5 Major Cost to Start Farming Business

In the big world of farming, lots of people dream about starting their own farm. They want to grow veggies, raise animals, or make special products. Working outside and being close to nature sounds amazing. But there's a lot of money stuff you need to figure out first.

This guide will help you understand the costs you'll face when starting your farm, like buying land and building stuff for your farm. We'll focus on places like California, Washington, and other places where farming is popular in the USA.

Cost of Farmland Acquisition

The main step is buying a proper land for farming. The cost of acquiring land can vary dramatically depending on factors such as location, soil quality, availability of water, accessibility, farmhouse type and quality, presence of barn or farm shop, and proximity to markets. If you are looking to explore where you can search for farmland, there is a blog post introduced 8 Best Websites to Find Farmlands.

As an example in California where we purchase our farm land and started our lavender farm at Farzaneh Valley Lavender Inc. In California, prime agricultural land in regions like the Central Valley is at top dollar due to its fertile soil and favorable climate. In California, the average price per acre of farmland can range from $5,000 to $20,000 or more, depending on the region. For example, in the Central Valley in California, majority of the nation's fruits, nuts, and vegetables are grown. The prices can soar even higher, with some parcels listed at over $30,000 per acre. In contrast, in less fertile areas or regions with limited water availability and/or lower soil quality, prices may be more modest, ranging from $2,000 to $5,000 per acre.

Similarly, in Washington state, particularly in the fertile Yakima Valley and Skagit Valley regions, the cost of farmland can range from $5,000 to $15,000 per acre. These areas are known for their diverse agricultural production, including apples, cherries, berries, and vegetables. On the other hand, in arid regions like eastern Washington, where water availability is a challenge, land prices may be lower, ranging from $1,000 to $3,000 per acre.

Keep in mind, larger the size of the farmland, more discount you can get, so per per acre in 50-acre farmland can be lower per acre compare to a few acres farmland. The farmland we purchased cost around $15000 per acre in Capay Valley in California for a 30-acre farmland. However, there is another listed property with at least 5-time area but the price per acre is around $5000.

Cost of Farm Infrastructure and Equipment

The next big step is getting everything set up and having the right tools. This includes all the things you need to make your farm work smoothly, like fences to keep animals in and irrigation systems to water your crops. You'll also need machines like tractors and equipment for harvesting.

In places like California, where water is really precious, you've got to invest in good irrigation systems, which can push up your costs at the start.

For instance, in spots like Napa Valley and Sonoma County where they grow lots of grapes, installing drip irrigation systems can set you back between $1,500 to $3,000 per acre. And if you're growing grapes, you'll need machinery to help with harvesting and sorting, which can cost anywhere from $50,000 to $150,000 or more, depending on how big your farm is.

In Washington state, especially where they grow fruit like apples on trees, you've got to spend a chunk on setting up the orchards properly. That means investing in things like special systems to support the trees, protect them from frost, and the right tools for pruning and picking the fruit. So, if you're starting an apple orchard, for example, expect $10,000 to $25,000 per acre, covering things like planting the trees, setting up irrigation, and building whatever you need for the farm.

Farms (www.farms.com) provide option to search for farm equipment and have a sense of available tools, equipment, and heavy duty farm vehicles.

Also, to purchase tractor, you can purchase them new from John Deere website, or you can find used tractors from website like Iron Planets, RDO Equipment or other websites in google.

Cost of Seed, Plant, and Livestock

When you're starting out as a farmer, one of the big expenses you'll face is buying seeds, plants, or livestock. How much you spend on this can change based on what you're growing or raising and how good the seeds or animals are. In places like California, where there are lots of different crops, the costs can be quite different.

If you are considering for seed cost, considering 1-acre of farmland to plant hay for livestock as a business, it requires to buy 20 lb of hay seed, which costs around $200. Also, keep in mind that different types of hay have different market values. For example, alfalfa hay typically commands a higher price than grass hay due to its higher nutritional content.

With 1-acre of hay farm, you will be able to generate around 4 tons of hay (if lucky), which can be sold at price of $200 per tone. So, a total of $800 can be generated as a revenue in a 1-acre of hay farm.

plant hay for livestock revenue is around $800 for 1-acres of farm.

