Setting up Farm business

[MTU74]

Dear friends!

hope everyone is going through tough times without troubles. I have a question for you. I’ve been thinking about what business should work under this condition and probably farming is an option. If you have any previous experience would you be able advise what specific activity is most profitable and what margin/profitability I can expect. Tbh I never had experience but it sounds like good opportunity. I would be very glad if I can find one who owns farm here to advise me or guide me through process of setting up. Thanks in advance and have a good time!

 

[MOIC]

@The Byre is preparing a You Tube video (I believe) regarding 'How To Start A Business' (or a similar title).

It may involve farming or things you may find useful.

I wait with baited breath.

My thoughts: Any business start up with zero experience will struggle. Agriculture, even more so.

Tbh I never had experience but it sounds like good opportunity.

Why does it sound like a good opportunity?

 

[2020Lawyer2020]

It is one of the lowest paid sectors in the UK by the way. Doesn't the average full time UK farmer make £10,000 a year or something like that? Obviously some make a lot more where they have a lot of very good and profitable agricultural land.

Perhaps start by reading Farmer's Weekly - https://www.fwi.co.uk/. I publish a legal publication in this field but that is more specialised so not so likely to be useful to you.

 

[Gordon - Commercial Finance]

Dairy farmers make roughly £45 a year. I worked on two farms when I was a teenager to help out my friends from school who would work before and after school every day.

Making a pittance, working 365 days a year, never taking a holiday, huge responsibility for meagre pay-off and No work life balance?

No thanks.

 

[Financial-Modeller]

My limited observations are that ownership of farms is a part of a tax-avoidance technique, and large farms are often managed by contracted farm operators who enjoy sufficient scale and position within the supply chain that an individual farmer with a plot of land to farm traditionally would struggle to compete to run a viable business.

The alternative is to have an edge, using tech / skill / resources to grow something that is in demand. Growing a couple of acres of potatoes will not make you a living though.

 

[billybob99]

Dairy farmers make roughly £45 a year.

Ouch. Not even a years supply of milk.

 

[LanceUk]

Now is probably precisely the time not to be looking at farming in the UK. Coming out of the EU and potentially losing a decent chunk of our biggest food export market while not knowing what the government are going to do to plug the (admittedly dwindling) EU subsidies - especially for new entrants - makes it a very uncertain period.

 

[MTU74]

@The Byre is preparing a You Tube video (I believe) regarding 'How To Start A Business' (or a similar title).

It may involve farming or things you may find useful.

I wait with baited breath.

My thoughts: Any business start up with zero experience will struggle. Agriculture, even more so.



Why does it sound like a good opportunity?

Thank you for your reply ( sorry don’t know your name)
Farming at least provide family with livestock, meat, vegetables so it may take you through rough time. And with crisis situation food and related business will be in demand anyway especially when borders are closed.

 

[Mr D]

Thank you for your reply ( sorry don’t know your name)
Farming at least provide family with livestock, meat, vegetables so it may take you through rough time. And with crisis situation food and related business will be in demand anyway especially when borders are closed.

It's not about supplying you with food - any decent large garden or small smallholding could do that.

It's the rest of it - bills to pay. What you end up eating cannot be used to pay bills too.

If food is in sufficient demand then like previous times it has been in demand it will be taken. You lose your entire flock of chickens one night how do you replace and how do you secure so as to not lose next lot?

 

[MOIC]

sorry don’t know your name

They call me Mr China amongst other names.

I'm actually a Brit working in China.

My name is Ron.

Agriculture - unless you have experience, I would advise against it as a business venture. You can probably buy your meat and vegetables direct from a farm, if you live near to one.

Borders won't be closed forever. (I think and hope).

 

[MTU74]

It is one of the lowest paid sectors in the UK by the way. Doesn't the average full time UK farmer make £10,000 a year or something like that? Obviously some make a lot more where they have a lot of very good and profitable agricultural land.

Perhaps start by reading Farmer's Weekly - . I publish a legal publication in this field but that is more specialised so not so likely to be useful to you.

