Eighty-eight percent of the farms in the U.S. are family farms, and it’s no secret that in recent years smaller agricultural businesses are seeing decreases in their bottom lines due to factors such as higher input costs, farm product price fluctuation and the advent of large-scale, corporate, industrial farming. It’s not for a lack of hard work. Most income reported by small farmers and ranchers also includes part-time, off-farm work.
At FarmRaise, our mission is to help the average grower increase their profitability, offering resources to organize and audit their expenses. Ultimately, we find that adopting sustainability practices and protecting on-farm natural resources can lead to higher profitability. But adopting those practices can take time, money and effort. That’s why we also connect producers to funding opportunities through our Farm Funding Library.
But what can small farmers do in the meantime to increase their sources of income, diversifying the operation and earning additional income? Check out our list of ways to make money and diversify your income stream. Consider adding them to your farm business plan!
In this post, we’ll cover the following ways for farm operations to earn extra income:
Before we get started with how you can maximize your farm’s income generating capabilities, you’ll need to be prepared to keep track of your side jobs.
When you develop a new stream of income, you also incur a new stream of expenses. It’s important that you keep track of those for tax purposes and to help you audit and reduce costs. There aren’t a lot of tools out there to help you do that, so that’s why we built one. Check out our farm bookkeeping app, FarmRaise Tracks.
FarmRaise Tracks will help you itemize each of your expenses by farm tax categories. It can even divide your expenses into categories based on the products and services you’re offering.
Whether you’re in a rural area or an urban farmer, there’s a lot of love out there for farm culture. Small and family farms make for fun, interesting stays for travelers. Consider adding farm stays to your farm management plan.
Do you have a barn or guest house that’s suited for guests? Rent it out! If you have space on your land to build, consider investing in a tiny house or cabins for overnight church or school camps. If the startup cost for both of those options is out of reach, there are lower cost options as well. Platforms like Hipcamp allow farmers to rent our their land to guests who’d like to camp on your property. This is what we call passive income - it requires minimal effort on your part and allows you to focus on farming full-time.
Survey your land, get to know the needs of people in your community and see where you can fill in gaps in demand. Maybe your operation is perfect as a wedding venue - especially if your operation is a hobby farm. Your farm has the opportunity to create a unique aesthetic for people planning weddings or businesses hosting team-bonding or field day events.
With the average U.S. wedding costing a whopping $30,000, it’s no surprise that weddings are a $60 billion industry. There are two million couples who get hitched each year, and there is high demand for outdoor and barn weddings in rural areas. Weddings might just offer an opportunity for a lucrative secondary source of income for your farm.
Converting a portion of your farm, ranch, barn, winery/vineyard or orchard into a wedding or camping space doesn't happen overnight. It requires time, investment, communication and significant attention to the safety of both your farm and the those involved in the event. Here are some tips to make it more feasible.
Investment in agritourism is trending! Good news for farmers who want to diversify their income. But startup costs can be high and there are grants out there to help you get started. Where can you find them?
FarmRaise Premium Members receive weekly funding alerts that offer announcements and deadline reminders for agritourism grants like the Multi-Business Agritourism Grant Program.
You can also boost your income diversification by not putting all of your eggs in the same basket. That means putting on your entrepreneur hat and finding new markets to sell your products.
Pick Your Own operations (also known as U-Pick, Cut-Your-Own, or "Choose-Your-Own") are farms where customers pick, cut or hand-select their own produce out of the field. If you're looking for a direct marketing choice for your farm, this is a good one - especially for all you berry, tree fruit, pumpkin and Christmas trees producers out there.
Weigh the pros and cons. If you decide a POY is right for you, we have a few tips to help you get started.
Advantages of POY farms:
Disadvantages of POY farms may include:
If you think a POY plan is right for your farm, check out this list of key tips to get you started.
PYOs often sell fruits and vegetables that are designated as "specialty crops.” FarmRaise Premium Members receive weekly funding alerts for federal, state and private grants. We give you deadline reminders for grants like the Specialty Crop Block Grant Program.
Getting the community involved not only helps you strengthen your income, but it helps you strengthen community ties. There are two important ways you might consider selling your products within your community.
Better known as “co-ops,” agricultural cooperatives are mutually-owned businesses. Members pool their resources and work together to achieve a common goal. In this case, it would likely be selling farm fresh food.
Co-ops can help you access markets, pool resources and sharing knowledge among farmers and enthusiasts in your community. Here are some steps that farmers can take to start a co-op:
Co-ops offer a lot of freedom, but they’re also a heavy lift to get started and sometimes to maintain as well. Consider a CSA which may be better suited for your operation.
Community Supported Agriculture (CSA) is a production and marketing model where customers purchase shares of a farm’s harvest to make sure they receive farm-raised products throughout the growing season.
Think of it as a pie. CSA members help you purchase the ingredients. You do the baking and when the pie's done, they get a slice proportional to the amount they contributed. Purchasing a share is generally done with a one-time annual payment or through incremental installments.
CSA shares can offer you upfront funds during the start of the growing season and also helps free you from time-demanding tasks like marketing your products. CSAs can offer a variety of vegetables, fruits, herbs, meats, eggs, dairy, cut flowers and value-added products.
