Recently I was working at the Chippewa County dairy breakfast taking donations at the door and a guest asked, “Are there really any young farmers and how could anyone really start farming at this time?”
They made some comments about big farms and all of the doom and gloom that they had heard about farmers and farming. I didn’t get the opportunity to really respond to the comments. I spent a few days thinking about the question and the follow up statements that were made. I then read an article on the induction of Harland Danielson into the Cadott High School Hall of Honor.
Mr. Danielson had given a speech at this year’s Cadott High School graduation as part of his award acceptance. Mr. Danielson shared this thought with the graduates, “They’ve told me that experience is a much harder teacher than you’ve ever had before, because experience will give you the examinations first and the lessons afterward...”
Three major issues I see with beginning farmers are: getting experience, financial management, and access to credit. The access to credit is the easiest to address.
Just one search on the internet to usda.gov will give you a long list of credit tools available from the USDA. There are beginning farmer loans, women farmer loans, youth loans, farm ownership loans, operating loans, microloans, and farm operating loans. Some such as the down payment loans offer rates as low as 1.5% and only 5% down payment to purchase land. There are also guaranteed farm loans that can be used in cooperation with local lenders such as banks and the farm credit system.
Some credit unions also can assist with the guaranteed farm loans available with the USDA program.
Getting experience can sometimes be a barrier to successful farming experiences. Too often young people do not venture beyond their own driveway. One look at Hoard's Dairyman classified section at number of openings would suggest there are many avenues to experiences that would benefit an individual looking to begin a career as a beginning farmer.
Of course the internet can also provide a list of opportunities for experiences. There are also internships and apprenticeships available.
My suggestion is take two or more years to gain experiences before committing financially to your own business. Attempt to find experiences that allow for mentorships and guidance for the many years ahead of you.
Financial management is a major hurdle to those that want to enter ownership of a business. Get a full understanding of how to complete balance sheet and cash flows. Understand how debt and repayment impact success.
Student loan debt is a burden and often in my lending career I have turned down credit applications due to student loan debt and most often default on repayment or poor repayment history of student loan debt.
Sometimes I find it is best that young people have more guidance as they are leaving high school. Perhaps attending a technical college or the University of Wisconsin Ag short course program may be a better option than attending a college or university that may require 4 or 5 years of time and a major run up in student loan debt. It is easier to run up large amounts of student loan debt and it is very difficult to payoff student loan debt.
The second part of financial management is owning your numbers. There are many great consultants in the agricultural world. It is great to use the services of a consultant for finances and other farm management areas, but you as the business owner need to know what the numbers say and how your decisions will impact them.
Just because a checkbook has $5000 in funds available does not mean the lottery has been won. Financial planning needs to be completed and requires thought every day on every decision that is made. Each decision in the farm business impacts finances both short and long term. Skipping on inputs can hurt future income. Over purchasing of capital inputs can burden the business with large payments that may not be able to be met.
Can someone begin to farm and be successful? Can someone learn finances? Can someone learn to use the many credit tools available to them to begin farming? Can someone gain experiences that will benefit them as a business owner?
Each individual considering moving forward as a beginning farmer will need to consider each of these questions.
Bob Panzer lives and farms in Chippewa County, WI. He serves as a Land Manager for Pifer's Auction and Realty, Eau Claire, WI. He may be contacted at email@example.com.