Excellent!
I will check that video. As for the income I believe you may be right. Farming is lowest paid and labour consuming industry. My hopes that UK will need to rely on homegrown produce and taht may increase sales of local farms. Demand is always there. But I also ralize that due to less tourusts and students there is less demand.

 

[MTU74]

Now is probably precisely the time not to be looking at farming in the UK. Coming out of the EU and potentially losing a decent chunk of our biggest food export market while not knowing what the government are going to do to plug the (admittedly dwindling) EU subsidies - especially for new entrants - makes it a very uncertain period.

Thank you for your opinion. I will consider this as well.
Definitely will need to look at the farming business economy first.

 

[MTU74]

It's not about supplying you with food - any decent large garden or small smallholding could do that.

It's the rest of it - bills to pay. What you end up eating cannot be used to pay bills too.

If food is in sufficient demand then like previous times it has been in demand it will be taken. You lose your entire flock of chickens one night how do you replace and how do you secure so as to not lose next lot?

Yeah,

Not easy questions. I am currenlty living in Kuwait and you can find meat from all over the workd here except UK. Same goes to vegetables and fruits. My goal is to export more outside rathter than rely only of local sales. I do know there is seroius comptetion will be.
Then I will be developing kind of direct supply to restautants or customers fresh or frozen meat, eggs etc. I agree that if i will go to sell in local market only i won't be able to pay my bills.

 

[MTU74]

ex

My limited observations are that ownership of farms is a part of a tax-avoidance technique, and large farms are often managed by contracted farm operators who enjoy sufficient scale and position within the supply chain that an individual farmer with a plot of land to farm traditionally would struggle to compete to run a viable business.

The alternative is to have an edge, using tech / skill / resources to grow something that is in demand. Growing a couple of acres of potatoes will not make you a living though.

Exactly same thoughts. Applying new techniques, investinfg in macinery and trying new technologies may increase productivity.

 

[MTU74]

Dairy farmers make roughly £45 a year. I worked on two farms when I was a teenager to help out my friends from school who would work before and after school every day.

Making a pittance, working 365 days a year, never taking a holiday, huge responsibility for meagre pay-off and No work life balance?

No thanks.

No money but great memories left at least ) I have been working most of my life in oil and gas and believe me we have no family life in that equation. Only work. So farming could be lifestyle to be closer to my kids ))

 

[Gordon - Commercial Finance]

No money but great memories left at least ) I have been working most of my life in oil and gas and believe me we have no family life in that equation. Only work. So farming could be lifestyle to be closer to my kids ))

And burden your children with that awful responsibility when they inherit it. You will see your kids when they’re old enough to work, and then they’ll probably be in a different part of the farm because you can’t be two places at once.

You are out of your mind I’m afraid.

 

[MTU74]

And burden your children with that awful responsibility when they inherit it. You will see your kids when they’re old enough to work, and then they’ll probably be in a different part of the farm because you can’t be two places at once.

You are out of your mind I’m afraid.

I‘m sorry but I didn’t say I am going to put children in this business. There are people who will love to work on the ground.
Then I can always sell land if I am tired of farming, right.
I am afraid it is you who did quick assumptions.

 

[Opinion87]

Apparently putting three laughing faces as a reply isn't valid.

 

[MTU74]

Apparently putting three laughing faces as a reply isn't valid.

 

[Mr D]

ex

Exactly same thoughts. Applying new techniques, investinfg in macinery and trying new technologies may increase productivity.

True.
Been working on a farm project for a couple of years now, quite labour intensive though also very productive in cubic production depending on product.
But mine is 15 stories high and uses a lot of energy.

Very much oriented to local production.

 

[The Byre]

My video still ain't done - too many other duties to perform!

Farming - it is a fantastic way of life and strongly to be recommended - BUT

I hope you can weld, because when that plough-sheer breaks, YOU are going to have to get that large electric-arc welder out of the workshop and fix it.

