Farm Income without much needed investment:
Growing Profits Through Agri-tourism
"In every walk with nature, one receives far more than he seeks.” For those blessed to live their lives connected to the land, this quote by John Muir surely rings true. I am constantly in awe of Mother Nature and all she bestows across my farming acreage day after day. The sounds of birds signing with the coming of Spring, fawns testing out their athleticism on a Summer’s day, the dazzling rainbow of colors come Autumn, and the absolute silence of an owl gliding across a snow-lit Winter’s pasture. Too much to mention, but all provide a powerful connection to the outdoors.
In recent years it hasn’t just been those that own land, or live adjacent to a forested landscape, that realize the good fortune of connecting with Nature. No, folks from the farthest corners of the country, in the hustle and bustle of the big city, are making conscious efforts to get back to the land. Riches beyond the almighty dollar drive these city dwellers. Call it a fountain of youth, or some other elixir, but folks both young and old are coming out to the rural landscape to capture something missing from their lives. Whether something new, or something lost, this seeking out of a Nature-connect is driving a new economy. Agriculture operators, coast to coast, are realizing an uptick in income opportunities by catering to this demographic of consumer. Coined Agri-tourism, farms, ranches, vineyards, and nature-based settings are opening up their doors to offer seekers an intimate opportunity to connect to their food and the ethereal intricacies that come with season to season fluctuations in Mother Nature’s symphony. As one such farm that has taken an active role in providing Agri-tourism offerings, the endeavor has proven mutually beneficial to both farmer and seeker alike.
So what is agri-tourism? Agri-tourism is defined as a commercial enterprise that links agricultural production and/or processing with tourism in order to attract visitors onto a farm, ranch, or other agricultural business for the purposes of entertaining and/or educating the visitors while generating income for the farm, ranch, or business owner. This can be as simple as allowing guests to walk your farm, take pictures of your livestock, and enjoy a sack lunch while overlooking the pasture to something more involved like an overnight lodging experience, horseback riding, or picking out the perfect pumpkin come Fall harvest season. The beauty in the offering is that each agriculture operation is different, with the owner dictating how much or how little they wish to provide. This last point is widely appreciated by most owners, as full-time farming is a lot of work, and anything that would interfere such demands dissuades hard working farmers and ranchers from taking on more. Take heart, as this is not the case with a customized approach to agri-tourism.
For most agriculture operations, the infrastructure is already in place, so agri-tourism is about providing services and/or products that marry up with such operations. As an example, ABC acres offers a number of activities that don’t tax our disposable time. We are already doing livestock duties morning and afternoon, so charging folks a ‘per person’ fee to tag along, feed the livestock, pet a goat, and learn about our seasonal care demands is educational and fun. Offering folks the opportunity to walk the farm with their dog for a ‘per car’ fee allows folks to meander the property on their own time, take in all the sights and sounds, but not interrupt the flow of the farm’s chores. In past years, as the provider of beef and pork shares, ABC acres has seen a 300% increase in product sales simply by having the consumer connect with the property. They see the livestock, understand the care that goes into a healthy animal and consumable product, and feel empowered to make an educated purchase of food for their family’s table. Additionally, ABC acres has two rental cabins on the property, and has experienced revenues approaching six figures as a direct result of agri-tourism pursuits.
For those wishing to connect with Nature, to understand where their food comes from, or simply wishing to disconnect from the buzz of electronics and the noise of city life, agriculture operations can provide such a respite. These offerings are helping fuel a new industry. An industry that heals lives and educates all to the benefits of a healthy environmental system, all the while bolstering the farmers’ livelihood in the process.
A Fresh Approach to Land Production
In the agriculture world, it is about selling hay tonnage, heads of cattle, goat cheese, dozens of eggs, and a myriad of other from-the-land products in an effort to bring in enough money to pay the bills and put a little away for a rainy day. Funny thing is, I did none of these things today, but I still pocketed $450 in farm revenue. What’s my secret? Agri-tourism... and you can do it too!
