Profit Ideas for Farms

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Modern farmers must operate their farms as businesses regardless of size or organization. This fact creates a dilemma whereby farmers must show a profit for their farms to remain in business. Farmers, aware of market and seasonal volatility, look for additional revenue to compensate for economic changes. The range of ideas includes vertical additions to the production process, reducing or recycling waste, capturing a ready-made market or creating a niche market.

Community Shared Agriculture

  • Community shared agriculture (CSA) is sold in shares. Each customer purchases a share giving her an account from which she can purchase produce directly from the farmer. A CSA program, such as the Donald Street Farms program, provides up to 20 weeks of fresh vegetables during the growing season. This program reduces or eliminates transportation costs, provides regular cash infusions and creates a pre-paid customer base.

Value Added Agriculture

  • Value-added agriculture is an off-farm method for farmers to gain more of the revenue from retail customers. Instead of simply growing commodities, value-added agriculture allows farmers to invest in processing and transportation of commodities for end users. Examples are processing plants turning wheat into flour, meat packing plants or transportation of milk or meats. The farmer can either invest in companies that are part of the overall food production process or they can invest in actual equipment and vertically enhance their business. Cargil, Land-o-Lakes and Bordon are examples of co-operatives that farmers can join in which they share in overall efforts to grow, ship and promote specialized products. Granges and milk co-operatives are early examples of this in which groups of farmers increased economies of scale in advertising and distribution while reducing the overall cost to each farmer.

Niche Farming

  • Raising specialized breeds of livestock, birds or domestic animals creates a profit center for farmers who become known for raising certain breeds. Alpacas, pheasants, chickens, miniature varieties of animals or specific dog or rabbit breeds are examples of niche farming. The size of the operation can encompass an entire farm or a small portion of the overall use. Animals such as alpacas and sheep create profit from wool. Goats provide specialized milk and milk products. Eggs are sold for breeding or food. Day- or month-old fowl also have a market.

Composting

  • While mainly an on-farm idea, composting increases profit by reducing overall cost and waste. Composting is a method of disposing organic waste material where piles of waste are created and allowed to break down into reusable bio-solids. Initial costs may include a feasibility study, permits and equipment costs. Effective and efficient composting requires locating available resources on site such as sawdust, peanut hulls, carcasses, paper or cardboard, manure and yard waste. These resources are used in the composting process. Added value is gained by tipping fees whereby outside material is dumped on site for a fee. Fertilizer costs are reduced from the use of composted material in planting and may be eliminated by the sale of composted fertilizer to others.

Worm Farms

  • Worm farming, also known as vermiculture, is a form of composting but uses almost no equipment and covers a range of applications. Worms used in composting material tunnel through the material creating airflow through the material. This in turn helps break down the material. Worm castings are the residual waste from worms and are full of nutrients and minerals. These castings create organic fertilizer in both solid and liquid form. Worms also help reduce waste by digesting organic material that would otherwise rot or feed mold. Worms also break down dioxins and chemicals harmful to both soil and animals. The oxygen introduced via the aeration process kills bacteria living in the material. Worm farming reduces the need for chemical additives to soil and plants while adding organic fertilizers. Added income is made from selling off both the finished compost and the worms themselves.

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