How Much Does It Cost to Start a Farm In 2024?

In this modern world where there are extremely lucrative industries and ever-growing markets, farming might look like it’s outdated and is not worth the effort.

However, this is not the case all the time, as starting a farm is generally cheaper and easier than most other businesses out there, and it has a constant market need. That’s why starting a farm could be a great idea if you know how to run it.

However, as the first step to having a farm, you must know how much it costs to start a farm if you are serious about it.

There are quite different costs associated with opening a farm depending on several factors.

In this article, we will discuss the average cost to open a farm and other details surrounding the costs of starting a farm.

How Much Does It Cost to Start a Farm
How Much Does It Cost to Start a Farm

Average Cost to Start a Farm

There is a variety of farms, from small ones to very big ones, and each farm’s costs go up with more additions you make to it.

However, if you are just getting started and don’t have very big plans, you can expect to spend anywhere between $600 to $10,000.

This number could hit even $1 million if you want to have a large farm and go for the corporate level.

In addition, while you are starting a farm, you have to account for two types of costs, just like in any other business.

The first is the start-up costs. They are generally only one-time fees and are not recurring.

The second one is recurring costs that only start coming in after you start your operations, and you have to pay them on a recurring basis. 

TypeCost
Farmland$150-$10,000/acre
Equipment$700-$1,000
Machinery$1,000-$10,000
Livestock (if applicable)$2000/animal
Soil Preparation$400/80000 plants
Utility Installation$1000/acre

Most of the costs depend on your farm size and how much of what you want for each staff. The biggest cost drivers in any farm are real estate and machinery equipment.

Additionally, even though these costs are mostly one-offs and are not recurring, some of them will determine how much you will pay in recurring costs later on.

For example, if you rent the farmland, your monthly costs will probably be lower than if you buy the farmland and pay the mortgage each month.

You have to pay attention to the start-up costs to ensure that you make the most viable choice while spending on the start-up costs.


Factors That Affect the Cost of Starting a Farm

Factors That Affect the Cost of Starting a Farm

Though the type of costs generally does not change much, the amount of costs changes depending on many factors.

These factors for starting a farm play a crucial role in how much pay for each type of cost.

If you know these factors well, you can make decisions based on these factors and economize on your costs while keeping the same quality.

Location

Each state, county, and region has different types of expenses, license needs, and costs for real estate and equipment.

If you are in an expensive region, almost all your costs will be more expensive than average, meaning you will have to put more on top of your products in the sale price to make a profit, or you’ll make less profit or lose money.

Size

The bigger your farm, the more equipment, machinery, seed, and other things you will need. Additionally, the maintenance of the farm will be harder and will require more labor and time from you or from your employees.

That’s why you have to try to find the most optimal size for your farm to keep your expenses at an acceptable rate.

Equipment and Machinery Quality

When you are making the initial purchases, it is easy to go for the cheapest option for the equipment and machinery.

This cheap equipment might be favorable at first, but it will have higher maintenance costs, and the maintenance need will be more frequent.

Try to buy equipment and machinery that is not too expensive in price but also not too cheap in quality.

What’s Included In The Farm

Your farm could have various things, such as animals and plants together or just plants or just animals.

The more things you add to your farm, the higher the costs will be, also damaging your income from your farm.

Try to take things step by step and start with the cheapest option available and then add more as you grow your farm.


Type of Farm Businesses

Type of Farm Businesses

We mentioned that the cost to start a farm also depends on the type of farm and what you focus on.

You could focus on more than one type, but you could also choose to be a farm of just one type.

This makes a huge difference because then you need to consider the costs of all the types you want to have.

Dairy

Dairy farms own animals, typically cows or goats, and focus on the production of milk. You can have just one or tens, hundreds, or even thousands of animals on your farm.

You will need special equipment for drinkable milk that complies with government guidelines.

Crop

Crop farms are focused on growing stuff like fruits, vegetables, or grains. It focuses on the things that feed people. You could sell these things either at a farmer’s market or co-ops.

Poultry

Poultry is mainly for meat purposes, with chicken and turkeys mostly, but they can also provide eggs in addition to the meat.

Flower

These farms supply flowers for florists to sell. Even though the main buyers are the florists, selling to local grocery chains or farmers’ markets is also possible.

Vineyard

Vineyards require a special type of soil, and you can’t have these farms everywhere you want, only in special places in the United States.

These farms focus on making grapes for wines. You could sell your end product to winemakers or at a small farm market.

Hay

Similar to crop farms, hay farms focus on growing hay to feed the livestock. They generally require heavy and expensive equipment. But hay farming can be quite profitable.


Getting Financing for Farm

Getting Financing for Farm

Even though starting a farm is much cheaper than starting most other businesses, you might still need financing for it.

Luckily, there are several options that you can try to get financing for your farm. You can choose the best suitable one for your individual situation and make the best out of it.

Crowdfunding

Farming communities are generally strong, especially if you are living in a small area where you know many people.

That’s why the new farmers wanting to start their own farms can go the crowdfunding way and get the necessary funding through their community. Crowdfunding is a method to raise money from friends, family, or a community.

USDA/SBA Loans

The U.S. Department of Agriculture offers a variety of different loans to farmers wanting to start their own farms.

They even have special loans for beginners to help them get started. Small Business Administration also offers some special loans that help farmers to start their own farms.

Grants

If you don’t have the crowdfunding option or can’t find any USDA/SBA loans, you can search for grants given by the government or some non-profit organizations.

These help focus on giving the farmers what they need to get started with their farm through either grants or sometimes loans.


How Much Does a Farm Make?

How Much Does a Farm Make

It’s quite hard to come up with a concrete and net number about how much a farm makes because of many variables.

The geography, what you are offering, market demand, and many other factors affect the overall income of a farm.

According to Zippia, the average annual farmer income is between $13,000 to $71,000.

This number doesn’t show the revenue numbers but the net profit a farm gets once you remove all the expenses and taxes.

However, as we mentioned above before, if you are running a larger farm and have many different offerings, then this number could go well above $100,000 annually.


Conclusion

Farm businesses might seem outdated in this growing economy, but they could actually be quite lucrative things to own and run.

The average cost to start a farm is between $600 to $10,000. If you are looking to start a bigger farm and not a small or mid-sized one, then it could be well over $1 million.

Many factors affect these costs, such as the location, type of farm, size, and quality of the equipment and machinery.

As a farm owner, the average money you can expect to make is between $13,000 to $71,000. 

Looking at the numbers and the expected revenue, a farm is quite lucrative if you know how to run it. However, before investing the money, you must know whether farming is profitable or not.


FAQs

Can everyone start a farm?

Farming requires a lot of work and experience in the industry.

Technically and in regard to laws, anyone with the necessary permits and licenses can start a farm. However, it will be hard to succeed if you don’t have the experience.

How hard is it to run a farm?

Farming has many different aspects, and you have to know how to treat plants and animals the right way.

It requires distinct work and focus on what you are doing. That’s why it’s quite hard to run a farm successfully and profit from it.

How much should I expect to spend when I start a farm?

If you are looking to start a small farm and not something big, the expected average costs are between $600 and $10,000.

However, this number could go as high as $1 million with big farms. It depends on the number of machinery, equipment, labor, and inventory.

Sources

https://www.fastcompany.com/40458330/what-does-it-cost-to-start-a-new-farm

https://www.starterstory.com/ideas/agriculture-farming-business/startup-costs

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