At ABC acres, we are building a revenue model in line with the growing trend of folks seeking a nature connect. A model built around charging fees for performing every day actions. Over the last three years, we have seen earnings off of on-the-farm agri-tourism activities grow from $3500 to upwards of $7500 annually. Here are just a few examples of ABC acre’s on-the- farm activity offerings:
Each and everyday, twice a day, we are tending to livestock. Feeding the pigs and goats, rotating the cattle to a new daily paddock, collecting eggs from the mobile coop. Coined ‘Livestock Feeding’, a tourist favorite, we collect $75 per group to tag along. We answer questions while guests pet the goats, collect the eggs, and take pictures with our majestic Scottish Highland cattle.
Part of maintaining a farm is all about observation... the gate to rehang, the fencing to mend, the orchard trees to protect, and on and on. This observation is accomplished by walking to the corners of the property and making notes. Coined our ‘Nature Observation Walk’, we collect $100 per group for an hour walk around the farm. Sure we are taking note of all the tasks that need attention, but along the way we are speaking to the history of the valley and our particular piece of ground, pointing out different species of trees and birds, and marveling at the beauty all around.
Weekly chores require attention to irrigation, production gardens, greenhouses, livestock paddocks, etc., ... you know the drill. These ‘Project Specific Tours’ command a $100 group fee for a hour-long deep dive into the particular system. A time when we might be seeding trays, weeding gardens, or planting an orchard, we speak to the operation, what our goals are, and the seasonality of maintaining its productivity.
All of these offerings are part of our day to day, week to week. No extra energy or capital is required, nor is productivity lost in the process. We continue on with our specific demands while earning a healthy revenue stream along the way.
Going a step further, we have chosen to incorporate overnight lodgings, aka ‘Farm Stays’, on the farm. At first glance this might seem near impossible for some, but looking at the financial model in comparison with market analytics, and the possibility takes shape. Montana visitors are already paying $150+ per night to stay at the local hotels, so we created a model to work inline with this fact that has proven profitable year after year.
A typical hotel room is no bigger than 400 sqft, so we designed a rental cabin at 500 sqft that incorporates two bedrooms, bathroom, kitchenette, dining, and outdoor deck. At $115 per sqft to build, with additional funds for infrastructure / furnishing, we developed a model to have a cabin built for approx. $75,000 that would be rental ready. In carrying a loan on 60% of this cost (~$45k over 30 years at 4% interest), we figured an annual P&I payment of ~$3k. ABC acres currently averages 115-130 bedroom nights a year, so based on 130 nights at $150 per night, you can expect a rental revenue of ~$20k annually. Once you figure in your annual loan payments, increased property / bed tax, utilities, and general upkeep, we realize an annual profit of ~$13k. Depending on your individual situation, and the structure of the loan, you could take this annual profit, and over three years put it all to the loan principal and be free and clear on the rental starting year 4. A scenario that has ~$16k in income added to your bottom line, and we haven’t begun to discuss increasing rental rates for the shear fact that a Farm Stay in a cabin connected to the outdoors is a heck of a lot more enjoyable than the claustrophobic confines of a drab hotel room. Now take this model and multiply it by five to ten rental units, and all of sudden you start to see the opportunity for a whole property offering. Before long, the stress associated with obtaining a third hay cutting doesn’t seem so important.
Adding to both the on-farm activities and Farm Stay rentals, we have a direct to consumer connection for selling our farm goods. Eggs, steaks, t-shirts, etc., and as a result we see an uptick in the sales of our farm-to-table products at a premium price. These nature seekers are immersed in the happenings of the farm and the surrounding landscape. They better understand the effort and care that goes into stewarding the land and livestock to provide the consumer a healthy product for their dinner table. They are more than happy to support the operation and with disposable dollars, we are more than happy to provide.
No matter the property, whether farm, ranch, vineyard, or a cabin tucked in the forest, folks from all walks of life are being drawn to the benefits of connecting with nature. It is innate to our being. Something lost on most, while subconsciously calling to them for a reconnect. Your piece of ground offers this awe-in-time moment. A chance for healing and reprioritizing the things that are important in their lives. So next time you feed the livestock, mend the corner fence, or chase the deer off the fruit trees, think about how an agri-tourism offering could improve the bottom line for all involved.
Happy Yondering
Ready, set, go! Your landscape is teaming with life, on-property activities are set, and perhaps you have incorporated an overnight stay, but how best to share your new dip into the agri- tourism industry with those travelers thirsting for this nature-connect? Don’t fret, as there are many avenues to consider, most of which won’t stress your pocket book.
