Farming homestead business plan...

Hey Folks. This is my first post, so bare with me a bit.

I've listened to all of Pauls podcasts. I've read Sepp's Permies book. I have dreamed of moving to a rural area to make a homestead go of it.

As an engineer, I like to run numbers. I like Paul's statement that he wants to make $200K/year doing permaculture. Then he tosses out a bunch of ideas on how money can be made as a farmer...

I was thinking the other day, "What amount of money would I have to make on the farm where my income would seem to actually increase from where I am now?" I decided that I liked the number $120,000 since it is easily divisible by 12, and amounts to $10k/month

Next, I asked the question: "How many families food bills does it take to make $10K/month?"

I estimate that it would take at least 12 families of 4 to make up such an income.
Next: what do I need to raise/sell to feed 12 families over a year?

I came up with numbers like
3000lbs of dressed beef.
500 chickens
800 lbs of dressed out pork
500 lbs of fish
650 dz eggs
1000 lbs of nuts.
7000 lbs of fruit
1000 lbs of grapes
2000 lettuces
4000 carrots
1500 onions
200 lbs of honey
3000 lbs of various veggies like beans, turnips etc.
800 lbs of potatos
250 lbs of herbs
250 lbs of mushrooms
... and more
Plus some extra income:
10000 BF of hard wood lumber
1000 bars of homemade soap
600 jars of jam/preserves
1000 jars of

and so on...
Those are big numbers.

Clearly, I will need to build up to this level of production over time. I will need to invest in the land first, and then towards the production.
But after the swales are in, the clover/vetch/alfalfa are growing, and a certain level of sustainability and reproducability is going, how much time does it take to produce 3000 lbs of beef?
Assumming a mini cattle breed weighing 750 lbs on average, 62% dressed out weight, that is almost seven cattle. I don't know for a fact, but I expect that it takes about 8 hours to butcher one cow. I'm just guessing here. In addition, running the cattle semi wild like Sepp does, might mean about seven hours more per cow, for a total of 15 hours per cow.
That comes out fo a 105 hours total on production of 3000 lbs of beef. Now organic beef in my neck of the woods goes for $4 for ground, $6 for any of the good parts.
Or, $5/average. So for 105 hours of work, I can produce $15,000 worth of income. This comes to a measly $142/hour.

My inputs: land probably 2 acres per cow, plus I need 2 acres for the mommy cows, which I need at least 7 cows, 1 bull. Herd size of 15 total, so 30 acres needed.
Feed: Properly planted 30 acres none to minimal extra feed costs:
vet care: Maybe a visit or two? Not sure what the price is for a big animal vet visit. Call it $800.

See where I am going with this? Then, plan the business until you meet the objective: In my case $120K/year.

What I see as obstacles are that it all involves an investment up front. Even if I can pay cash for the land, I have to survive and make a living for at least 4 years before I can hope to make anything more than peanuts.

I did this for about twenty five different products. I estimated, that is a perfect world, there would be about $75/hour production income, or 1600 hours work. This does not include the time to package it, box it up and sell it all, but it is a starting point.

Then, there is the problem with marketing the product, much less selling it. It would be hard to sell enough produce at the farmer's market to make $2500 a week. Maybe a CSA??? Not sure. Probably a combo.

Current plan: Buy the property. pay cash for it. Spend vacations and long weekends on property sowing cover crops & N-Fixers, Creating swales and terraces, planting the fruities, while continuing to live in the city making a wage. At no point will I borrow money to make improvements, but I currently have the assets and income available to pay for most all of them over a ten year period.
Then, when the fruit trees and the soil fertility is there, start shifting the living situation to be more at the homestead. Oh, I have to build a home too:-)

I am sure that my plan is going to be an utter failure, but I need some of you to tell me why it is an utter failure.

Thanks,
rich

i am not an expert, so take all this with a grain of salt.....

we have our land and are in process of designing and implementing. this takes LOTS of time. you will probably need more than vacations and long weekends to prepare any decent sized acreage for farming. you will also need access to heavy equipment, which is expensive to rent...... and more expensive to pay some to do for you.

that being said, once you've overcome all the hurdles of starting a successful rural business, youre biggest priority will be marketing. whats the use of growing things you cant sell. most larger market farmers here attend multiple farmers markets,  have csa's, and sell some wholesale. this is also LOTS of work. every person experienced in market farming has been quick to give an amount of acreage that one person can plan, farm, and market successfully. this number is usually around 2 acres per person, so when you start planning to make big $$, make sure you account for hired labor. there are lots of other variables i dont have time to explore, but you get the idea. most people who become farmers dont do to become rich, most eek out the $$ they need to survive plus a little extra to save.

