What Should I Do With My Land?
By Paul McKenzie, Ag Extension Agent (email@example.com)
[Author’s note, July 2016: For a more up-to-date take on this question, read this]
Usually at least two or three times a year I am presented with a scenario something like this: “I have just purchased/inherited/won-in-a-poker-game a farm in Vance or Warren County of (insert number between 5 and 150) acres. What can I do to make it profitable?” Here’s my best thinking on that question (putting aside the issue of whether I’m the best person to ask in the first place).
1. Don’t quit your day job.
2. There are various enterprises that could generate some supplemental income for you on small acreage (e.g. 5 to 20 acres).
3. Start small.
4. Expect (and PLAN for) a few years of losses before you turn a profit (just like any small business).
5. Don’t invest money that you can’t afford to lose.
6. If you’re considering some type of “pick-your-own” operation, be warned that you will likely do most of the picking yourself.
7. Don’t plant the first seed until you have done EXTENSIVE research on production, post-harvest handling, and any required processing.
8. For wholesale markets (e.g. restaurants, florists, grocery stores, salsa makers, brokers), conduct extensive interviews with many potential buyers before planting.
9. If you have large fields (e.g. 20+ acres), it may be best to simply rent them to a farmer. Here’s a document that shows average rental rates: http://www.ncagr.gov/stats/economic/2009CashRentValues.pdf
10. Don’t invest money you can’t afford to lose.
If I personally had a few thousand dollars to risk, 10 acres of open land, plenty of water (pond or well) and lots of free time on evenings and weekends (i.e. lightening struck and I gave up fishing), I would look at one of the following (starting with maybe 0.25 to 2 acres, expanding later):
-Cut-your-own Christmas trees
-Blueberries (maybe, highly perishable and time-consuming to pick, but easy to grow)
-Pecans (although risky due to late frosts, but have you seen the price at the grocery store?)
-Catfish, cage-culture (if I had a suitable pond already on-site, and I was able to work out processing/transport)
-Medicinal herbs (for wholesale buyers)
-Brocolli (if I could work out inexpensive cold storage)
-Cutflowers (if there was sufficient demand from local florists)
There may be a livestock enterprise that could be considered (goats? rabbits? guinea pigs?), but I’m the wrong person to ask.
I also think fresh produce could be considered for someone who could invest more time and had the right location. I would define “right location” from the standpoint of proximity to markets (e.g. fancy restaurants, small/specialty grocery stores, well-established farmers markets with a solid customer base). A roadside stand might work in a VERY high traffic location.
Things I would NOT consider (and the reasons) are:
-Strawberries (expensive to plant, time/labor intensive, and highly perishable)
-Blackberries (highly perishable, time-consuming to pick, elaborate trellis system)
-Wine grapes (already plenty of supply/competition)
-Bedding plants or shrubbery (already plenty of supply/competition)
-Truffles (profitability unknown)
-Hops (less than ideal climate)
-Cherries (unsuitable climate)
-Anything that requires a large, heated greenhouse (high cost to build and operate)
(Note: Just because I wouldn’t consider the above doesn’t mean you shouldn’t since your resources, assumptions, risk-tolerance, etc. are different than mine).
If I did NOT have all of the above ($, water, time), I would try to rent the land to a crops farmer, or convert it to forestry. Actually, I would definitely convert to forestry, but that’s a personal bias. I love forestry, and you might get cost-share for planting, or possibly even annual rent through the USDA Conservation Reserve Program.
If I had LOTS of time and LOTS of money to risk, the answers above would change significantly.
Note that researchers at NCSU and other organizations are looking into biofuel crops, and these may be a viable option in the future (I’m guessing a few years from now).
I often get questions about sources of financial support to start a new enterprise. However, I think a better strategy is to first develop a small functioning enterprise with your own resources.
That being said, here are the grant and loan programs that I’ve come across. There are limited competitive grant programs that provide partial funding for innovative enterprises (e.g. USDA-SARE and RAFI-USA). Also, there may be loans available through USDA. Furthermore, the NC Rural Economic Development Center operates a microenterprise loan program. And of course, loans for land, equipment, and operating expenses are offered by commercial lenders and farm credit corporations.
Again, with most of these potential grant/loan sources, I think the odds of receiving funds are vastly improved if you have an existing operation and need a small boost to take things to the next level (as opposed to providing funds to cover the majority of start-up costs for a new enterprise).
I am always happy to schedule an appointment and/or site visit with landowners in Vance and Warren Counties to discuss the specifics of your situation.
Oh, and one more thing. Don’t invest money you can’t afford to lose.
NOTE: These are my personal opinions, and I do not claim any of them to be sponsored or endorsed by NCSU, N.C. Cooperative Extension, or anyone else. Further, these comments are intended to be applicable only to Vance and Warren Counties in NC, USA.
Posted Oct. 13, 2011
Updated Nov. 28, 2011 (Added info. about NC Rural Econ. Dev. Ctr. microenterprise loans)
Updated Dec. 20, 2011 (Revised section about financial support to suggest starting an enterprise first. Also added sentence about commercial lenders)
Updated Jan. 4, 2012 (Added sentence about roadside stands, and sentence about potential funders providing a boost to an existing enterprise as opposed to start-up costs).