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How to Start a Farm: Plan Your Operation

Think about your operation from the ground up and start planning for your business.  A good farm business plan is your roadmap to start-up, profitability, and growth, and provides the foundation for your conversation with USDA about how our programs can complement your operation. 

Keep reading about planning your business below, get an overview of the beginning farmer's journey , or jump to a different section of the farmer's journey.

On This Page

Why you need a farm business plan.

A comprehensive business plan is an important first step for any size business, no matter how simple or complex. You should create a strong business plan because it:

• Will help you get organized . It will help you to remember all of the details and make sure you are taking all of the necessary steps.
• Will act as your guide . It will help you to think carefully about why you want to farm or ranch and what you want to achieve in the future. Over time, you can look back at your business plan and determine whether you are achieving your goals.
• Is required to get a loan . In order to get an FSA loan, a guarantee on a loan made by a commercial lender, or a land contract, you need to create a detailed business plan . Lenders look closely at business plans to determine if you can afford to repay the loan.

How USDA Can Help

Whether you need a good get-started guide, have a plan that you would like to verify, or have a plan you’re looking to update for your next growth phase, USDA can help connect you to resources to help your decisions.

Your state's beginning farmer and rancher coordinator  can connect you to local resources in your community to help you establish a successful business plan. Reach out to your state's coordinator for one-on-one technical assistance and guidance. They can also connect you with organizations that specifically serve beginning farmers and ranchers.

It is important to know that no single solution fits everyone, and you should research, seek guidance, and make the best decision for your operation according to your own individual priorities.

Build a Farm Business Plan

There are many different styles of business plans. Some are written documents; others may be a set of worksheets that you complete. No matter what format you choose, several key aspects of your operation are important to consider.

Use the guidelines below to draft your business plan. Answering these kinds of questions in detail will help you create and develop your final business plan. Once you have a business plan for your operation, prepare for your visit to a USDA service center. During your visit, we can help you with the necessary steps to register your business and get access to key USDA programs.

Business History

Are you starting a new farm or ranch, or are you already in business? If you are already in business:

• What products do you produce?
• What is the size of your operation?
• What agricultural production and financial management training or experience do you, your family members, or your business partners have?
• How long have you been in business?

Mission, Vision, and Goals

This is your business. Defining your mission, vision and goals is crucial to the success of your business. These questions will help provide a basis for developing other aspects of your business plan.

• What values are important to you and the operation as a whole?
• What short- and long-term goals do you have for your operation?
• How do you plan to start, expand, or change your operation?
• What plans do you have to make your operation efficient or more profitable ?
• What type of farm or ranch model (conventional, sustainable, organic, or alternative agricultural practices) do you plan to use?

Organization and Management

Starting your own business is no small feat. You will need to determine how your business will be structured and organized, and who will manage (or help manage) your business. You will need to be able to convey this to others who are involved as well.

• What is the legal structure of your business? Will it be a sole proprietorship, partnership, corporation, trust, limited liability company, or other type of entity?
• What help will you need in operating and managing your farm or ranch?
• What other resources, such as a mentor or community-based organization , do you plan to use?

Marketing is a valuable tool for businesses. It can help your businesses increase brand awareness, engagement and sales. It is important to narrow down your target audience and think about what you are providing that others cannot.

• What are you going to produce ?
• Who is your target consumer ?
• Is there demand for what you are planning to produce?
• What is the cost of production?
• How much will you sell it for and when do you expect to see profit ?
• How will you get your product to consumers ? What are the transportation costs and requirements?
• How will you market your products?
• Do you know the relevant federal, state, and local food safety regulations? What licensing do you need for your operation?

Today there are many types of land, tools, and resources to choose from. You will need to think about what you currently have and what you will need to obtain to achieve your goals.

• What resources do you have or will you need for your business?
• Do you already have access to farmland ? If not, do you plan to lease, rent, or purchase land?
• What equipment do you need?
• Is the equipment and real estate that you own or rent adequate to conduct your operation? If not, how do you plan to address those needs?
• Will you be implementing any conservation practices to sustain your operation?
• What types of workers will you need to operate the farm?
• What additional resources do you need?

Now that you have an idea of what you are going to provide and what you will need to run your operation you will need to consider the finances of your operation.