there are alot of things to consider. permaculturing your suburban back yard to have some perennial veggies and fruit trees is one thing, making a living as a farmer with it is another. successful permiculture business are hard to come by. i would suggest you steer your reading to organic farming business and try to incorporate into a model that is already successful. thats the plan for our 43 acres. talk to as many farmers as possible and read as many books as possible. attend any "beginning  farming" classes offered locally. in short, learn as much as possible and adjust your numbers according to what you learn, because there are few business plans to mimic for permaculture success.


an aside..... i took a class at a local urban farm that was run by an "engineer type" (actually he was an architect), and it looks to be a miserable failure. the farm wont last another 2 years without major change. if it wasnt for his father investing his nest egg in it, it would have never got off the ground. he likes to plan and draw and talk to people on the phone, but his plans never become successful. the farm grows a limited production, and depends on it "urban" status to impress local "well-to-do's" than dont realize its built on an old airfield gas station lot that contaminated the land. hes hired too many "managers" and depends too much on volunteers. in short, hes too much engineer, and too little farmer. sometimes its better to do and fail and adjust than to do tons of complicated math, draw pretty pictures, fail then spend even more $$ to prop up you original plan.

this is a big step, and lots of people fail. dont bite off more than you can chew, and learn as much as you can.

Have you included labor costs for hired help/employees?

hastingr wrote:
Next, I asked the question: "How many families food bills does it take to make $10K/month?"

I estimate that it would take at least 12 families of 4 to make up such an income.

Hi rich,

It's a great conversation and fabulous idea to have a business plan, AND I think you started with a question that is too limiting.

It doesn't have to just be about food. In fact, I think it's better if you diversify. Aren't Paul Wheaton's and Sepp's models examples of diversification? If you add in workshops, or bed & breakfast or farm stay opportunities, or sustainable forestry sales, or some kind of homestead craft you and yours are into, that could provide resilience to your plan.

What I'm saying is that food prices could plummet, while lumber prices sky-rocket and workshop fees hold steady. Or any other combo thereof.

Yes Jocelyn, I do have other "non food" items that I can add to the plate. For example, I have considered limited logging which could bring a substantial amount. I also make a darn great bar of soap. My "hobby" is woodworking, and I'd love to make small items like toys, P/O box banks and that sort of thing, that can take less than an hour to produce in quantity, but sell for $25. I've thought about B&B kind of thing as well. All of that I understand pretty well, except for the timber part, so I didn't really include that in the original post.

Dom: it sounds like your achitect was doing things with substantial inputs to prop up the system. I want to make a one time investment, such as terracing, cover cropping  or planting a fruit tree,  that will pay for years to come. In a sense, I think of it as a farm investment, not something that needs to be reworked every single year.
Unlike the guy that plans and plans, and draws stuff, I like to do. I love the back of the envelope plan. I built our backyard shed (Which turned out quite well and is very cute) with a drawing on a sheet of notebook paper that I had to reference on one occasion.
So, I love to solve problems.

As for labor, if I can pay someone $8 - $10 / hour to produce something that sells for $50, then I will do that trade all day long. I'd be happy to hire the entire high school senior class for the summer at those sorts of rates.


The only question is whether this makes actual sense, or even if we could sell it all.
Rich

Oh, sorry, Rich, I see now that you included lumber and value-added products in your original list. Oops.

Being able to sell is the challenge, eh? I'm not a marketer (though sometimes I'm a publicist) nor am I an economist, though I have been attempting to observe people's buying habits for some time. It surprises me how many folks buy based on "perceived" savings more than even true dollars-and-cents savings--it's crazy!

I'd recommend/suggest observing and finding out what works in your area. All the while working at building a market in your community and a brand. Some CSA's in my area are struggling this year with some late, local flooding and less subscribers due to the economy, so I don't have an easy answer. I'm constantly on the lookout for the educational window(s) that will work to convince folks to buy more local food.

Where are you located? Do you have a local grange, Slow Food chapter, Transition initiative or other community groups that might align with what you're proposing?

i think the OP's goals are too high. if he needs to make 120k net, then he should continue at whatever hes doing now, and just have a weekend hobby farm. that way he makes the money he needs to make, and he can give away some produce to his friends and family to make himself feel good about it. farmers arent stupid people. if any one could make $142/ hr and bring in 120000 a year with little work, the farmers would be rolling in dough, and kids everywhere would want to be farmers when they grow up. most info you find on big farms show that they make big $$$, but by the time they pay all their farm expenses, they dont bring home much of anything. the guys (and gals) who make good money, usually have small plots that cant change quickly with the trends, an explotable niche, little overhead (no/little hired help), and reasonable expectations. when you read in a eco mini farm book that someone makes 45000 off 1/4 acre it sounds great. like everyone can just hit there backyard and make a fortune. in reality, you cant just scale that model up to 10 acres and become rich. first off, if the market is fufilled at 1/4 acre micro greens, it will be overly saturated at 10 acres micro greens...... then theres the extra labor hired, extra expenses, etc... not to mention that the price you get will fall dramatically.

