Options for Small Acreages

John Hobbs – Ag & Rural Development University of Missouri Extension

Pineville, MO

My Small Farm What can I do with it?

No easy answers. Landowners soon find decisions get complicated

with web of details. Like any other small business, a small farm

requires long hours, commitment, risk taking, entrepreneurial spirit.

Factors to consider: 1.Farm Goals 2.Farm Resources 3.Enterprise 4.Family Resources

The major components involved in a farm enterprise decision

Farm Goals Hobby or Lifestyle Tax Deferment Supplemented or Family Income

Farm Resources Land – Soil Types and

capabilities Water- Irrigation Climate or microclimate

Enterprise • Production Technique -

conventional, organic, or sustainable

• Crops – conventional or specialty

• Marketing-wholesale or direct to consumers (farmers market, restaurants, csa’s)

• Livestock • Agri-tourism

Family Resources and Skills • Finances • Credit • Family Skills and Desires • Labor: Farming business and marketing

skills Risk-taking ability Lifestyle desires

Are Small Farms a Factor in Missouri ag industry today?

86% of farms in SW MO had sales less than $50,000

and 45% of those farms had sales of less than

$1,000

There are 1,444 farms in SW MO less than 50 acres

The average beef herd in MO is 30 head

A good foundation is key to any successful endeavor

There are six factors to consider when

looking at a new ag enterprise

P stands for profitability

R stands for resources

I represents information

M represents marketing

E stands for enthusiasm, and

R stands for risk

PRIMER Score Sheets

Profitability Circle your most likely response Cash cow…………………………………………………………………………… 10 Probably profitable- just needs a little planning……………… 8 Profitable if I can get some start-up funds………………………. 6 Profitable, but easily duplicated and limited market……….. 4 Can make a profit if all stars line up right………………………… 2 Profits unlikely, but still looks like fun………………………………. 0

Resources Circle your most likely answer Have everything I need…………………………………………………….. 10 Need a few minor low-cost items……………………………………… 8 Missing one important resource, but can acquire it at some expense……………..………………………………………………….. 6 No experience with enterprise, but can develop it in time…………………………………………………………………………………… 4 No experience and needing to acquire some major resources…………………………………………………………………………. 2 Starting from scratch………………….………………………………………. 0

PRIMER Score Sheets

Information Circle your most likely response

Production & marketing info well in hand…………………………. 10 Need to do a little homework…………………………………………….. 8 Need to do a fair amount of homework…………………………….. 6 No one has ever seen this done here before but can find info elsewhere……………………………………………………. 4 No access to computer, extension or library……………………… 2 Starting from scratch…………………………………………………………... 0

PRIMER Score Sheets

Marketing Circle your most likely response Marketing Promising, accessible markets already exist – people are begging for the product……………………………….. 10 Accessible markets but will take a little effort to develop ……………………………………………………………………… 8 New retailing or cooperative marketing will have to be developed, but still a good market……………………….. 6 It may take some time and $ to help consumers appreciate the value of this product/service…………………… 4 The market is pretty well saturated with similar products……………………………………………………………………………. 2 Selling ice cubes to Eskimos……………………………………………….. 0

PRIMER Score Sheets

Enthusiasm Circle your most likely response

I can’t sleep at night, this idea is so exciting……………………. 10 I’m excited about it but some in my family are reluctant……………………………………………………..……………………. 8 It’s as good an idea as any of the others I’ve come up with…………………………………………………………………….. 6 I could get excited but only if it works out fairly soon………………………………………………………………..…………………. 4 I’m out at the first sign of rough sailing………………………………. 2 Why do I even have to do this?....................................... 0

PRIMER Score Sheets

Risk Circle your most likely response

I’m very comfortable with the return estimates relative to the risk involved…………………………………………… 10 I’m reasonably comfortable………………………………………………. 8 Somewhat comfortable……………………………………………………… 6 It looks OK, there’s just a lot still unknown……………………… 4 I think I could make it, but there are possibilities for significant loss…………………………………………………………... 2 I’m better off buying a lotto ticket…………………………………….. 0

PRIMER Score Sheets

Score Sheet Summary

Very promising, move ahead…………………………………….48-60 Has promise but will need some work………………………38-47 Has promise and some serious hurdles. Carefully evaluate whether this is a good fit…………….28-37

What others are doing

Backyard Poultry

Backyard Layer Flock Budget (4 hens, 3 years of Income/Yield Three years1.Dozens of eggs produced 209 Doz.Price per dozen $33.Gross Income per AFlock $627Variable Cost per 4 Hens1.Housing 2502.Heat lamp,feeders, waterers 50FEED3.Chick Starter 2 bags 32Chicks 404. Layer Feed 19 bags 2666.Total Variable Costs $638

Total Cost per Dozen Eggs $3.05Labor .25 hours per day X 1095 days = 274 hours

Over three years, 200 days are needed for raising chicks and molting.Production is calculated as 895 days x 4 hens x 70% egg yield per day.