CSAs can also be beneficial for customers looking to better understand and invest in where their food comes from and who works hard to produce it. Like all new farm ventures, getting your CSA off the ground takes planning and careful consideration.
But before you get started, take a look at our abbreviated CSA roadmap:
For more information, the NC State Extension offers a detailed CSA resource guide for farmers. The USDA-National Agricultural Library also offers a comprehensive list of resources related to structuring a CSA business.
As a farmer, you know how much goes into producing just one unit of produce. Few people can value good food like farmers and ranchers - except for great chefs.
Chefs and restauranteurs tend to understand the value of well-produced and highly quality produce. They tend to be more willing to pay a fair price and they tend to be more understanding of the seasonality and other variables that can lead to changes in production schedules.
By working with local restaurants you can establish a strong relationship with your chef customer and may even find yourself growing produce you didn’t know existed.
See how this farm collaborative is partnering with renown chefs and what lessons you can apply to your operation.
Farmers’ markets are well-known ways for small-scale farmers to sell their products directly to consumers. But they’re also quite difficult to pull off. Consider the costs of transporting your products, refrigerating them if necessary, setting up a booth and deciding what to do with unsold products.
Despite these considerations, there are some invaluable positives farmers’ markets can offer. At a farmers’ market, you can interact directly with customers helping them understand more about agriculture today, earning word of mouth referrals, boosting followers to your social media accounts and learning feedback that can inform your advertising strategy. Not to mention, you’ll also be able to interact with producers and entrepreneurs in your area, making connections that will strengthen your network - personally and professionally.
What’s more? There’s funding to help you join a farmers’ market.
All of the above options can help add value to your farm’s products. Did you know there’s a USDA grant for that? It’s called the Value-Added Producer Grant and it offers up to $750,000 to help farmers expand their market share. Learn the details in our guide to VAPG.
One thing that never goes out of style: learning. There’s a wealth of people out there who have a strong desire to learn from your operation. Here are a few ideas you can tap into:
Partner with schools within a few hour radius, inviting them to bring students to your operation for a day or weekend filled with farm education. There’s something for every grade level to learn. Here are some examples:
Middle and High School
College and Beyond
Whether you’re educating fellow farmers or people who have never step foot on a farm, you can get creative with what you teach. Offer courses in what you specialize in. You may get some extra help around the farm, put some money in your pocket and spread your agricultural knowledge.
We mentioned SARE grants previously in the Community Supported Agriculture section. You can also use SARE grants to teach others in your community about your farming methods. Search the SARE Grant Management System to get inspiration for farm education projects you might take on to diversify your income.
When the layperson thinks of a farm, they may think of large-scale, industrial operations that focus only on soybean and wheat production. But what they may not realize is that smaller farms and ranches can have a strong diversity of products. So be sure to take advantage!
You might have the opportunity to earn some extra cash for your excess manure. Here's how:
These manure-selling tactics can also work for other farm byproducts like selling hay. Take stock of what byproducts you’re throwing away that may be repurposed and sold.
The Ugly Food Movement alive and well. More and more, consumers are looking to support their local producers and decrease their negative environmental impact. That may offer you the opportunity to sell your “ugly foods” or the produce that doesn't look as beautiful as the kind you’d see displayed at Whole Foods, but tastes just the same and offers the same nutritional benefits.
Don’t throw that produce away! You may be able to partner with companies like Misfit Market and supply them with your ugly food.
Lean into the “ugly food” label. If you’re selling your produce direct to consumers, encourage them to support your farm and reduce food waste by marketing your imperfect or misshapen produce as “ugly food.”
Almost every farm or ranch operation has some real estate that isn’t used for production purposes. Consider using that land to spruce up the farm and create habitats for natural pollinators by planting regional flowers.
You can sell those flowers as a way to diversify your product offerings. Think of them as the candy sold at checkout counters in grocery stores - you can offer it to your farmers’ market customers, chef partners and agritourists along with the product or service they originally solicited from you.
You may also be eligible for funding to plant flowers on your operation. Since the USDA prioritizes regenerative agriculture, you may be able to receive a grant for planting flowers according to your region. Bring some color to your farm, diversity to your operation and boost native bee populations by planting native flowers! You may even notice that the wild pollinators you bring to your operation will pollinate crops that your average honey bee. This could lead to higher yields. Sounds like a win-win doesn’t it?
One way to increase your income is to show off the quality of your products. Consider adopting organic produce. The organic foods industry is worth $60 billion, and it may be worth investing in transitioning part of your farm to organic. You may receive a premium for your produce. Read our guide to the pros and cons of organic farming and how to get funding to make the transition to organic farming.
You can also boost your value proposition, increase your yield and mitigate the effects climate change by adopting new technologies through practices like precision agriculture. Experimental and regenerative practices can also make you a competitive applicant for USDA funding. You can highlight your production methods in your marketing and set yourself apart from other farm wedding venues, co-ops, farm stays and other businesses that market directly to consumers.
We all know farming is hard work. And these days, it takes more than selling one product to stay afloat. If you want to avoid the lenders, find ways to diversify your farm income and don't rely on one revenue stream to feed your family.
Let FarmRaise help you in that journey. Our Farmer Success Team is dedicated to understanding farmers’ need and helping their operations reach profitability. See how FarmRaise works and get support to make your farm, ranch or forestland prosper.
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