Carl Zulauf, professor in agricultural economics at Ohio State University, recently co-authored an article examining a survey published in Journal of the American Society of Farm Managers and Rural Appraiser (2004), which found that 36 percent of survey respondents were first-generation farmers. Thirty-six percent! (Click here for Zulauf’s full article.)
“The relatively large presence of first generation farms in this study suggests that entry into U.S. farming is not as difficult as conventionally presented," Zulauf summarizes. "This does not mean it is easy. Nevertheless, the entry of more first generation farmers is another reason for believing that the next generation of farmers may be easier to find than some suggest.”
If more individuals are coming into farming, how in blazes are they doing it?
New farmers buying ground
Lance Peters grew up on a dryland wheat farm in Wyoming. When he graduated from University of Wyoming in agro-ecology and soil science, he wanted to return to farming but knew his parents’ farm wouldn’t support a partner, so he took a job in agronomy sales with a local farmers’ cooperative in Wheatland. But Peters has a plan to return to full-time farming by the time he’s 40, only 16 years away, and he’s beginning now to prepare for his return.
By keeping his eyes and ears open, Peters found 1,200 acres of available marginal dryland. But it has problems – unmitigated weed problems, for one, rocks and low soil fertility for another. In other words, it’s a fixer-upper, and he has no illusions about that. The property is like a cur dog that’s been neglected and looks pretty ragged but beneath the unbathed, uncombed hair, there’s potential. If you clean it up, feed it, teach it a few manners and give it some care, it could work.
Peters also looks past the obvious challenges of the property in question and sees some of the untapped potential. For instance, there is a strip of ground near a highway snow fence that is not in production, and some curves surrounding an electrical substation that could be planted.
Peters has researched various financing options for land purchases and operating expenses. Currently, there are several low-interest programs offered, either through the State of Wyoming or USDA Farm Service Agency (FSA). Some programs offer 100 percent financing and some offer 80 percent, subject to qualification. The beginning farmer and rancher loans currently define a beginning farmer as one who "has not operated a farm or ranch for more than 10 years; does not own a farm or ranch greater than 30 percent of the median size farm in the county as determined by the most current Census for Agriculture; meets the loan eligibility requirements of the program; and substantially participates in the operation."
However, knowing that it will take a few years to bring the land into full production, Peters hopes to negotiate a sliding-scale payment in the purchase contract and realizes the dangers of over-leveraging the operation.
Labor and available resources
Peters’ plan includes continuing to work at an off-farm job for the next 16 years, working on the farm after regular work hours and on weekends. He’s hoping to collaborate with two brothers and his father during labor-intensive events, like harvest.
Peters has a few pieces of old equipment he’s collected, and he’ll have to start with that. He’ll also depend on a brother to help with mechanical repairs. Through his current job, he has access to sprayers for weed control and can cut some costs by spraying his own acres.
As if figuring out the financing through various government agencies wasn’t enough, part of the property Peters is considering is under a state 10-year lease program, which means negotiating the halls of state government, as well, and factoring that element into the negotiated purchase agreement.
Another hurdle Peters will face is the distance to local grain storage elevators and higher transportation costs to get it there, coupled with the fact that a dryland operation won’t see any sales income for one year – fall planting to late summer harvest. Can he survive that long?
Peters has a rather large decision looming in the near future – is being young with lots of energy and desire enough to begin a farm operation? With a highly leveraged operation, marginal production and several obstacles for marketing should he begin farming even if the negotiated price is low?
Maybe the greater question to ask would be – can the agricultural industry afford it if he doesn’t? FG
Be sure to read about Sarah Sortum in Part 2. Then check out Jacob Shenk's story in Part 3. And don't forget to read about Brandon Fawaz's journey in Part 4.
