A recent update at AgriBank stated that, “In some industries, new professionals might sit in a cubicle, draw a salary and let others figure out how to run a profitable business. In farming, however, new producers must figure out why they want to work long hours in fields, pastures or feedlots, how they can turn that effort into a steady income, and what type of farm operation they can successfully operate from one year to the next.
“Not surprisingly, that type of grit and determination can make a big difference with agricultural lenders.
“‘If a beginning farmer doesn’t show a high level of excitement for life on the farm, that will make it hard for a loan officer to say ‘yes’ to financing,’ said Gary Matteson, vice president for Young, Beginning, Small Farmer Programs and Outreach at the Farm Credit Council in Washington, D.C.”
The AgriBank update noted that, “Business plans are a routine part of the financing process for virtually any business. However, 63 percent of current producers who participated in a recent Sustainable Agriculture Research and Education (SARE) survey said they had no formal business plan when they started farming. That lapse may help explain why a majority of respondents also said they were ‘not very successful’ at maintaining profitability, managing expenses, and insuring their operations.
“In essence, the business plan outlines a strategic overview of what a beginning or young producer wants to accomplish, and why they are a good candidate for achieving those goals.”
The AgriBank update added that, “Building a solid case for operating loans or other financing can be a daunting challenge, particularly for younger producers who have little or no experience with the process. Fortunately, an array of online resources are available to help jump start the task. For example, the AgPlan tool developed by the University of Minnesota allows users to customize business plans by type of operation, and share drafts for feedback from select advisers or farm educators. The U.S. Department of Agriculture (USDA) also provides a substantial library of farm business planning resources through its New Farmers and Start2Farm websites.”
