Leasing vs. Owning for the Small Farmstead - Financial Considerations

Pastures at Vermont Shepherd in Westminster West, VT

One of our readers asked if we’d considered leasing land instead of owning it. When we first started down the mental farming road a little over a year ago that was one of the first things I researched, and I can’t say that we’ve officially decided on either option, but we are leaning heavily. Of course, the answer to everything in farming is "it depends", but that drives me crazy, so here's some thoughts off the top of my head.

Financial Considerations

 

Capital Commitment

Probably one of the biggest considerations in the lease vs. own dilemma is understanding your current capital position. If you are hell-bent on farming but have little capital then you are left with few options besides leasing.

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Small Farm Operating Expenses

One thing we haven’t found a lot of information about online is the operating costs of running a small, homestead farm. Instead, we’ve visited a bunch of farms, thought long and hard about what we spend money on and slowly put together our own operating expense budget. We thought it would be helpful to share some of our findings and maybe provide some clarity for other beginning farmers. This is a long post, but there's no other way around it, it's not a simple subject to tackle.
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Farm Products, What to Charge: Marketing, Price, Calculating Costs, Strategy and Much More

Cross-posted from beginningfarmers.org, an excellent resource for beginning (and existing) farmers.

The following is a fantastic guest article that really gives a comprehensive look at what to charge for your farm products. It provides useful information and great insights about marketing, price, calculating production and labor costs, and much more. For even more on this topic, it’s really worth checking out the excellent Farm Flows posts at www.littleseedfarm.com. Also, be sure to take a look at the links at the end of the article on marketing and price, as well as our Business Planning Page. Thanks to Scrapple for sharing his extensive knowledge on this topic!

As beginning farmers we’ve found it very helpful to interact with other beginners and share our cumulative knowledge as we all learn together. Starting a farming business is a daunting task and it helps to learn from others as we proceed down this path. One of the questions that comes up most frequently when chatting with other beginning farmers is how to price your farm products. This can be a very confusing proposition for someone with limited business experience and little financial background. Even for those with experience it can be a confounding problem. Having a background in business and economics and the experience of operating two profitable (although very small) businesses in the past, I thought it would be helpful to share an overview of some of our thoughts about pricing strategy.

What is your vision for the farm?


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