I often get calls from individuals who have recently acquired land in the area, either through an inheritance or purchase. Their number one question is what can they do with their land. Sounds like a simple question, and I’m sure they expect a simple answer, but that simple question leads to many questions by me.
Where is the location of the property? In our northwest Michigan counties that border Lake Michigan, temperature and precipitation can vary greatly based on how far inland your property is. This affects both summer highs and winter lows, and will impact which crops you can grow. Fruit trees, for example, rely on the added frost protection provided to those areas close to the Grand Traverse Bay and Lake Michigan.
How many acres of land do you have to utilize, both forested and bare land? If you have at least 20 acres of forested land you are much more likely to be able to attract a forester that can help you develop a plan to provided sustained income from that forest. The number of bare land acres effects which crops you may be able to produce in an economically sustainable way. The cost of equipment for tilling, planting and harvesting will need to be spread over the income received from this acreage
What is currently growing, and what has historically been grown on this farm? Soil types and topography vary greatly across our counties, and we can learn from what has been successful in the past. I can give suggestions on what can work in your area, but don’t discount the lessons learned by your farming neighbors.
What are your goals both short term and long term? I often start with this question, as you will need to be passionate about whatever you choose to do with your land if you want it to be successful. Michigan has such a diversity of climates and therefore opportunities. You may be interested in growing field crops (corn, soybeans, wheat, etc.), fruits, vegetables, or raising livestock. Start with what you want to do.
Do you expect this land to provide enough income to support all your living expenses, or will it be supplemental income, or maybe only enough to pay the property taxes? Many landowners just want to see their property stay in agriculture, so they may be willing to rent it at a discounted rate to local farmers.
What’s your risk tolerance, and how much money do you have to invest? Depending on what, and how much you plan to grow or raise, agriculture requires a significant amount of capital (including cash) to start a new enterprise, and continued cash to maintain that enterprise. You may need to borrow money, and although there are programs for new/beginning farmers, these are typically loans not grants.
How much time can you invest? Like any new small business, new farmers will work long, hard hours to try to get their business started. Often times those hours are “donated” in the first few years just to get things going. In the long run those long, hard hours won’t go away, but hopefully they will provide a return.
What skills do you bring to the table? Recently I talked to an individual that brought specific skills that would help him if he chose to raise/grow certain types of livestock or crops. Maybe you have experience gained from your current job or past employment that would improve your chances of success.
How will you market what you produce? Wholesale, farm market, farmers markets, restaurants? This is often not thought through in detail. I still remember the call, early on in my career, from a gentleman that planted 10 acres of sweet corn and was calling me for places he could sell it. Before planting your first crop, or raising your first animal, spend time researching marketing opportunities. Talk to local stores, restaurants, farmers markets, etc. and discover where you could fit in and make a profit.
Finally, answers to all of these questions should find their way into your business plan. You will need this business plan, including financial projections to take to your lender, potential investors, etc. A business plan also helps to ensure that you have thought through your new proposal and have therefore helped to increase your opportunity for success.