on the raised beef/pork/chicken idea....... in my state, you cant just sell someone processed meat. it has to be processed professionally. this will cut significantly into your 142/ hr profit. when you just add up all the money youre going to make and dont bother to come up with your expenses and where youll be able to market all this product, and what restrictions and legalities your going to face youre setting yourself up to fail.

most businesses take 2-5 years to see any real profits. unless you work your full time job and the farm until the farm makes money,  then youre going in the red significantly. i would suggest that the OP pay off all his bills and learn to live simply first. cut his profit expectations, and work on a farm for a while to undestand the amount of work he will be facing next. then begin work on his farm. even with setting up a successfull permie model, a farm will require lots of work on his behalf. most likely, with a much smaller realised profit.

Jocelyn,
I currently don't have a property, other than my suburban home, which is currently on the market for the past nine days (We already had one offer, but it was a low ball). I plan on purchasing the property after the home sells, renting a home here in Austin, and slowly migrating my way to the farm over time. But the Austin Area is not the final destination. Possibles are Mo, AR, TN, KY, WV.

In Austin, there are many farmer's markets here, maybe half a dozen or more, and they are quite busy. The vendors can often take home a serious pile of cash. One afternoon, I noticed the vendor I was purchasing from had a stack of bills about 4 inches thick, mostly $10s and $20s. He sold meat and eggs.

Clearly location matters. Also I watch to see which vendors have crowds and which one don't. It seems that the more variety you have, the more people will visit. Secondly, display still matters.
Dom,
I've visited a couple organic farms, and I need to visit many more, but in my opinion, they are not doing it very well. They are doing normal agriculture with compost instead of fertilizer.  Their model works for them, but just barely. They require a huge amount of input for each planting, and they aren't doing any permaculture type stuff at all.

Dom, You suggest that I ask the people that are struggling what works for them. This is like asking the corn farmer how it is best to be done. I'm not interested in struggling to get by for thirty years. I am interested in asking someone that is actually thriving how they are doing it. And so, here I am.

We can assume one of two things.
1. A food forest isn't successful because nobody is doing it that way.
or...
2. Few people are really doing a food forest, so there are no data points to extrapolate from.

Having never seen an actual food forest in operation up close, nor do I know anyone that is actually trying a food forest, I have to say that #2 seems more likely.
It seems that even here on Permies we have so many naysayers, never tried a food forest, claiming that it doesn't work, because nobody does it.

And, you are right, I cannot scale up to $120,000 worth of beef at $142/hour. But I don't need to. I don't want to. I need beef to be 10% of my income stream, because the cattle are a part of the system. I could do all lettuce, but there is only so much $3 lettuce one can sell at the farmers market. When I take my boxes of fresh goodies to the market, I need to have a variety of items, and not just five things, but dozens of things to sell. Do you put all your money in one stock? Of course not. You diversify your portfolio. You never know what is going to be hot this week. As a farmer, you might anticipate market swings, watermelons for example, big for the first week of July. Turkeys are huge in Nov/Dec. and so on.

We also cannot select one or two failed operations and say "See there? Doesn't work!" considering how many conventional operations we would have to say the same thing about. And, even though the conventional stuff is huge and "everyone is doing it" we cannot claim that it is successful.

I do plan on continuing my off farm income for awhile, all I need is an internet connection and an occasional trip to the airport, at least until I no longer need it to continue the farm improvements. I can even take the summer off if I want to.
My wife is also in the high-tech industry and can work remotely as well.

But, I want to be out of the job market in under ten years.

So, I have time, and for now, I have money. What I want is to invest in a way that I can self sustain in the future in such a way that it becomes my job.

rich

Cool, Rich, sounds like you've been doing lots of observing and assessing.

FWIW, I'd like to amend my comment that some CSA farmers I know are struggling. One of the farms I lumped in that group, the couple who own it are able to vacation in the hot, sunny, southern hemisphere every winter.  Not too shabby.

In 1994 there were 50 different DOS terminal programs available.    Some were retail, some sold as OEM, lots were shareware.  Each had a different feature set and each fit a different niche.  I made BananaCom.  I'm sure that if I asked, people would have told me that the market was already flooded so it would be a waste of time to bring another app into that space.  In about a year, BananaCom was downloaded more than all of the others combined.

I dominated the market.  

I could roll out a few more stories like that.  

The key is that if you want to be like all those other folks, you will struggle.  On the other hand, if you set your sights WAY above and shoot for that ...

If you run the math and it comes back to say that you need to sell your pork at $20 per pound to make the big bucks, then you need to be thinking about what you need to do to get $20 per pound.  Thinking about how the going rate for pork is $4 per pound is important to know, but thinking "that's the most anybody around here gets" is not gonna get you the big bucks.