Social Media, Social Media, Social Media. It’s free, it’s easy, takes only minutes a day to fill with content, and has over three billion active viewers. Start by crafting a unique name for your destination, and secure that across all desired channels. Learn what content attracts the most chatter, then get to posting. At ABC acres we find pictures of the mountains, videos of animals, and unique seasonal events capture the most noise on our channels... and that’s a good thing. Whether local community for day outings, or destination seekers from afar, a Social Media presence will start to lay the groundwork for building a collective following.
Local & State tourism offices are an excellent way, for little expense, to get exposure to travelers actively planning a trip to Montana. With an annual membership, you are listed on destination maps and activity boards, along with lodging options showcased on their respective websites. Guest content needs may afford opportunity to provide written & visual content of your unique operation for use on these sites. For a little more expense, strategic banner ads will put your name in front of viewers on popular viewed pages or at the top of specific search results. Unlike Social Media, visitors to these tourism specific websites are actively looking to travel, so a presence here gets you in front of people ready to spend.
To take it to the next level, a dedicated personalized website is always a good thing. It sets you apart from the competition, and conveys to the consumer that you are serious about your operation and want people to take notice. Many self-build website offerings exist, and you don’t need to be a whiz to execute. However, it does need to be quality, and I for one am not a webpage designed. If you can supply the pics and narrative, then a classy single home page can be crafted for around $500. It can capture the look, feel, and energy of your offering, while conveying all the important details you wish to pass along to the consumer. If you have a multifaceted operation, and wish to capture that in many pages under one website, then look to spend more for development. ABC acres has about $4500 into our website, complete with hidden links to outside websites and our online Shopify account. Start small, lead with quality, and call out pertinent information on what makes you different and unique. By putting yourself in the shoes of the nature-hungry consumer, you can craft an attractive website leaving consumers wanting.
If you're thinking that this is all great, but how can you possibly manage all the inquiries and bookings that result from this public presence and not interrupt your day to day farm demands, don’t give it another concern. There are specific platforms that will gladly host your property’s overnight lodgings and / or activities, market them to interested seekers, manage scheduling, and advise you when visitors are ready to book. What does it cost, you ask? Most platforms take a percentage of the fee you are charging your customers, so no monies change hands until you yourself have earned some revenue. The trick is to align yourself and your property’s offerings with a platform that best represents and interacts with your target audience. For instance, a platform best known for rentals and activities in urban settings would not best fit your agri-tourism focus. In reality, until now, there has not been one destination specific online platform to represent agri-tourism properties and the consumers seeking such a nature- connect. That is until now.
It was October 2017, and I was frustrated with ABC acre’s agri-tourism offerings being undervalued in the eyes of current online booking platforms. At the same time, I saw fellow ag operators working long days with little to show for their Herculean efforts. I thought to myself there had to be a better way... a way to keep doing what we love, which is hands in the dirt, while supporting a new model of income. A model that directly ties into the wave of people seeking out farms, wishing for a closer connection to nature & their food, and all the while improving their health & wellbeing as a result. It was then and there that Yonder was born.
Yonder started this past Winter, and come 2020, we will be open for business connecting agriculture and nature-based properties across the world with families looking to connect with the life-enriching experiences such destinations offer. Currently we are busy signing up rich, diverse properties, and I welcome you to visit www.yonder.com to learn more about becoming a Yonder Host.
No matter the marketing strategy you choose to implement for promoting your on-property activities and/or overnight lodgings, you must lead with a quality offering coupled with exemplary customer service. In the end, it will be consumer reviews and word-of-mouth that start to drive your agri-tourism notoriety in the court of public opinion. Three years into the world of agri-tourism offerings at ABC acres, we have seen income increase each year while supporting the sales of from-the-farm goods. As we prepare to enter the coming Fall / Winter season, know that I am committed to assisting the agriculture community in developing means to diversify their income portfolio. Pickup up the phone or shoot me an email, and let’s visit on your own ideas to incorporate the same on your piece of ground. You will be happy that you did.
Happy Growing!
Tim
Owner @ ABC acres
Founder / Chairman @ Yonder
