Considering alternative agricultural enterprises

by Stephen Wagner
Penn State Extension Educator Andrew Frankenfield from Pennsylvania’s Montgomery County is a sixth generation farmer. Living in an area that continues to see development and changes to landscape use, Frankenfield wonders, like many people, “Why we are doing what we’re doing.”
“Maybe,” he said, “there’s an opportunity you could pursue on your farm to help with that cash flow issue. My goal today is to get you to think about how to make decisions and recognize what options are out there.” Before looking at other alternatives, he said that maybe there are ways you can expand or improve your current operation. It isn’t always about taking on a new enterprise. Maybe it simply involves specialization or more focus, lest you spread yourself too thin. Frankenfield’s advice: “Stick with what you know.”
“Look to improve your efficiency, reduce your costs and limit yourself to those few activities that you know and that you can improve on,” he stated.
Another thing you can do is to intensify, get more specialized equipment and adopt some new technologies that make you more efficient. Understand that if you want to expand, you should first define expansion. “On my property,” he explained, “we drilled a well last year, a big step for me. It didn’t expand acres, but we grow more efficiently on the acres that we have.” Diversification is an option worth study. That could entail risk reduction and amortizing risks over different types of crops. Using the high tunnel as an example, Frankenfield said “you can work in there when it’s damp or raining, but you still have time to do these tasks even though they might compete with time you have to be in the field.”
Diversification can also take you outside of agriculture. “I know some farmers who have rental properties – apartments, residential or even commercial. It has helped tremendously with cash flow in one family I know.” It is something to think about when the ag economy is sluggish.
Integrate! How much risk and/or debt are you willing to take on?
Network! Share equipment with other farmers.
“Agritainment” seems to be expanding as a revenue source. “We see more of this in my area – folks want to come to the farm to have the experience, because they are not connected to the farm anymore,” he said. “They like to see it but they don’t understand it. They’re happy to drop $20, $30, $40 to come to the farm for a corn maze, or a wedding in the barn or to pick strawberries. The possibilities are out there.” Frankenfield added he never thought he’d be a flower grower, but “people love to go and cut their own flowers.”
In 2004, the farm in Lancaster County that was used in the movie “Witness” opened up to the public to celebrate the film’s 20th anniversary. The Amish Experience, a promotional group, would ferry tourists and curiosity seekers to the property to see the farmhouse and the barn where Harrison Ford dispatched the evil-doers. The farm had changed hands since the actual filming, so the anniversary celebration lasted only that summer. Many thought it should have stayed open permanently because the business never really let up during that time. However, the new owners were glad to return to privacy.
Apples can be a profitable yield for farms thinking of diversifying, as well as wine grapes, which more than a few farms have successfully undertaken. “The key is do you enjoy it?” Frankenfield asked. “You have to want to get up in the morning and do this, because if it’s a drag, it isn’t something you’re going to want to stick with.”
Does your family buy into it? That’s another consideration. Doing your homework ahead of time is also a key factor. Find out what you might be getting into. It might be as easy as researching online so there won’t be as many surprises awaiting you. You might want to include an ag extension in your search. Do you want to learn about sweet corn, for example? Learn about different types of crops. Get involved with the appropriate ag organizations that can help you. Try to attend events like Farming for Success. Talk to other growers about it. “You can read about it but until you talk to other people, you might come up short,” he said.
Learn about the zoning in your area. “Can you put a roadside market in? Are you able to expand into whatever enterprise you want to? Townships can be one of the biggest hurdles you have to deal with,” Frankenfield said.
Commitment can be another issue you have to reconcile before you begin whatever project your heart is set on. As for funding, do you have Farm Credit or other funding sources? How much money can you commit? More importantly, how much time can you commit to it? What is the market? How will you market your product? Answers seem to spark more questions. Is it a growing market or a shrinking market? For example, veal consumption is going down but lamb consumption is going up. “Don’t get into a dying market,” Frankenfield cautioned. “Get into a growing market.”
This is not a “buy low, sell high” proposition. Talk to your lawyer and/or your accountant. Have an insurance broker, not just an insurance agent – somebody who can look at the big picture and say “here are the best insurance options for you.” Frankenfield also advised having a mentor, “somebody you can turn to who is already involved in that enterprise, someone you can bounce ideas off of and someone who is not likely to be a competitor.”
He also mentioned a SWOT analysis – looking at the factors that affect your business: strengths and weaknesses inherent in this enterprise, opportunities that you have and knowing the threats to this business.

2018-08-20T07:44:49+00:00August 20th, 2018|Mid Atlantic|0 Comments

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