If I move into your neighborhood and get $40 per pound, I just ate up all of your premium market.  I am now gonna be hell bent on getting a bigger market and selling for a higher price.  Now you might be thinking that you want to ride my coattails, but I think you will find that that market doesn't work that way.  Why didn't you get there first?

Before you can earn $120,000 per year, you're gonna have a negative year, then a $2000 year, then a $10,000 year, then a $30,000 year .... etc.

Marketing is gonna be a big part of what you do.

Aw, Dominic, I love criticism.

Heck I get it all the time. But, Paul says that he thinks $200K is not unreasonable. Maybe he is a liar? Maybe he is a fool! Maybe both?
Here you are telling me that $120K is unreasonable. I have two data points to work with. Paul Wheaton, blowhard that
he is, opinionated and preparing his evil plan to rule the world, and yours. So, I want your opinion, even if I disagree with it.

But if I disagree with it, I need to be able to articulate why I disagree with it. If I disagree with Paul, and on some of Pauls evil money making Ideas, I find them very limited in scope, but I can at least articulate why they are limited in scope.

But Dominic, your criticism is "It won't work, or people would be doing it" and I'm sorry, but I really don't buy the herd knows best approach to logic.

For example:
I spoke with a guy here in Austin that is doing aquaponics, raising veggies, herbs and tilapia, selling them to restaurants.
He told me that he has a problem. He can sell anything he grows, in fact he has to turn down business, because he can't grow his capacity fast enough.

I like that story. It tells me that there is a demand for "stuff" out that could, given the right amount of investment, replace all my current income.
Up to a point anyway...

I'm not sure that Paul's idea of selling a $4000 ham is all that likely. I bet there is a small and limited market for $4000 hams. But, it might well be worth trying, eh? I just want to sell one a year at $4k...
But I can imagine selling 12 special, polished, organic, adored, heritage apples for $25, shipped UPS in a lovely box. My wife has bought a box of Pears this way. Great pears, but they were a dozen pears! She has sent them as gifts even.
So, if we can sell 5000 boxes of apples for $25, we can make $125K. How many Trees does it take? Maybe 400-500 if we sell only the top 40% of the crop and press the rest.
Clearly, that is too much apple in the mix, but maybe we sell only 500 boxes of apples. 500 peaches, 500 plums, 500 mixed, 500 pears, 500 apricots, 500 kiwi, and so on...
And then you have the chickens... "Nobody here but us chickens!"

This is just one idea that can help us get there. I need to start a new thread. "Ways of making obscene money in Permaculture environments"

Since I don't have property yet, and haven't even locked down a location yet, asking the locals what works is pretty difficult since I don't know the where the locals are.

Rich

i would reply, but it would just get deleted. good luck making your fortune

Well, you could write something useful.  I am sure Paul wouldn't delete it otherwise.

Honestly, I've got most of my fortune already. I just want to make a living out of selling food from the back of a truck The investment isn't scary to me at all & money isn't the real object. Feeding the community,  feeding my family, and suriviving the coming zombie horde when oil goes to $200. That's the idea...

rich

I think the main reason "everyone isn't doing it" is because it takes a tremendous amount of personal drive, initiative, and energy. These traits are rare, and I bet you find them in all the people who have been successful at small organic farming/permaculture.   Unless you're a terrifically fit, energetic, and personable individual, you're not likely to find success, in my opinion.  

I bet it helps to have a green thumb, too!  

A green thumb?  Mine gets red sometimes 

Well it sure looks like you have the enthusiasm part, anyway (did I mention enthusiasm?  Well, I'm mentioning it now!  )

here is my view in a nutshell.

its all about diminishing returns. just for the sake of argument, imagine it takes 100 acres to make the $$ you expect. also assume you cant make $4000 for a ham, or any other astronomical amount for your produce (at least for the first 5-10 years). the vast amount of work and people you'd have to hire to get the rest of the work done would be astronomical (reducing your profit). if youre growing  "500 boxes of apples. 500 peaches, 500 plums, 500 mixed, 500 pears, 500 apricots, 500 kiwi, and so on..." in tree guilds, the harvesting time alone would be incredible assuming you dont hire a small army of people to pick for you (reducing your profit). selling this volume of produce at what passes as a state farmers market here would be laughable. so now youd be hiring additional people to attend other farmers markets for you..... further reducing your profit. these examples of costs you dont seem to be considering could go on and on. consider the amount of time and money to set up the initial plantings on 100 acres, farm buildings, landscape manipulations, marketing supplies and costs, managers, losses due to inexperience and experiments, processing, etc etc. unless youre going to sell wholesale (which wont get you anywhere near 40/lb for pork) to walmart or whole foods or other groceries, youre going to have a challenge to move enough stuff to make the $$ you want before it goes bad.