Cut Flowers

$2000-4000 gross returns per acre

U-Pick

Strawberry BudgetIncome/Yield Establishment1. Yield # Pounds per Acre 60002. Price per pound 1.53.Gross Income per Acre 9000Variable Costs per Acre1.Plants 5445 x .50 27222.Fertilizer, Lime, etc. 200Irrigation/Plastics/Fuel 6003.Pesticides 1004.Labor $10 per hour 10005.Harvesting Supplies 10006.Total Variable Costs 5622Fixed Cost per Acre1.Interest on captial investment,equipmen 2502. Taxes 303.Total Fixed Costs 280Total Costs per Acre 5902Net Returns $3,098

$3000 to 5000 gross per acre

Blackberry BBudgetIncome/Yield Establishment1. Yield # Pounds per Acre 60002. Price per pound 1.53.Gross Income per Acre 9000Variable Costs per Acre1.Plants 1452 x $4.50 65342.Fertilizer, Lime, etc. 2003.Pesticides 1004.Labor $10 per hour 10005.Harvesting Supplies 2006.Total Variable Costs 8034Fixed Cost per Acre1.Interest on captial investment,equipmen 2502. Taxes 303.Total Fixed Costs 280Total Costs per Acre 8314Net Returns $686

Bees

Honey BudgetIncome/Yield Establishment1.Yield for Ten Established Colonies 7002. Price per pound 33.Gross Income per Acre 2100Variable Costs per Acre1.Replacement Bees/Queens 2502.Parasite & Disease Control 200Sugar/Jars/Labels/Buckets 4603. Vehicle 834.Labor $10 per hour 2005.Marketing/advertising 1506.Total Variable Costs 1343Fixed Cost per Acre1.Interest on captial investment,equipment 2502. Taxes 303.Total Fixed Costs 280Total Costs per Acre 1623Net Returns $477

Roadside Stands Farmers Markets

Corn Maize

Pumpkin Patch

Corn Maze for 5 acresIncomeAdmission Fees @$7/person $35,000ParkingCorn Harvest 500 bushels $2,250Total Income $37,250Maze CostsCorn Production @ $450/Acre $2,250Maze Design and CuttingDesign costs and cutting $1,500Path Maintenance Labor $10 x 30 Hours $300Fuel $120Marketing $9,000Wristbands $200Restrooms $800Liability Insurance $1,500.00Hired Labor 900 hours @ $8.00 $7,200.00Total Expenses $21,370Net Income $15,880

Fee Hunting and Fishing

Petting Zoo’s

Goat Production

SAMPLE MEAT GOAT BUDGET by Susan Schoenian

Annual kidding You can only edit values highlighted in yellow.

HERD COMPOSITION: PRODUCTION PARAMETERS

Number of Does 30 Percent kid crop raised 150%

Number of Bucks 1 Doe replacement rate 20%

Adult death loss 5.0% Buck Replacement Rate 33%

INCOME CALCULATION: No. Head lbs./hd Net Price Unit Total Per doe

Market kids 39.0 70 $2.00 lb. $5,460 $182.00

Cull does 4.5 90 $0.75 lb. $304 $10.13

Cull bucks 0.33 170 $0.75 lb. $42 $1.40

Other income $0 $0.00

TOTAL INCOME $5,806 $193.53

OPERATING COSTS: No. Head Amt/hd Unit Cost Total Per doe

Feed costs

Hay 31 0.25 ton $90.00 $698 $23.25

Grain 31 135 Lb. $0.12 $502 $16.74

Salt and Minerals 31 12.0 Lb. $0.16 $60 $1.98

Supplemental feed for kids 45 0.0 Lb. $0.15 $0 $0.00

Pasture maintenance total acres 6.0 acre $30.00 $180 $6.00

Health program doses

Deworming (adults) 31 3 doses $1.00 $93 $3.10

Deworming (kids) 45 3 doses $0.75 $101 $3.38

CD-T booster (adults) 31 1 doses $0.50 $16 $0.52

CD-T vaccinations (kids) 31 2 doses $0.50 $31 $1.03

Other vet costs 31 head $4.00 $124 $4.13

Buck replacement 0.33 head $250.00 $83 $2.75

Bedding 31 head $3.00 $93 $3.10

Marketing and Hauling 44 head $5.00 $219 $7.31

Supplies 31 head $3.00 $93 $3.10

Additional Cost Total cost $.00 $0 $0.00

Additional Cost Total cost $0.00 $0 $0.00

Interest on operating money 5.0% Cost for 6 months $57 $1.91

TOTAL OPERATING COSTS $2,349 $78.30

Returns $115.30

Example is for herd of 100 does & 3 bucks with 170% kid crop raised; 20 doe kids retained as replacements. Purchase bucks at $300 each. Per Doe

