Starting a dairy farm is no small feat, especially in today’s economy. Ron Bula, a financial adviser from Compeer Financial, gave credit to young farmers starting out at the Grassworks Grazing Conference held in Wisconsin Dells, Wis.

“It’s not easy,” he said. “Cash flow is tough. Prices are depressed.”

He did not, however, say it’s not impossible.

“Anything is possible,” he said. “It just depends on how much you want to sacrifice and put into it.”

Speaking as part of a beginning farmers panel discussion, Bula said to hopeful farmers in the audience, “Your opportunity is to be more nimble than the bulldozer,” referring to larger dairy farms. “A little bit of diversity is important, too. We can’t put all our eggs in one basket, especially on a smaller farm.”

There is a silver lining
One positive about the current dairy situation that Bula pointed out is that one can enter the business far cheaper than someone could a few years ago. “Cattle are selling for a fraction of what they were, and equipment, too. Facilities are just pennies on the dollar,” he said.

“The big thing,” he advised,” is making sure you have a market for your milk.”

Bula offered a few recommendations for young farmers prior to visiting their lender.

“First, you need to focus on laying out a business plan, and make sure it’s viable,” he said. “If you are not making a profit and a decent living, it’s not sustainable.”

He added, “There will be ups and downs in your career; there always will be in this business, but you have to be making some sort of return for yourself.”

Part of that business plan is determining your goals and objectives. If you have a spouse, be sure to sit down with him or her to confirm that your goals are aligned.

Next, get personal property bought and paid for before buying real estate. “Sometimes people will put the cart before the horse,” he said. “Having money doesn’t necessarily guarantee happiness, but a lack of money can sure be a function of unhappiness.”

Once cattle and equipment are paid for, Bula said the next step is to look into real estate. “Find a farm that will work for you,” he said.

There are several ways to finance a farm purchase, from Farm Service Agency (FSA) young farmer loans to guaranteed loans to land contracts. Look for a lender with experience in this area who can help walk you through the process.