i never intended to come across as anti permiculture. i think it is a viable option, and intend to incorporate it into my farms business plan (i do have land, and am already developing my farm) along with other viable ideas based on works by elliot coleman, allan savory, grubinger, and others. i will have organic row crops AND edible forest gardens AND free foraging chickens and goats and pigs AND aquiculture. i dont discriminate against other ideologies.


that said, what do i know? the number of people on this forum that ACTUALLY farm could be counted on one hand. who knows if any are really profitable. there arent many permaculture farms to begin with, and most seem geared to feeding the inhabitants around them not with profit. most profitable permaculturists seem to be lecturers and designers, not farmers. most of the famous ones that ive read about either have little experience farming, or never farmed at all. some started farms, then handed them off to someone else and began writing and teaching (for $$$). but once again, im no expert, i dont have all the answers. youll be hard pressed to find any hard facts on what you can make and what your real net income will be. there is just no good info or answers. i dont recommend you take the word of someone who happens to have a website on permiculture...... i suggest you do REAL research on what it takes to have a profitable farm, permaculture or otherwise. that would do you much more good than just taking a six figure # from someone and basing your future on it. but youve read a book, and listen to some podcasts, how can i compare to that??

Eliot Coleman, who has farmed and still has a farm, advises that about 2 acres of intensive organic vegetables is about the most one person can manage.  Keep in mind Eliot Coleman was always (and probably still is for his age) a very energetic, fit person! 

http://www.fourseasonfarm.com/about/index.html

H Ludi Tyler wrote:
Eliot Coleman, who has farmed and still has a farm, advises that about 2 acres of intensive organic vegetables is about the most one person can manage.  Keep in mind Eliot Coleman was always (and probably still is for his age) a very energetic, fit person! 

http://www.fourseasonfarm.com/about/index.html

i think i stated this earlier in this topic. it was part of my argument. in most organic farm business books that share other farms financial info, show that farms that stay small enough that the family can operate it without outside help make the most $$$ per acre.

dominic wrote:
i think i stated this earlier in this topic. it was part of my argument. in most organic farm business books that share other farms financial info, show that farms that stay small enough that the family can operate it without outside help make the most $$$ per acre.

That seems to be the case because help is either very hard to find and hold onto, or eats into income a lot.    

Anna Edey, who gives a lot of details about her greenhouse business in her book "Solviva" finally had to close the business because she could not get adequate help.  I think this is an issue which can't be glossed over.  Or shouldn't be, in my opinion. 

I think the hardest part of profitable farming is marketing.  Anybody can grow a few acres of veggies.  Getting them sold at a decent price is the biggest key to success.  If you are selling at wholesale prices, you are probably not earning minimum wage for all of the hours worked.

To me, Joel Salatin ("Pastured Poultry Profits" and "Salad Bar Beef", and others) has done quite well economically, but his success is not from raising cows and pigs.  His success is from marketing them in such a way that he is receiving premium pay for his products.  He is getting $5 a pound for chicken, when it is $1.29 in the supermarket.  You need a better product, and a venue willing to pay for it.

If you want to take the easiest route, be prepared to sell wholesale and earn accordingly.  If you want to actually earn some money, be prepared to hustle up a market, and supply it.  It can be done, but it is not the lazy man's approach.

John Polk wrote:
  It can be done, but it is not the lazy man's approach.

Back to that energetic thing! 

H Ludi Tyler wrote:
That seems to be the case because help is either very hard to find and hold onto, or eats into income a lot.    

Anna Edey, who gives a lot of details about her greenhouse business in her book "Solviva" finally had to close the business because she could not get adequate help.  I think this is an issue which can't be glossed over.  Or shouldn't be, in my opinion. 

Hi Ludi,

My take away from Solviva is that the author tried to let the interns and some 20-somethings run the place and was disappointed with the results.  Not much surprise here that it didn't go well.  While it is certainly difficult to find responsible people, you can't expect to be able to hand off the ball the way she did and not have someone drop it.  The problems she mentioned (if I recall correctly) were people not willing to work through the summer season who wanted to go play, etc.  This is an issue with poor hiring, plain and simple.

So, you're right, it definitely shouldn't be glossed over, however the author of that book approached the issue in a very non-businesslike manner, which is the fast track to ending a business.  Competent and motivated people exist in the world.  Based on her description of the situation, it sounds to me like she was just poor at hiring and subsequently scaling the business.  This shouldn't be taken as a slight on the business model itself.

Now this is an interesting example of an obscene amount of money for a handful of fruit.
http://www.harryanddavid.com/gifts/store/gift____shop-by-price_shop-by-price-gifts-under-50

Kane Jamison wrote:
Based on her description of the situation, it sounds to me like she was just poor at hiring and subsequently scaling the business.  This shouldn't be taken as a slight on the business model itself.