ESTIMATED INCOME PER DOE

Kid sales

No. kids 1.5 Cwt./kid 0.7 Price/cwt. $140.00 $147.00

Cull doe sales No. does 0.16

Cwt./doe 1 Price/cwt. $55.00 $8.80

ESTIMATED TOTAL INCOME (gross receipts/doe) $155.80

ESTIMATED OPERATING COSTS PER DOE

Pasture (example is rental rate of $30/ac.) $9.00

Hay Tons/doe 0.25

Price/ton $90.00 $22.50

Grain Lbs./doe 50

Price/lb. $0.12 $6.15

Salt & minerals Lbs./doe 43

Price/lb. $0.27 $11.61

Dewormer (6 times/year) 5

Vaccinations 0.5

Marketing & hauling 10

Utilities & machinery costs 6

Livestock facility & fence repair 3 Professional fees (legal, accounting, etc.) 0.3 Miscellaneous 2

Operating interest

Rate/year 6.00% Portion of year op. costs borrowed 0.5 $2.29

Total Operating Costs Except Labor $78.60

Estimated labor cost Hours 2

Rate/hour $13.00 $26.00

Total Operating Costs Including Labor $104.60

ESTIMATED OWNERSHIP (FIXED) COSTS PER DOE

Depreciation & interest on livestock facilities & taxes $8.00 Breeding stock purchases 10.5

Total Ownership Costs $20.50

ESTIMATED TOTAL COSTS PER DOE $125.10

Income over Operating Costs $51.20

Income over Total Costs $30.70

Value Added Products

Tree and Nut Production

High Tunnel Size (sq. ft.) (30x72) 2,160 ft.Utilization 84%Approximate Original High Tunnel Cost $7,000.00

Receipts Yield (lb.) Sq. Ft. $/Lb. TotalCucumbers 567.0 454.0 $2.00 $1,134.00 1.25 $2.50Eggplant 204.1 45.0 $2.00 $408.24 4.54 $9.07Greens 166.9 363.0 $7.00 $1,168.47 0.46 $3.22Herbs 14.5 9.0 $16.00 $232.24 1.61 $25.80Lettuce 208.7 181.0 $7.00 $1,460.59 1.15 $8.07Peppers - Bell 290.3 181.0 $2.00 $580.61 1.60 $3.21Tomatoes - Slicers 1315.4 454.0 $2.50 $3,288.60 2.90 $7.24Tomatoes - Grape 342.9 127.0 $4.00 $1,371.69 2.70 $10.80

Total Receipts 1814.0 $9,644.44 $5.32

Annual Expenses Total Seeds/Transplants $135.00 Fertilizers $108.00 Miscellaneous Supplies $125.00 Water $86.40 Water Test $17.00 Irrigation Supplies $122.00

Total Annual Expenses $593.40

March - SeptemberLabor Costs Hours $/Unit Total

Bed Preparation 17.00 $12.00 $204.00 General Maintenance 23.00 $12.00 $276.00 Planting 10.50 $12.00 $126.00 Pest Management 0.00 $12.00 $0.00 Harvest 48.80 $12.00 $585.60

Total Annual Expenses 99.30 $1,191.60

Ownership Costs Annual Depreciation - Tunnel $875.00Depreciation - Plastic Cover $113.40

Total Ownership $988.40

Total Costs Tunnel $2,773.40 Per Square Foot $1.28

Annual Returns Over Total Costs Tunnel $6,871.04 Per Square Foot $3.18

Gross Per Sq. Ft.

Yield Per Sq. Ft.

Missouri Alternatives Center http://agebb.missouri.edu/mac/index.htm

Small-farm operators develop economic vitality by: • Having a passion for what they do

• Watching their cash-flow cycle

• Producing crops for small but well paying markets

• Marketing aggressively and creatively

• Understanding there is a learning curve to new enterprises

• Invest in good soils and water

• Locate near a major population on paved road

• Match work to the family’s time, desires, and abilities

• Diversifying sources of earnings, including off-farm income, to

produce a solid, year-round cash flow