• How will you finance the business?
• What are your current assets (property or investments you own) and liabilities (debts, loans, or payments you owe)?
• Will the income you generate be sufficient to pay your operating expenses, living expenses, and loan payments?
• What other sources of income are available to supplement your business income?
• What business expenses will you incur?
• What family living expenses do you pay?
• What are some potential risks or challenges you foresee for your operation? How will you manage those risks?
• How will you measure the success of your business?

Farm Business Plan Worksheets

The Farm Business Plan Balance Sheet can help gather information for the financial and operational aspects of your plan.

Form FSA-2037 is a template that gathers information on your assets and liabilities like farm equipment, vehicles and existing loans.

• FSA-2037 - Farm Business Plan - Balance Sheet
• FSA-2037 Instructions

Planning for Conservation and Risk Management

Another key tool is a conservation plan, which determines how you want to improve the health of your land. A conservation plan can help you lay out your plan to address resource needs, costs and schedules.

USDA’s Natural Resources Conservation Service (NRCS) staff are available at your local USDA Service Center to help you develop a conservation plan for your land based on your goals. NRCS staff can also help you explore conservation programs and initiatives, such as the Environmental Quality Incentives Program (EQIP) .

Conservation in Agriculture

Crop insurance, whole farm revenue protection and other resources can help you prepare for unforeseen challenges like natural disasters.

Disaster Recovery

Special Considerations

Special considerations for businesses.

There are different types of farm businesses each with their own unique considerations. Determine what applies to your operation.

• Organic Farming  has unique considerations. Learn about organic agriculture , organic certification , and the  Organic Certification Cost Share Program  to see if an organic business is an option for you. NRCS also has resources for organic producers and offers assistance to develop a conservation plan.
• Urban Farming  has special opportunities and restrictions. Learn how USDA can help farmers in urban spaces .
• Value-Added Products . The Agricultural Marketing Resource Center (AgMRC) is a national virtual resource center for value-added agricultural groups.
• Cooperative.  If you are interested in starting a cooperative, USDA’s Rural Development Agency (RD) has helpful resources to help you begin . State-based  Cooperative Development Centers , partially funded by RD, provide technical assistance and education on starting a cooperative.

Special Considerations for Individuals

Historically Underserved Farmers and Ranchers: We offer help for the unique concerns of producers who meet the USDA definition of "historically underserved,"  which includes farmers who are:

• socially disadvantaged
• limited resource
• military veterans

Women: Learn about specific incentives, priorities, and set asides for  women in agriculture within USDA programs.

Heirs' Property Landowners: If you inherited land without a clear title or documented legal ownership, learn how USDA can help Heirs’ Property Landowners gain access to a variety of programs and services

Business Planning

Creating a good business plan takes time and effort. The following are some key resources for planning your business.

• Farm Answers from the University of Minnesota features a library of how-to resources and guidance, a directory of beginning farmer training programs, and other sources of information in agriculture. The library includes business planning guides such as a Guide to Developing a Business Plan for Farms and Rural Businesses and an Example Business Plan .
• The Small Business Administration (SBA) offers information about starting, managing, and transitioning a business.

SCORE is a nonprofit organization with a network of volunteers who have experience in running and managing businesses. The Score Mentorship Program partners with USDA to provide:

• Free, local support and resources, including business planning help, financial guidance, growth strategies.
• Mentorship through one-on-one business coaching -- in-person, online, and by phone.
• Training from subject matter experts with agribusiness experience.
• Online resources and step-by-step outlines for business strategies.
• Learn more about the program through the Score FAQ .

Training Opportunities

Attend field days, workshops, courses, or formal education programs to build necessary skills to ensure you can successfully produce your selected farm products and/or services. Many local and regional agricultural organizations, including USDA and Cooperative Extension, offer training to beginning farmers.

• Cooperative Extension  offices address common issues faced by agricultural producers, and conduct workshops and educational events for the agricultural community.
• extension.org  is an online community for the Cooperative Extension program where you can find publications and ask experts for advice.

Now that you have a basic plan for your farm operation, prepare for your visit to a USDA service center.