I think you're probably right. 

hastingr wrote:
Now this is an interesting example of an obscene amount of money for a handful of fruit.
http://www.harryanddavid.com/gifts/store/gift____shop-by-price_shop-by-price-gifts-under-50

Rich - I envisioned Harry & David's model when I first read your mention of the box of apples/pears.  The main retail outlet is right down the road from us.  they are indeed a Marketing Machine.  Unfortunately they are in trouble with the business, but I think it is a management issue rather than anything else.

I think your hypothetical business model is right on and agree with you on many points.  One question I had is in regard to others who may be invovled in this venture with you - is your wife on board with the move to a farm income model?

If so, that will cut your needed income per person and will make the process much easier.  If not, I think it is still very achievable, but may create some more interesting issues

I have similar ambitions to what you have described.  There are five of us in the family, however, so I think coming up with a diversity of methods to allow each of us to generate $20-30K per year will be easy

A lot of good thoughts in this thread, I think.

Just a brief chip-in:

My father bought land a decade ago, and in the interim since then folks within .5 miles have drilled for oil.  His groundwater has been erratic, I see evidence of water pollution (I've yet to pay for a test), his garden site created this year has a strange smell that to me is linked to this activity, and this whiff of oil is almost constantly in the air.

Another example, I met a nice couple half a year ago or so in NY state.  They were from the Adirondacks.  Their community was freaking out because natural gas companies were moving in fast.  "Fracking" as they call it. 

I see that the OP has put a lot of thought into creating a possible lifestyle working in food and materials production.  Resource utilization, I shall call it.  I thought I would throw in one more aspect in considering your location for you.  I know you can not predict the future.  I do not have a solution to this problem... I have yet to buy land of my own, so I am anxious about what lies ahead.  If you have some possibility of observing local trends in mining and drilling, power plant expansion plans, major construction (highways/dams -->eminent domain), or some resources available to consult, I highly advise it.

Otherwise, all else is subject to opinion.  Good luck making money in agriculture.

Kaz, I assume you are implying that I look out for possible mineral rights bonanzas?
I mean, heck, a seam of coal running through the back forty would be nice I guess, except the utter destruction that would occur in digging it out, right?  Sort of a catch 22. I have a friend with 400 acres in LA, that has just gotten his first $$$$ from a drilling operation on it. But then, he NEEDS it...

As for looking at land, I look at two different land opportunities, and one is half the price of the other. Why?
Some factors involved might be:
1. Location
2. Location
3. Location
4. The quality of land - can you "produce on it"
5. Is there mineral or timber wealth on the land already.
6. Community value


In other words, I think that there is good reason for the diifferences in price.

A forty acre tract 20 miles from the Dallas Metro area is just going to cost a LOT more than forty acres a hundred miles from the nearest WalMart store.

Are the advantages of being closer to the city worth the extra price, or the smaller property?

On top of that, two parcels of land, one on rocky hillsides, and the second with a good deal of bottom land.
Does Permaculture need the bottom land enough to pay up for it? It makes sense to me that starting in an area that has twenty feet of soil could certainly make some things a lot easier. Is that something that us future farmers should look for?

So, you have 50 acres, with 30 acres in mature timber, oaks, & maples.
Is this something to look for? What is the real benefit?

Water!  Running water! 
My guess is that this is huge. I feel like I need at least a seasonal creek through the property with at least one or two ponds already in place. But it you get the right size property, you can swale your way into having your own standing water, with springs popping up here and there.

Electricity: If it is at the road, how much will it cost to bring it in, or is it cheaper to go off grid at that point?

Already planted in an orchard.
Now this might be nice to have.

Rainfall:
My first priority is to get something that gets at least 42 inches a year. It is one other thing you won't have to fight...


Thoughts?

Rich, is that your name...or a description of your bank account? 

You and your wife have great jobs, I think you are right on target about creating your farm while working.  Use your financial assets now to create your future farming success.

Plant your fruit and nut trees, plant your berries and pastures, plant your perennial veggies and herbs, create your swales and terraces and ponds, stock your pastures and ponds....then wait for nature to produce your bounty.

Time to wait is what most farmers don't have, but you have that option...use it.

Build a cabin, hire a worker with a family, give him a part of the farm business, let him do the labor,  and processing, and marketing, and selling.  Then he uses that profit to pay for his lease of your land.  You can use your assets to enrich another, while you enrich yourself.

If you build ten cabins with 2 acre plots, and you lease them for $800 a month, you bring in $96,000 per year on twenty acres.  That is no labor on your part (unless you build the cabins yourself).  I think you could get more money than $800 a month, that is just what came to my head.

