. His wife, Jordan, helps keep the books and assists in the field. They are customers of Alabama Farm Credit.
1. Don’t quit your day job. It takes a lot of capital to start farming. You need additional income to get off on the right foot and p rovide for your family. An outside job won’t be as important as you grow and become more experienced, but it takes awhile to get established.
2. Start small. This allows you to focus on learning the details. There are a lot of things to learn, and if you expand quickly, little things slip through the cracks.
3. Be humble. The industry has been good for farmers the past few years, but times won’t always be this good. Being humble helps prepare you for any situation that comes your way.
Jimmy Chambers, Coleman, Texas
Chambers is chief executive officer of Central Texas Farm Credit. He has been with the Farm Credit System for 28 years.
4. Work for another operator. Colleges teach theory, but there’s no substitute for working with an experienced farmer or rancher. If your family doesn’t farm, seek out a successful producer you admire and work for them. Work hard and ask questions. Most farmers take pride in what they do and are happy to share their knowledge.
5. Exchange labor for equipment. If you start out by working for another farmer for a few years, you can often exchange your labor for the use of equipment when you start your own operation.
6. Get help with financing. Central Texas Farm Credit and other Farm Credit associations do what we can to support young and beginning farmers. The amount of equity or down payment we require varies, but it’s typically around 20 percent for real estate and 20 to 30 percent for cattle. Since it can be difficult for a young person to come up with that much for a down payment, Mom and Dad will sometimes co-sign the loan or pledge collateral to back it up. A government loan guarantee can also help us approve a loan that we otherwise couldn’t make.
Josh Eilers, Austin, Texas
After leaving the U.S. Army, Eilers enrolled in college and started raising Wagyu cattle, with no agricultural background and no help from family. He is now a full-time cattle producer and finances his cattle operation with Capital Farm Credit.
7. Build up some cash. I saved up during each of my military deployments. In 2010, when I bought my first herd, I was lucky; cattle prices were low due to the drought.
8. Get an education. Education opens doors. I use what I’ve learned daily — it helps me overcome some of the barriers to entering the livestock industry. College is expensive, but will pay for itself over the long run.
9. Work hard and take pride in your work. My military service instilled the fundamentals of hard work and discipline. The Rangers taught me to take pride in everything I do, whether it’s taking out the trash or representing our country in combat. Today I apply these values to the ranch. I’m proud to produce the beef that bears my Ranger Cattle logo.
10. Contact Farm Credit. When I decided to start the farm-to-table side of Ranger Cattle, Capital Farm Credit came through. They’re always looking to help young and beginning farmers; it’s part of their mission. They understand the market and the struggles of starting an agriculture operation. The best way to find out about programs to help beginning farmers is through your Farm Credit association.
Dustin Morris, Rayville, La.
Morris farms full time on his own and comes from a farm family. Louisiana Farm Bureau named him and his wife, Ashley, its top Young Farmer and Rancher couple for 2015. The couple also was selected for the 2014 Farm Credit Young Leaders program. Louisiana Land Bank finances their corn and soybean operation.
11. Find a mentor. Working with a successful farmer gives you a vision of what’s possible. One gave me some innovative ideas for irrigating corn and soybeans.
12. Commit for the long term. Farming is an emotional roller coaster from one day to the next and from year to year. It takes commitment.
13. Learn from your mistakes. I’ve probably made more mistakes than good decisions — things like picking the wrong variety for a particular field, or choosing the wrong planting depth. I just try to correct my mistakes next time.
14. Network. I went to Mississippi State University, about four hours from home, and commuted home to farm on weekends, vacations and summers to earn my way through college. I still count on the people I met there — I can pick up the phone and ask things like, “Have you tried this piece of equipment?” I continue to find ways to expand my network.
Ted Murkerson, Ridgeland, Miss.
Murkerson has been chief credit officer for Southern AgCredit since 2008. He has been with the Farm Credit System for 17 years.
15. Rent land. For beginning farmers who aren’t fortunate enough to farm family real estate, it is a good business practice to rent for a few years until you can afford to purchase your own land.
16. Borrow equipment. Many young and beginning farmers live and work on the family farm. This provides the perfect opportunity to borrow equipment from family until they are able to acquire their own. Even after starting their own operations, most continue to work on the family farm, which provides a gateway to barter their time for the use of equipment. This significantly reduces the expense of leasing and purchasing equipment — a win-win for all.
17. Develop a business plan and budget. At Southern AgCredit, we do our best to support young, beginning, small and minority farmers to ensure a strong agricultural community in the future. We don’t require that you own real estate or have a great deal of equity in your operation to obtain a loan — typically young and beginning farmers don’t. We do expect you to have a well-thought-out business plan and budget; this allows us to help you reach your income goals. In addition, we typically seek credit enhancements such as a loan guarantee or co-signer to lessen risk for the association and its stockholders.