2. Visit Your USDA Service Center

How to Start a Farm with USDA

Get an  overview of the beginning farmer's journey  or jump to a specific page below.

Find Your Local Service Center

USDA Service Centers are locations where you can connect with Farm Service Agency, Natural Resources Conservation Service, or Rural Development employees for your business needs. Enter your state and county below to find your local service center and agency offices. If this locator does not work in your browser, please visit offices.usda.gov.

Learn more about our Urban Service Centers . Visit the Risk Management Agency website to find a regional or compliance office  or to find an insurance agent near you.

[Pdf Sample] Crop Farming Business Plan Docx

In today’s agricultural landscape, having a well-structured business plan is essential for the success of any crop farming venture. A business plan serves as a roadmap, guiding farmers through various stages of planning, implementation, and growth.

[Pdf Sample] Crop Farming Business Plan Proposal Docx

To write a business plan , here is a breakdown of how it should be structured and what should be in each category. After this instruction, I will provide you with a sample of one I wrote for my farm , let us go:

Executive Summary

The executive summary acts as an overview of your crop farming business plan. It highlights the key points, objectives, and strategies of your venture, providing a concise snapshot of your business.

Business Description

In this section, you’ll delve deeper into the details of your crop farming business . Discuss the type of crops you plan to cultivate, the size of your farm, and any unique selling propositions that differentiate your farm from others. It is crucial to outline your vision, mission, and core values, showcasing your commitment to sustainable and ethical farming practices .

Read Also:  [Pdf Sample] Palm Oil Farming & Production Business Plan Docx

Market Analysis

Read Also:  [Pdf Sample] Poultry Farming Business Plan In South Africa Docx

Products and Services

Describe the specific crops you intend to grow , highlighting their nutritional value, market demand, and potential profitability. Discuss any value-added products or services you plan to offer, such as organic produce or agritourism activities. Emphasize the quality and uniqueness of your products to attract potential customers.

Marketing Strategy

Read Also:  [Pdf Sample] Farm Business Plan Example Docx

Operational Plan

Management and organization.

In this section, outline the management structure of your farm and introduce key personnel responsible for various aspects of the business . Highlight their qualifications and expertise, demonstrating their ability to contribute to the success of your crop farming venture. Additionally, discuss any plans for employee training and development to ensure a skilled workforce.

Read Also:  [Pdf Sample] Business Plan For Farming In South Africa Docx

Financial Plan

Risk assessment and mitigation.

Every business faces risks, and it is essential to identify and mitigate them effectively. Discuss potential risks associated with crop farming , such as adverse weather conditions, market fluctuations, or pest infestations. Outline risk mitigation strategies, such as crop insurance, diversification, or implementing sustainable farming practices . Demonstrating your ability to manage risks will instill confidence in potential investors or lenders.

Here Is a Download Link to the Crop Farming Business Plan Proposal Prepared By Agrolearner.com

Business Model for Agrolearners.com’s Crop Farming Business:

Key partnerships:.

Technology Providers: Partner with online learning platforms, video production companies, and website developers to ensure seamless delivery of educational resources.

Read Also:  [Pdf Sample] Business Plan For Cattle Farming In South Africa Docx

Key Activities:

Content Development: Create comprehensive and interactive courses, webinars, videos, and articles that cover all aspects of crop farming , from theory to practical application.

Platform Management: Maintain and update the Agrolearners.com website, ensuring a user-friendly experience and smooth access to educational resources.

User Support: Provide customer support through various channels, including email, chat, and forums, to address inquiries, provide guidance, and resolve any technical issues.

Value Proposition:

Comprehensive Agricultural Education: Agrolearners.com offers a wide range of resources, including structured courses, webinars, videos, and articles, covering all aspects of crop farming, from beginner to advanced levels.

Flexibility and Accessibility: Our online platform allows learners to access educational resources at their convenience, from any location, enabling them to learn at their own pace and according to their individual schedules.

Community and Networking: Agrolearners.com creates a community of like-minded individuals, allowing learners to connect, share experiences, and collaborate with other aspiring farmers and industry experts.

Customer Segments:

Existing Farmers: Farmers who want to enhance their knowledge, adopt sustainable practices, and explore new crop varieties to improve the productivity and profitability of their farms.