Another idea that I love, and ultimately hope to use myself, is to have an on site USDA approved processing plant with a storefront attached.  Then you can add lots of value to your meat products.  Hire some laborers to do most of the grunt work on slaughter days.  You can process your own meat, meat for other farmers, and even process wild game.

Just some ideas,
Shawn

Before dreaming of the oil/gas/coal bonanza that may sit under your property, you need to determine if you have "rights" to it.  I know several people with land in Texas who have no oil or mineral rights on their property.  They hope and pray that nothing ever gets discovered that would be economically exploitable, as the destruction of their crop and grazing land would be enormous, with no payback.  Water rights is another "biggie".  What are your water rights?  Somebody 2 counties over may have a partial claim on it.

Being from Oklahoma (and in Texas for 23 years now) I know about mineral rights:-)
But I hadn't considered the impact of someone else exploiting what was under ya... Thats a good point... Good point about water rights too. I will have to keep that in mind as well.

No, I'm not Rich, that's just a name, tragically.

Shawn, I like your idea of the ten cabins thing.  A nice idea... I'm not sure I want to have ten sets of permies residents with me, unless I liked em. Now I like most people, and most people like me, I hope. My wife's of another persuasion though. You don't have to rub her wrong too much before she puts you in the outhouse. We'll have to work on that:-)
Good idea on the farm foreman kind of thing too. I also appreciate your planting schedule

But, when the family gets together, all eighteen of us, which isn't all that big, but hey Christmas only comes once a year, it would be good to have room for everyone.

Any one considered doing this as a retreat center sort of place? They can do an awesome amount of business as well.

One idea suggested above is a B&B sort of thing.  I found one and that are about half booked through the year. Which ain't bad at all!

http://www.agaritacreek.com/

Well, there's a big difference between grossing $120k a year and netting $120K a year. What's your assumed margin?

Here's some I know:
Wholesale plant nursery: 10% net profit margin.
Greenhouse tomatoes: $10 annual net profit per square foot.

I know folks direct marketing organic beef. I would get a huge laugh if I told them I was going to get in the same business because I'd be grossing $142/hour.

Think about where your markets are and how you're going to serve those markets. Production is hard. Marketing is harder. Making a profit is hardest of all.

Hey NM, all very true. Yes, those are all gross numbers, ignoring marketing, sales, inputs, labor and so forth.

I'm just optimistic enough to think that if I can produce it, I can sell it... A little crazy, I know... But who in their right mind would actually do such a thing without a SHTF scenario?
Well....
There's me:-)

Ok, business 101 here:
There are two numbers you can fiddle with. 1 is revenue. You can sell all the <something here> that you can make for a certain price per unit, barring that you aren't a major player in the market, and drive prices lower, or produce beyond demand. Not too worried about that on anything less that a thousand acres:-)
The second number we can work on is expenses, or inputs.

Then, by using permaculture techniques, I plan to set the inputs to their bare minimum. No weeding, not spraying, no fertilizers, and so on.

So, the farmer that is able to reduce inputs makes a lot more money.

The average corn farmer sells $500/acre of corn. But expenses are $450. So, $50/acre profit, let's say.
First, I expect to produce more than $500/acre, by producing something with actual value.
On fruit alone, if there are 50 trees per acre, producing/harvesting 100 lbs of fruit each, You get 5000 lbs of fruit, worth a lot more than corn, yes?

If the cost of growing that 5000 lbs of fruit is merely the investment of planting the tree, the cover crops and herding chickens, and pigs through the area, then there is no waste, and the per unit increase in costs per lb of fruit is merely in the cost of picking it. If the only cost of production is in picking it, and packaging it, then that leaves you a lot of time left over toward selling it. It literally makes you the low cost producer. That said, you have a premium product. It is like being able to sell a Porsche competing against Ford Fusion prices, and having a lower cost of production than Ford. You will notice that Porsche does not sell at Ford Prices either.

So, by creating a premium product, and having the lowest possible cost structure in the marketplace, that is the spot for maximum profit, which is our goal
along with "to feed ourselves."

Wow now you have now given a second utterly pollyanna scenario. You don't just plant fruit trees, run some chickens and pigs under them, and harvest premium, marketable fruit. It is not a single investment but rather the creation of a living system that I guarantee you will require inputs of time and money every single year in perpetuity. Now if you're talking about feeding your family and they don't mind edible but wormy apples, that's another proposition. But you're talking about premium marketable fruit.

There so much more to it that I couldn't even begin to want to talk about it, but to make a premium marketable fruit, look into kaolin clay, degree days, pheremone puffer disruptors, pheremone traps, pruning techniques, soil testing, microirrigation systems for frost protection, and post harvest handling techniques.

