Farming has not been for the faint of heart the past few years. Depressed commodity prices combined with steady cash rent levels have made margins tight. Turning a profit has been a challenge for even well-established farmers.
So how are young and beginning farmers supposed to even have a chance to get into the business? One option may be niche markets.
Historically, niche markets have been farmer-driven. More recently, however, consumers are becoming increasingly interested in how and where their food is produced. Landowners — especially those who inherited the farm but live a more urban lifestyle — are looking at more options regarding food production. Their increased awareness means an opportunity for farmers and landowners to raise a niche crop.
Think produce. Sweet corn is a good example of a niche market in Illinois that has provided good income to farmers who have a limited land base but are able and willing to provide extra labor. Pumpkin patches and Christmas tree farms are also popular examples of successful niche markets.
The goal with niche farming is to add value through additional labor and care to produce a product that consumers want. Niche farmers often increase revenue per acre and create a good living on fewer acres.
Go organic. Landowners are often the ones starting this conversation. Generally, they want to know how organic crops could be raised on their farm and what the returns would look like compared to conventional crops. My job is to help them navigate the transition process, and to connect landowners with farmers who are willing to give organic a shot.
The current overall economic strength of the U.S. economy has provided a nice opportunity for better returns on organic for both farmer and landowner. It requires, planning, precision, timing and effort, with a focus on good communication and attention to detail. Younger farmers can bring value to the relationship because they’re willing to learn new production practices and provide additional labor.
Consider niche commodities. Other opportunities include non-GMO crops, seed crops or small market crops. Landowners like the premiums that add to the bottom line, and in some cases, their own principles favor a non-GMO, local or sustainable crop. Again, consider risk and reward, because yields and returns are not the same thing.
Farmers need to talk with landowners to understand their desires, and farm managers can be the go-between.
How does a young farmer find the right opportunity? The best advice would be to keep an open mind and be persistent. Don’t let your own bias get in the way of a good moneymaking idea. Many farmers will tell you that organic is nonsense and not practical. However, a smart business move is to provide a product that consumers want — and make money doing it. Consumers want to know how their food was grown and feel good about their choices. It is unlikely that this trend will change anytime soon.
Herriott is a farm manager with Busey Bank, Champaign, Ill., and a member of the Illinois Society of Professional Farm Managers and Rural Appraisers. Email questions to email@example.com.