Is it still possible to start a farm?

Tuesday, September 26, 2023

'Don't let anyone tell you that you can't do it.'

By Emily Croft

Starting a business in any industry is a challenging endeavour. In agriculture, entry costs, land competition, and time constraints can make it difficult for newcomers to build their own farm from the ground up.

How are new producers managing the challenges of starting their farm businesses and what are they doing to stay competitive?

Better Farming spoke with farmers who have started their operation about what it is like to run a first-generation farm, and how it has shaped the way they manage their business.

Getting started

For many new farmers, knowing where to start can be the hardest part.

Julie Higginson and her husband Ethan run Higginson Farms, a cow-calf-to-finish and freezer beef business near Meaford.

While they both come from a farming background – Ethan is from a small beef and sheep farm and Julie grew up around her family's apple orchard – they have worked hard to build something of their own.

"We have both had a lifelong passion for farming and knew we wanted to have a farm business of our own," says Higginson.

"In high school I did a co-op with a beef farm and I really enjoyed myself there. When I met Ethan, he had just started buying cattle with his parents and I kind of joked around that I wanted to buy cattle too."

When Julie and Ethan began looking to expand their herd, working with established farmers who were looking to slow down gave them an opportunity to grow.

"We started cold-calling farms that looked like they weren't being farmed and getting some hay ground that way. We also made a deal with a local farmer that wanted to sell his cow herd. We bought the cows and some equipment and took on some of his hay ground.

"We wouldn't be half the operation we are now without the opportunity given to us by that farmer."

Daniel Chiappetta, a cash-crop farmer from Guelph, is celebrating harvesting his first crop on his own land this year.

Chiappetta has been growing corn, soybeans, and wheat for 10 years.

"I didn't grow up on a farm. One year I worked a summer job on a pumpkin patch where I was exposed to working outside, small farm machinery, and overall crop production," says Chiappetta.

"That was my inspiration. The opportunity came from renting land." Chiappetta attended the University of Guelph for Agriculture Business after his time at the pumpkin patch, knowing that jobs in agriculture were abundant and that he'd enjoyed learning about crop production. He then began looking at how he could start his own farm.

"It was actually perfect timing – the pumpkin patch I was working on as a teen ended up closing down, and I was able to rent that land," explains Chiappetta.

"The first time I grew soybeans, I didn't really know anything, but I knew cash crops were my best opportunity to get started. I could hire someone to look after the crop, and I just had to worry about funding those input costs.

"I went a few farms over and asked some neighbours if I could rent their farm. They kept saying no, until one year they said yes. Because of my model I can technically take land anywhere, but I like to stay within an hour drive of home in case anyone needs a hand."

James Wilson and his wife Emilie run Wilson Acres Farm, a sheep farm in Arrowwood, Alta.

"Our farm essentially started because we wanted to have our own thing and we wanted to justify being on an acreage. It makes the price tag a bit easier," says Wilson, who also manages a feedlot and has a long history with agriculture.

"I've always worked for large farmers, and I've always wanted my own thing. It's nice to have the shiny equipment and manage vast acres, but it's even better to have something that is your own."

When deciding what to farm, the Wilsons ruled out grain farming because of the capital investment and they needed livestock that could be easily handled by both of them. This led them to acquire their 200 head of breeding ewes.

"The next challenge was how were we going to start the farm. We looked at FCC and AFSC for young farmer loans, but unfortunately those are geared to people already farming and who have collateral to progress their business," explains Wilson.

"We came across the Canadian Agricultural Loans Act (CALA) and we got our bank manager to look further into it. You can get a loan through the government and the bank to assist with start-up farms.

"We structured our loan to purchase handling equipment and breeding stock. We got our ducks in a row and made sure our business plan was sound."

Minimizing upfront costs, working with established farmers, and acquiring loans are a few ways that new farmers have managed the initial hurdles of starting a farm.

To continue to farm, it may be necessary to take a unique approach to production compared to established farms.

A different approach

As new farms grow, producers may implement unique management practices or business strategies to remain competitive at a smaller scale.

The Higginsons started selling freezer beef in 2018 and expanded that portion of their business in 2020, aligning with the high demand for local food that came with COVID-19. This strategy allowed the Higginsons to capture more of the value-chain than a traditional cow-calf operation.