I hope you are a Diesel-fitter, because when that tractor breaks, you are going to have to fix the thing. The cost of getting a tractor repair shop van to your farm can run to a couple of thousand.

I hope you have a good understanding of hydraulics, as the digger, the tractor and many other bits of machinery work with hydraulics.

I hope you know how to put up a barn. Unless you pay someone to do that for you - and they can cost as much as a house - it's up to YOU to put the thing up.

Come to think of it, I hope you have a reasonable knowledge of all the various building trades from sparky to carpenter, from brickie to roofer. Farms have loads of buildings and they all seem to need fixing all the bloody time!

I hope you know how to put up fencing and have all the tools. Ain't nobody gonna do this for you - unless of course you pay a fencing company.

I hope you know how to plug tyres for all those times you will puncture an £800 tractor tyre because 50 years ago, someone left a nail in the field!

I hope you don't need too much sleep or go on holiday. Them cows want milking at 4am and at 4pm 365 days in the year.

Remember that YOU are going to have to stay up all night during lambing season (just gone).

I hope you can fill in all the paperwork that the government will throw at you. Trust me, it is more than for just about any other type of business!

I hope you are fully conversant with the thousands of laws, rules and regulations around farming.

I hope your wife is really good at first-aid for when your arm gets ripped off by the bailing machine - farming is one of the most dangerous occupations!

I hope you have the money to buy a farm - being a tenant-farmer is seldom viable today.

Last, but by no means least, I sincerely hope that you actually know how to farm! Most young farmers today enter the business after studying agriculture.

 

[MOIC]

I have a cunning idea (or plan) . . . . .

Hydroponics.

 

[The Byre]

Lots of science involved in hydroponics! And that has to be the most labour-intensive way to farm, though the need for vast acres of land is no longer there. A few acres should do it, but you will need loads of building - polytunnels won't cut it! And that means planning permission and loads of money to build all those greenhouses.

You, however, build up slowly - one acre and one large greenhouse and develop your know-how and learn that way.

 

[MOIC]

The OP can start in his shed (If he has one).

First stage is to learn how it works and what's involved (6 months to a year).

Second stage is to expand as his funds allow.

It's doable, but like any business it needs knowledge, experience, funds, supply chain, buyers, manpower, patience, an understanding wife and so on and so forth.

 

[LanceUk]

Importantly, make sure your wife and children will love it, too. OK - you said you won't put your kinds into it, but your wife will need to. My partner grew up in the country and her best friends were farming families; she used to help out (mainly lamb farms). We decided to buy a small holding where a farmer would run sheep on our property in return for some maintenance while she was going to tend to a small cropping operation and keep a few chickens. The idea was not to make money as a living, but make enough to have the thing pay for itself.

She was really looking forward to it; as were the kids. For the kids, the novelty of collecting eggs wore off pretty quickly and my son quickly lost the zeal for hopping on the ride-on. We only had 13 acres and the amount of machinery required for two people to just keep things under control was mind boggling.

The wife also learned pretty quickly she wasn't born for "the good life".. she admits she is more Margot and none of Barbara. We made more from renting out the 1 bedroom studio than anything else. In the end, we sold it... Thankfully we broke even (including sale costs) but it took a long time to sell and in that time you have to keep the place pristine.

As @The Byre says, there is a lot one has to do oneself if they don't want to go bust. You don't have to know it all when you start, but you have to be prepared to work hard and research.. YouTube was a life saver for me.. Sometimes, the bank balance had to take a hit..

Farms can provide multiple income streams... Learn to use them because you will need them all.

You'd be pretty brave to start with too many types of animals and different crops.. Research your market - what are different animals and meats going for, for example - and what has been their trends over different time frames. Also look at commodity futures - what looks like giving the best future return. And then put together a plan.. where, what sort of land you need, how much to make it viable, what cooperatives are there, etc. You will learn to become a lot more self sufficient in maintenance, etc. However, rural communities can be close and things can be bartered. I never received cash from the sheep farmer who used a lot of my land, however, I was furnished with the odd butchered lamb. I also provided some computer troubleshooting skills for a fencer to show my how to fix a fence.