I'm not wanting to discourage you, but bring you into reality here. As a grower who both knows permaculture and is producing premium value-added products, just let me say that it appears you have an unrealistic idea of the amount of labor and inputs involved for your endeavor. Read everything you can, and brainstorm a plenty, but you're going to have to apprentice on working farms and gain experience before you can begin to design something better. You can't write a business plan when you don't really know how to produce the product. Naive enthusiasm after dropping out of computer engineering is exactly how I got my start, but there were eight very lean years before I turned a decent profit.

NM Grower wrote:
Naive enthusiasm after dropping out of computer engineering is exactly how I got my start, but there were eight very lean years before I turned a decent profit.

Could you share with us how you paid your bills during that period?  Thanks. 

H Ludi Tyler wrote:
Could you share with us how you paid your bills during that period?  Thanks. 

First thing I did was reduce expenses as much as possible. Then I got roommates for the house to share expenses. I took some short-term technical consulting gigs in winter to pay the bills. I saved up money when I was working in technology to fund the transition. Once I had some markets established, I took out a loan so I could have more product to sell. Eventually the farm made enough income to pay off the loan and drop any side gigs.

Thank you! 

Hey NM,
That is quite helpful. I am sure that there is always "more to it?" but I need to have someone tell me what the "more is" as opposed to "There just is" Hard to plan for "the unknown."
This is one of the reasons I plan on a relatively slow transition over a period of maybe eight years as well. Heck, in 12 years, I'll be able to draw from my IRA even :-O
Getting old sucks.  Anyway, I'm hoping to learn from folks like you and others so that my tipping point is shorter than eight years (hopefully).

I assume that nobody gets it right the first time. Neither will I. I plan on the idea that I will have failures before I have success. But failure to plan is the biggest failure of all.
I understand your point that there is a constant stream of investment/capital that goes into the homestead. For some items, payoff is immediate, For others, it might be eight or ten years before you get a return on investment. At some point, I will have planted my entire property, and will be investing in something else, maybe a barn, or a shelter, or a website.  Who knows what. But each investment will have a point where it starts to "bear fruit" as it were. The goal is to invest wisely, and make as few mistakes as possible. I am sure I will screw up occasionally,  but I intend to learn from your mistakes, and the mistakes of others as best I can. That's the point of having this conversation, isn't it?

But what folks like me need to know is the following:

1. What did you do right?
2. What did you do wrong?
3. What would you do differently?
4. Would you do it again?
5. Could you describe what you are doing on your property?

In addition, I would ask the following question:
6. On a scale of 0-10 what is the level of permaculture design utilized in your situation?

hastingr wrote:

But what folks like me need to know is the following:

1. What did you do right?
2. What did you do wrong?
3. What would you do differently?
4. Would you do it again?
5. Could you describe what you are doing on your property?

In addition, I would ask the following question:
6. On a scale of 0-10 what is the level of permaculture design utilized in your situation?

I agree more details would be very helpful! 

Gosh those questions are a great outline for a book! Given that this is the busiest time of year for me, I will try to get to all of it in time.

So topic #1, is What I Did Right.

I volunteered on a friend's farm. Not that I learned all that much, but I sure did get inspired that I could do it too.

I started growing seasonally on a leased facility. There's plenty of people who are too old to farm, they need to preserve their water rights, and the kids all took professional jobs. I fell into a sweet deal where I paid $200 a month seasonally and produced more than I could sell.

I located near a successful farmers market and made that the initial revenue source. Now it's a tiny fraction of my income, but starting out at farmers markets is great because you have no obligation to produce anything. You bring what you have, you sell some of it, you go home with what looks like money in your pocket, you ignore the fact that you actually made under $2 an hour for your time, and you feel like you're on your way to accomplishing something.

I never compromised on quality. If it wasn't great, I didn't offer it for sale. People thought I was a brilliant grower, but really I just had high standards and left all the questionable stuff at home.

I kept very detailed records. At the end of each day, I made sure that what happened was all documented. I could tell you when a crop was planted, what variety it was, the seed source, transplant date, first harvest, last harvest, quantities, and more.

I started branding my products early. I see farmers at farmers markets who still 14 years after I first met them have stands full of unidentified produce, in a largely generic looking booth, with poorly executed hand-drawn signage.

I developed products rather than "commodities." Right now at farmers markets 50% of the vendors are duking it out selling greens. There is not much differentiation among them.

I never sold based on price.  I charged based on costs and what it would take for me to continue farming.

I started using season extension techniques immediately. Being the first to market was highly advantageous. I could name my price, and people might whine, but they would pay for good produce. Interestingly, being last to market was not much help, because consumers were still used to glut prices. When everyone else's produce had frozen but mine had not, I'd get customers complaining that my zucchini wasn't 3 for $1. Please. Growing under cover costs more. The customers are not entitled to glut pricing when the glut is over.