"We started selling beef to family and friends in 2018. Once COVID hit, we decided this side of the farm business was something we wanted to grow on. It helped with cash flow and added more value to our calves," explains Higginson.

She also says that being a first-generation farm has forced them to focus on what they are good at.

"It's so easy to get distracted by farming opportunities and you can get stretched thin. It's important to do well at what you're doing before getting into too many ventures."

Chiappetta's approach to growing his farm was focussing on rental land and hiring custom operators to manage the crop.

"My arrangement is pretty unique. I don't have any large-scale equipment, so I work with custom operators," says Chiappetta.

"It seems to work for me from a scaling perspective because all the costs are per acre, whereas with equipment you now have a per unit cost.

"You can pick up acres quickly without huge capital cost, but the downside with custom work is that you tend to be bottom of the list because they like to do their own work first."

Chiappetta also says he hasn't inherited habits that might be passed between farmers on a multi-generational farm.

"I don't have bad habits – I don't have to do something just because it's the way Dad did it. But I also make expensive mistakes. I don't have anyone to say 'we tried this in the '80s or '90s and it didn't work."

Wilson Acres Farm takes a similar approach to Higginson Farms by producing an added-value animal on their sheep farm, as well as using intensive production to keep efficiency high.

"You have to wear many hats as a farmer. You have to think of everything and be that entrepreneur," says Wilson.

"We just started a pedigree flock of Texels. It's a breed we want to introduce into our commercials to produce better meat-carrying carcasses for lambs.

"We direct-market lamb and sell cuts. We get a few processed and cut up to have stock in the freezer. Through different connections we have regular customers that come back every month or so."

The Wilsons also sell some lamb direct to restaurants in Calgary as whole carcasses.

"For restaurants, it's all done by rail weight and carcasses because they do their own processing. It comes with its own set of challenges."

With their intensive management, the Wilsons stage their rations to ensure that their lambs hit the right weight at the right time to match the demand of the restaurants.

"Some restaurants will pay a premium for our product because of consistency. That little bit of extra work is just managing it correctly."

Challenges & goals

Farming is never an easy career path, but starting a new farm presents additional challenges. It also comes with unique opportunities.

"The biggest challenges for us are definitely cash flow – it costs a lot to start up a farm and continues to cost a lot to keep it going," says Higginson.

"And when you're relying on all rental ground, it's hard to plan for the future. Even if you have a contract, it doesn't necessarily secure you at all. It's definitely a challenge, but rental ground is also a huge opportunity."

Julie points out that many established producers are willing to help newcomers – which can include taking back a loan for cattle or equipment, and leasing farmland to get an operation started.

"There is a lot to be gained through these relationships, like years of farming and business wisdom. If you can work with a farmer who's willing to help you out – that's huge."

As they continue to grow their business, the Higginsons hope to buy a farm of their own.

"Our main goal is to be able to buy a farm so we have a home base. We have lots of goals but that's the main one," says Higginson.

The challenges experienced by Higginson Farms also reflect Chiappetta's experience.

"I would say the biggest challenge has been sustainably growing the farm – adding more land without having to invest heavily in capital," says Chiappetta.

"Most farmers like to stay close to the home farm because of equipment. My opportunity is that I'm willing to go an hour or so away to build a land base."

When asked what he would do differently, Chiappetta says, "I would absolutely change nothing. Everything has worked out.

"I'm excited for the next 10 years because I can feel that momentum behind me now.

"To those looking to start farming, I would say don't let anyone tell you that you can't do it," says Chiappetta.

"I remember when I was getting my pesticide licence 10 years ago and there were old farmers laughing at me saying, 'Was your daddy a farmer? Then you'll never be a farmer!' and I wish they could see me now."

James and Emilie Wilson have also found cash flow, as well as time availability, to be big challenges while starting a farm.

"Cash flow has been tricky, especially when you first start out. In that first 18-month period, you essentially aren't making any money until you sell that lamb crop," says Wilson.

"The way we overcome that is to custom-farm sheep for another person. We charge a yardage fee and that gives us the cash flow to help with feed or medical expenses."

Wilson would encourage anyone who wants to farm to go for it.

"I've always farmed my whole life and wouldn't change it for the world. There are hard days, but the good days always outweigh the tough." BF