I agree - tenancy is not a great way to go.. Even if you can make a living out of it, and you would have to be doing something very well on the farm to do it, the land lord may not extend the tenancy and receive the future benefit of your hard labour...

 

[JEREMY HAWKE]

I could probably sell some cows to you I had sold them to @MY OFFICE IN CHINA
We thought they were South Devons but the vet said they were not only cross bred but inbred too . So here we have it

I live in the middle of Devon where farming is proper !
There is no way that I would want to run a farm ,
No possible way !
There is no money in it and you have to work like a dog !

 

[Mr D]

I have a cunning idea (or plan) . . . . .

Hydroponics.

Indoor work with no heavy lifting or bending over.

 

[Mr D]

Lots of science involved in hydroponics! And that has to be the most labour-intensive way to farm, though the need for vast acres of land is no longer there. A few acres should do it, but you will need loads of building - polytunnels won't cut it! And that means planning permission and loads of money to build all those greenhouses.

You, however, build up slowly - one acre and one large greenhouse and develop your know-how and learn that way.

How about converting existing buildings? No need for loads of building - hydroponics is cubic not square footage.
Greenhouses? Whatever for? 18 hour (or whatever works best for that plant) light for growing per day. Lights, not glass panes.

 

[gpietersz]

Local farmers where I live do work hard and they have little flexibility - they cannot have any kind of holiday without arranging for someone to do t.

Those with farm shops are doing very well at the moment.

I know one had a bad patch.

Now is probably precisely the time not to be looking at farming in the UK. Coming out of the EU and potentially losing a decent chunk of our biggest food export market

On the other hand it also potentially removes a decent chunk of imports so less competition in the UK market.

A lot is going to depend on politics post Brexit and post coronavirus (I think we got a lesson about relying on global supply chains).

 

[The Byre]

Dunning-Kruger syndrome in full swing there - @Mr D!

 

[Mr D]

Dunning-Kruger syndrome in full swing there - @Mr D!

No, merely a long term project based on years of research and practical small scale experience.
Labour intensive - a 15 storey farm would require minimum of 6 staff over 7 days working a 40 hour week plus two staff running the nursery which can be mon-fri.

Will we ever have any 15 storey (or similar size) buildings in our towns and cities empty at any point in the future? Will locally sourced (say a couple of hundred metres away) fruit and veg be a selling point for any other type of business as compared to importing it from thousands of miles away?

 

[CVRO]

Most new farmers are happy twice.
When they buy the farm and then when they sell it.

 

[John D1994]

Farming itself is tough to buy into if you're planning to make all your money from what you grow and rear on a small scale.

Maybe look at setting up a shoot on the land if you already have access to it? Game shooting is a massive market in the UK, plenty of money to be made with a good setup, although very hard work to start from scratch. You would also need to see who owns the shooting rights for the land.

 

[Gordon - Commercial Finance]

Maybe look at setting up a shoot on the land if you already have access to it? Game shooting is a massive market in the UK, plenty of money to be made with a good setup, although very hard work to start from scratch. You would also need to see who owns the shooting rights for the land.

That would be nice. OP is in Kuwait though.

 

[MOIC]

I could probably sell some cows to you I had sold them to @MY OFFICE IN CHINA

OYYYY! Keep your muddy paws off of my Devon Cows!

I've already started marketing the milk to some big supermarkets.

I think we are onto a winner!

 

[Mr D]

That would be nice. OP is in Kuwait though.

Turkey shoot of Republican Guard? No wait that was a couple of decades ago and had to be in the military to get a pass.

 

[John D1994]

That would be nice. OP is in Kuwait though.

Pheasants flying off sand dunes could be interesting....

 

[Gordon - Commercial Finance]

Pheasants flying off sand dunes could be interesting....

I could get on board with that....

