Want to know how much it costs to start up a farm? How much it costs to fence in an acre of land? On a monthly basis the Freshman Farmers will be posting their budgets, lists of expenses, and general financial information. Hopefully this information will help budding farmers be able to budget for and plan for the expected and unexpected, secure funding from CSAs and/or banks, and run a successful farm!

For the past month or so, most of the farm-related work around here has had to do more with forms and computers than with soil and seeds.  Luckily, though, the taxes are done, most of our seeds have been ordered, and the weather has been good enough to allow us to get some tilling done (with our new tiller!).

This was the first year we’ve done any business taxes at all, and I confess it’s a little intimidating.  Because we also live where we are farming, we decided to be very conservative regarding what expenditures were business-related vs. home-related.  It might seem straight-forward, but consider such things as fencing (would we have put that fence up anyway?) and certain seeds (would we have grown that if we weren’t farming?)  We might be splitting hairs, but we surely want to be able to justify every last cent in the case of an audit.

For some reason financial information feels like such a private subject - which is probably why it is so hard to get an idea of what to expect when starting a small-scale farm.  But that’s why Peaceful Valley has asked us to share such information - to help others who may be contemplating it.

Our “record-keeping system” worked for us this year because we are so small, but we’ll need to get better in the future.  We basically just put all potentially business-related receipts in a particular drawer.  As tax time came near, I sat down with a simple calculating spreadsheet and the receipts, entering business expenses into the categories shown on Schedule F (the federal Profit or Loss From Farming tax form).  Expenses that we decided to consider as home-related were set aside, although we are keeping all of it together with our 2010 tax records.

Reading about farmers and taxes online, one gets the impression that a lot of farmers do what felt instinctive to us this year - underestimating expenses (due to caution, or - unfortunately - incomplete record keeping).  This is clearly not good business.  However, the thought of being audited and not being able to produce ample support is terrifying.  I say all this to warn you that our numbers, although probably close, are not an absolute accounting of what was spent (although the income is accurate to the penny!).

Driftwood Farm’s 2010 Financials - “For Tax Purposes”

Total gross sales:  $2,893.90

Expenses: $6,595.35

(Expense category breakdown - “Fertilizers and lime”: $739.91 (includes compost); “Vehicle, machinery and equipment rental” $494.51; “Seeds and plants” $452.72; “Supplies “: $4908.21.  The large numbers include tractor rental, and the purchase and delivery of two 1200-gallon water tanks.)

Of course, our expenses relative to income in 2011 should be lower, considering that most of the equipment and more expensive “infrastructure” are in place.  We recently received a “Business Property Statement” packet in the mail from our county assessor.  My phone call to their office helped a little, but we still need to sit down with this form and figure out what exactly is going on.  We’ll let you know…

PS - As we have for years, we prepared our taxes using one of the well-known tax prep websites.  The information they asked for seemed very thorough, definitely above and beyond what was needed for a small, owner-run farm.

We currently sell eggs to a handful of regular weekly customers, and it’s great to have a reliable market.  However, we want to resume selling eggs at the Farmers Market (especially after jumping through all of the necessary hoops to do so!).  For us, a small flock has been a worthwhile, reasonably-priced, enjoyable investment.  If you are starting from scratch (ha), you’ll have to spend a little bit more than we did when we recently expanded. Start-up: We had previously purchased… Read the rest of this article »

Our 27 pullets had to leave the kiddie pool at some point, and building a coop became a top priority.   We had initially budgeted $250.00 hoping that would cover materials, but I hadn’t actually taken the time to make up a materials list when that happened.  That much new lumber would cost way more than we loosely estimated, so I winged it and decided to frame most of the coop with pallets. I had never built anything out of pallets before, but it made enough sense to just go ahead with.… Read the rest of this article »

Obviously, summer means different things in different places.  In coastal Mendocino, it means it’s warm enough to plant basil (in a sunny sheltered spot or unheated greenhouse), and… fog!  Summer solstice was a lovely, sunny day, and for those of us still scraping off winter’s moss, it was a welcome sight.  Then through today… mostly fog, overcast, and a balmy 60 degrees.  Ahh, coastal summer.  We’ll still have nice, sunny days, but they are scarce enough that… Read the rest of this article »

Apparently we managed to fence in one of the rabbit holes.  We came out a couple weeks ago to find about 8 of our ~60 tomato plants chewed on by the soft, cuddly vermin.  The regular work plan was blown for the day and I hopped in the truck to get replacement plants.  Dan and I ran through options via cell phone about how to foil this latest plot as I drove.  Hands free, of course.  I only risk my life on ladders, not in trucks. The final plan was to create smaller tomato… Read the rest of this article »

Our first Farmers’ Market is a little over a week away and we have been busy gathering, buying and making supplies in anticipation.Harvesting/Rinsing Supplies: 2 Ice Chests - Already owned 1 pair good Scissors/Sheep Shears - $15 1 Wheel Barrow - Already owned 1 Washtub & plumbing - $150 (still needs to be purchased & installed)Packaging Supplies: 3200 Biodegradable Produce Bags - $100.82 1 lb 31/2 by 1/4” Rubber Bands - 4.99 1/4 lb 2 1/2 by 1/16” Rubber Bands- 1.99 840 Pint… Read the rest of this article »

While my main sales outlet at DeepSeeded Farm is my CSA program, I have planted a number of early crops for Farmers Markets as well.  These crops bring in revenue early in the season, and they also help me market my CSA shares.  This year, through a combination of coldframe space and fall-prepped, early spring planted outdoor beds, I am now harvesting butter lettuce, spinach, salad turnips, carrots, potatoes, baby bok choi, and (soon) zucchini and sunflowers.  I’ll also have an early harvest… Read the rest of this article »

Shiitake mushroom preparation is well underway, with about 35, 4-foot logs inoculated and set up. The process is fairly straightforward: drill a hole, load the “palm inoculator” with sawdust spawn, fill the hole with sawdust spawn, cover the hole with hot wax. Wait 6-18 months, and voila…or at least, that’s how it’s supposed to work The biggest difficulty I am expecting to deal with is maintaining the inoculated logs at the ideal temperature and moisture content over… Read the rest of this article »

Our new small hoop house is adorable, but is it financially sound? Here is the bottom line on the financials for a 5’x5’ hoop house. Raised bed - recycled scrap wood.  $0 Wood screws to construct raised bed - $8.67. PVC pipes - 1/2” inner diameter, 10’ length (5 at $1.16 each) - $5.80 3/4” copper 2-hole pipe straps, package of 25 (we used all but 1) - $11.12 Wood screws to affix pipe straps - $2.00 So far, the hoop house has cost us $27.59. In addition, the hoop house… Read the rest of this article »