If you are considering to plant vegetables, for instance, in areas like Salinas Valley and Santa Cruz County, where organic veggies are popular, good-quality baby plants such as lettuce, tomatoes, and peppers can cost between $0.25 and $1.00 each.

In Washington state, known for its apple and cherry farms, buying young trees for planting can vary from $1.50 to $5.00 per tree, depending on the type and how they're grown.

If you are considering to plant flowers such as lavender, prices for potted lavender plants can range from $5 to $20 or more per plant, depending on the size and variety. It is better to start with small-size flowers since for large size farm since it will be significantly cheaper and cost for your business. Also, for large size farm, due to large order quantities, the price can be cheaper.

In our farm, Farzaneh Valley Lavender Inc, which can be found in google map or Yelp pages, we have 30-acres farm, focusing on growing lavender. We have around hundred thousands of lavender plants. In addition, we have a small Olive garden. Farzaneh Valley Lavender is Women-owned, family-owned farm, located in Yolo County. Our farm is just 2-hours from the Bay Area and 1-hour from the Sacramento. If you are considering to buy lavender plants in small or large quantities, you can reach out to us and seek for consultation.

Farzaneh Valley Lavender is 30-acre lavender farm located in California.

If you're looking into dairy farming, getting top-notch dairy cows for a small farm could set you back anywhere from $1,500 to $3,000 per cow. A baby goat can be purchased at a price of $200 or more in California. You can search livestock at livestockmarket page. At LivestockMarket, you have access to the go-to online platform for private treaty sales of livestock, horses, and hay. On this website you will find categories for all types of equine and livestock, including cattle, goats, sheep, and swine.

go-to online platform for private treaty sales of livestock, horses, and hay

In National Monthly Grass Fed Lamb and Goat Report, you will be able to find the price and find out the retail price for each part of livestock if you consider that as a business. Holding and selling livestock might not be very profitable.

If holding 10 goats in your farm, each goat can cost in average $300 to buy, so $3000 to purchase the livestock. Also, considering feed costs to be around $1500 for 10 goats, and veterinary care and medicines to be $1000 for 10 goats, the overall start-up cost can be $5500 to buy and hold goats during the first year. To make profit, consider a medium size goat to be around 75 lbs, so average price of goat direct to consumer is $23, so around $1000 can be gained from selling the stakes, leg, etc. So, 10 goats can make around $10,000 while the expense can be around $5,500.

National Monthly Grass Fed Lamb and Goat Report, Goat - direct to consumer retail price on March 2024, Missouri

National Monthly Grass Fed Lamb and Goat Report, Lamb- direct to consumer retail price on March 2024, Missouri

Cost of Operation

Running a farm business involves ongoing operating expenses such as labor, utilities, fertilizers, pesticides, feed, and more. These costs can vary depending on the type of farm, farming practiced, scale of operation.

In California, labor cost can be a significant concern due to stringent labor regulations and a shortage of skilled agricultural workers. For instance, in labor-intensive crops like strawberries, labor costs can range around $10,000 per acre per year. Similarly, in Washington state, utilities expenses can add up quickly due to cost of energy, especially for farms depending on irrigation system (required water pump and electrical switches for automated system) for crop production. Additionally, the cost of fertilizers and pesticides varies depending on the type of crops grown and the pest pressure faced by farmers.

Cost of labor can be high in farm business

Cost of Regulatory and Compliance

Starting a farm business involves various regulations and obtaining permits and licenses. In California, farmers must look into permits and regulations about water use, pesticide application, and land use. For example, obtaining a water permit from the State Water Resources Control Board requires application fees ranging from a few hundred to several thousand dollars, depending on the volume of water requested. Also, compliance with food safety regulations, such as the Food Safety Modernization Act (FSMA), may require investments in infrastructure and training to ensure compliance with food safety standards.

Food Safety Modernization Act (FSMA), may require investments in infrastructure and training to ensure compliance with food safety standards

Conclusion

In conclusion, starting a farm business involves navigating a myriad of costs, from land acquisition and infrastructure development to seed, plant, and livestock purchases, as well as ongoing operating expenses and regulatory compliance costs. By understanding these expenses and planning accordingly, aspiring farmers can better prepare for the challenges and opportunities of starting a farm business in diverse agricultural regions across the United States.