How to increase income from your farm

“The farmer has to be an optimist or he wouldn’t still be a farmer.”

– Will Rogers

“Agriculture is the most healthful, most useful and most noble employment of man.”

– George Washington

Agriculture goes to the heart of what allowed humanity to build civilizations: the production of food from land. As noble a pursuit as it is, we can be sure that George Washington would not have disagreed with Will Rogers about farmers being optimists. Each year brings new challenges for farmers, with the potential for weather, commodity prices and labor availability to wreak havoc on farm income.

1. Diversifying your Crops

   Some crops are more profitable than others, although higher value add products (such as berries and melons, for example) come with greater upfront investment and more labor than easier to grow grains such as wheat and corn. Allocating a portion of your land to livestock can yield a source of income that is less correlated with other agricultural products. Beyond crop rotation, diversifying your crops can mean everything from planting different families of the same crop, to adding conservation buffers around your plots to increase genetic diversity. Such practices can reduce the need for pesticides to fight pests, and so come with environmental benefits in addition to the saved cost of applying dangerous chemicals. Buckwheat, for example, has triple the value of corn and is used for noodles, bread and cereals.

2. Sustainable or Organic Farming

Demand for organic farming continues to grow, and the much higher cost of organic products presents an opportunity for farmers, since there are plenty of people willing to pay a premium for organic products. Landowners who want to make more money through organic products must become organically certified, and this is strictly defined by the USDA, who sets production standards for organic food. Natural methods of farming must be used for pest and weed control, with no or very limited use of only certain chemicals. Cropland can only be used to produce organic food if it has been managed organically for 3 years.

Some farmers have even gone so far as to combine organic food production with onsite solar energy (“agrivoltaics”), achieving sustainability in multiple ways. If you are interested in combining renewable energy production with your farm, contact us to learn more about solar energy and how it can be effectively combined with farming.

3.      Sell directly to consumers through Pick Your Own (PYO)

When food is sold in a supermarket, most of the profit it produces goes towards the wholesalers, processors or retailers, and very little is left for the farmer who actually produced it – only 14.5 cents for every dollar Americans spend on food. There is no doubt that the various businesses who transport, process and prepare food for final consumption add value – but the portion of profit for the farmer keeps declining, as businesses create more complex and processed foods and gain tighter control over food distribution and sales.
Fortunately, there is one way that farmers can fight back: sell directly to final consumers through Pick Your Own (aka Choose Your Own or U-Pick). Farmers can reduce their labor and equipment costs, sell produce that might be too ugly for supermarkets, and help create fun memories for visitors – all while keeping the entire profits from the products they grow.
As attractive as this sounds, farmers who opt for Pick Your Own must also take care of a lot of things that food distributors normally do for them, and have the right conditions for PYO. The following all need to apply:

• Accessible location: your farm must be close enough to population centers to be an attractive location for a weekend picking expedition by families who might have screaming children in the car, or who are tired from their weekly commute. The closer you are to a population center, the better.

• Marketing: selling to food distributors is certainly simpler. For a successful Pick Your Own operation, you’ll need to promote yourself across the right channels, including: word of mouth, road signs, social media, listings in tourism directories and any partnership that can help gain visibility. You’ll be competing both with other PYOs and with supermarkets.

• Liability: a normal farm has few workers who have learned to handle machinery and even then, accidents can happen and safety can always be improved. A PYO farm may have hundreds of farming inexperienced patrons, many of whom are children. The last thing on their minds is how to avoid being run over by a tractor. It is your responsibility as the farm owner to ensure that no harm ever comes to your patrons, and that you have adequate insurance coverage.

• Crop damage: hungry patrons that visit your farm don’t know how to handle farm products, and will inevitably damage some of the plants. They know they won’t get in trouble if they or their young children leave behind a trail of destruction.

• Product type: if you grow wheat or barley on your farm, you will need to think about planting other crops that are more attractive to people for picking. In the spring and summer, peaches, strawberries, raspberries and other berries are great options, and tasty autumn products are apples, pears, pumpkins and grapes. Some PYO operations make it into the winter by planting Christmas trees.

• Facilities for customers: a PYO farm needs space to allow patrons to park their cars and a checkout area needs to be created. Extra help from additional staff will be needed, especially on busy weekends and holidays.

Despite the extra investment, many PYO farms are very successful and have found a great way to avoid giving up most of the profits from their products to middlemen, food processors and retailers. If you run a PYO farm and want to show off your green credentials, consider contacting us to help you include onsite solar in your farm in a way that fits into your farming operations. You will be able to set the conditions of any solar project that could be built on your land, even if an external investor finances it.

4. Open an Agritourism or Farm Stay

For city people, farms can be special places that allow an exciting excursion and escape from their busy lives. Farm stays are the perfect way for farmers to earn money while providing a valuable experience to guests from near and far. While some farms have become resorts, most don’t need to go this far: you can start by leasing out rooms for overnight farm stays on Airbnb or VRBO.

5. Organize Field Trips for Schools

Schools love to take kids to see farms, and if you can turn your farm into a show on how agriculture works, it will be a great learning experience for the next generation. This requires a bit of preparation, and is unlikely to yield a lot of extra income, can be a good way to increase your farm’s visibility, especially if you are also running a PYO operation. If you include solar panels on your farm, you will be able to show how renewable energy can help your farm be both sustainable and also save money. Contact us for advice on solar energy.

6. Sell byproducts

Farms often produce some pretty nasty byproducts, such as animal dung and crop residue. Fortunately, there are many ways to use byproducts, some of which can even create an additional income stream for your farming operation, although they may require some upfront investment.

• Plant byproducts: Around 40% of animal feed is derived from byproducts. When soybean oil is extracted, leftover soybean meal is a tasty meal for cows. Byproducts from distilling grains to create ethanol can also be used for animal feed.

• Create biogas: If your farm produces large amounts of animal manure and plant waste, you may want to consider installing an anaerobic biodigester to turn this waste into valuable biogas. The EPA recommends having at least 500 head of cattle or 2000 hogs for biogas production to be economically attractive. You will also need to create a use case for the produced biogas, which can be used to fuel onsite boilers or gas engines to produce electricity for internal use or to sell into the grid. Although most of our projects involve solar energy, we also have experience with biogas, and you can contact us to learn more about your options.

• Sell animal waste for fertilizer: Biogas production can be a great project, but is quite complicated and involves a lot of upfront investment. An easier way to use animal manure is to apply it directly as fertilizer. There is even an online manure value calculator that can help you understand its value.

If you want to look beyond farming, contact us to learn about solar and help you obtain an offer to lease your land from the developers within our network.

LEARN MORE

How valuable is my land? How to negotiate a solar lease

How can I make money from my land? Grid interconnections needed for solar

Leasing my land: Oil, wind or solar? Or all of the above?

Texas land use past and present: how solar fits in

Case Study: A Texas Landowner who found a solar lease that allowed him to retire