 

[Stas Lawicki]

Having grown up in the Welsh hills on an old farm, in the middle of a farming community, I can give you my top things to think about (pastoral) :

1) Get used to death of animals. Everything from the rats and vermin control needed, to big bloated cows in a field that need dealing with. On a big farm you'll come across it every day. If you are at all squeamish, don't like smelly things or would rather not have to deal with decaying meat, give it a miss. You'll see animals die in front of your eyes and will have to deal with sick and lame ones. 'Where's there's lifestock, there will be deadstock'

2) As others have said, there is no rest bite (or very rarely). It's full on, all day, every day. If you get ill, tough. If you are cold or tired. Tough. You do your jobs or animals will die and you have no income.

3) The weather determines a lot of your activity but sometimes you cannot predict if it will go your way or not. Getting hay down, turned and bailed in the summer is critical for feed and bedding. Go for silage twice a year and you'll be flat out mowing, collecting/bailing, spreading/fertilising and repeating. Again, big farms get contractors in and it quite often is a race against time, trailer loads of grass being dumped by one tractor and raked into a shed or pile by another.long, tiring days, even behind the wheel of a wagon.

4) if you can't drive or are not confident around machinery, you'll need to learn quickly. Reversing a laden trailer or stock box in the rain through a narrow gap is an art form. When you break down (and you will), it's best if you are handy on the tools to get going again. Farm rescue or contractors do exsist but they are expensive and delay things whilst you wait.

5) You'll either have a faint smell of sheep/cow sh@t, or a strong one. It gets everywhere. All over you, your dogs, your car, bobcat, loader, tractor, kitchen. Everywhere. All the time.

6) It's expensive. With EU subsidies about to be turned off, you'll have tiny profit margins. Modern tractors are a fortune. Big sheds are realitively expensive too. Then there's vet's bill, power, water, general living, feed, fuel, heating, consumables, insurance, on and on. There is a reason why many farmers take their lives each year.

Having said all that... (there is a lot more), you might be lucky. Perhaps you're a squillionaire and can pay somebody to run it all for you, and you can concentrate on laughing with folk in your farm shop as you serve organic sausages. Perhaps you'll go arable (don't really know anything about that) but it has to be big to support a good income.

You'll spend your time in the open air, free from offices BS, free from town traffic and sometimes alone in beautiful countryside. It's rewarding and will keep you fit. Youll most likely have a completely different view on life if you did it.

My advice would be to go and be a farm labourer for a year. Not just the summer months lobbing hay onto a wagon, but through the winter too. See how others do it. See what you like and dislike about it.

Don't be taken in by the nonsense you see on TV. Most farmers don't have the time to faff around building yerts for yuppies or spending £50k on some nonsense fad that they then go and talk to people about at a book launch. Your life will be farming. There will be no 'I run a farm part-time'. I laugh at these programmes that have folk running around in their hunters (no self respecting farmer would wear that crap) and smart shirts, taking people on shoots or talking about new initiatives to do x y and z. It's tough work for the vast majority. It also helps if you have a few kids to train and give a hand!

Sorry - long post but hopefully helpful!

 

[Socio South West]

At the back end of 1994 a wicked easterly gale blew a 6 in stream of liquid molasses onto my legs and down into my wellies.... at that point I decided enough was enough and comfortably before my 40th birthday I gave notice to quit a mixed dairy and arable tenancy.

At the time the era of fixed markets was coming to an end.... I did extremely well out of the break up of the Milk Marketing Board, and also the fact that on the day my milk quota was valued it was at the highest point it ever got.

So many of my farming friends thought I was mad at the time.... within a year of me quitting in September 1995 the same friends regarded me as a visionary and I commanded considerably more respect as a result.

There are two ways to make a modern farm business succeed:

1) Make it big enough that the low margins will cover the fixed costs involved, and consequently strive hard to keep fixed costs down. However - be prepared to think 500 acres/ 250 cows / 1000 sheep etc as being small.

2) Develop niche or direct markets through such things as tourist or educational spin offs. A good Farm shop, especially self supplied, is an excellent way to retain some of the mark ups made as your produce passes along the chain to the consumer.