Agricultural Students: Students pursuing agricultural studies who wish to supplement their formal education with practical insights and hands-on experience in crop farming.

Customer Relationships:

Interactive Webinars and Q&A Sessions: Conduct live webinars and interactive sessions with agricultural experts, allowing learners to engage, ask questions, and receive personalized guidance.

Community Engagement: Foster an online community where learners can connect, share experiences, and learn from each other, fostering a sense of belonging and support.

Revenue Streams:

Webinar Registrations: Offer specialized webinars and charge participants a registration fee to attend live sessions with agricultural experts.

Advertising and Partnerships: Collaborate with agricultural suppliers and other relevant businesses to offer targeted advertising opportunities on the Agrolearners.com platform.

Cost Structure:

Content Development: Allocate resources to create high-quality course materials, videos, and articles.

Technological Infrastructure: Invest in website development, hosting, and maintenance, ensuring a seamless user experience.

Operational Expenses: Cover ongoing expenses such as personnel salaries, customer support, and administrative costs.

Key Resources:

Expertise and Knowledge: Engage agricultural experts and educators to develop content and provide guidance.

Content Creation Tools: Invest in video production equipment, e-learning software, and other tools required to develop high-quality educational materials.

Marketing and Analytics Tools: Utilize digital marketing tools, analytics platforms, and customer relationship management (CRM) systems to track performance and optimize marketing efforts.

Is it necessary to create a business plan for a crop farming venture?

Yes, a business plan is crucial for the success of any crop farming business. It helps in defining goals, strategies, and financial projections, and serves as a roadmap for your agricultural endeavor.

How can I assess market demand for specific crops?

Conduct market research, analyze consumer trends, and engage with potential buyers or distributors to understand the demand for your chosen crops.

What financial aspects should I consider in my business plan?

How can i mitigate risks in crop farming.

Identify potential risks such as weather fluctuations, pests, or market volatility, and develop strategies to mitigate them. This may include insurance coverage, diversification, or implementing sustainable farming practices .

Can I modify my business plan as my farm grows?

Yes, your business plan should be a dynamic document that evolves with your farm . Regularly review and update it to reflect changes in the market, technology, or your business goals.

Conclusion:

With a comprehensive business plan , a dedicated team, and a strong marketing strategy, we are confident in the success of Agrolearners.com in the agricultural education sector.

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• Business plans

Farm Business Plan

Used 5,069 times

Farm Business Plan gives an overview of the company, including corporation history, owner backgrounds, creations and more. Use this template to quickly develop your farm company plan.

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Farm Business Plan Template

Prepared by:

​ [Sender.FirstName] [Sender.LastName] ​

​ [Sender.Title] ​

​ [Sender.Phone] ​

​ [Sender.Email] ​

Executive Summary

​ [Sender.Company] is owned and operated by [Sender.FirstName] [Sender.LastName] .

​ [Sender.Company] produces and sells (product types, e.g., produce, pastured animals, herbs, etc.), and we also provide on-farm services including (service types, e.g., apple picking, events, produce stand, etc.).

The target audience for [Sender.Company] 's product will be local consumers and businesses whom we will target directly. To market to this audience, we plan to take advantage of public picking events, farmers' markets, and a roadside farm stand.

Future of the Farm

​ [Sender.Company] plans to turn our XX acres of farmland into a sustainable source of crops, pastured animals, and pollinators. We plan to use regenerative farming practices as much as possible and understand what management techniques work best for our acreage.

Additionally, we will have a large greenhouse and use season extension techniques to get more value out of our farmland.

To build a locally well-known brand and eventually expand our presence across the state.

To sell enough of our product to generate a positive cash flow, support the farm owners and staff, and pay back capital plus 15% interest to our investors.

To preserve and enhance our farmland so that it remains sustainable and we can continue to share the fruits of the land with others.

Follow a thorough 3-year business plan and reassess every year to ensure we remain on track.

Seek funding from our network of contacts and outside funders for start-up costs.

Execute a creative marketing plan that introduces our brand to our target market.

Company Description

Business address and contact.

​ [Sender.StreetAddress] , [Sender.City] , [Sender.State] [Sender.PostalCode] ​

​ [Sender.FirstName] [Sender.LastName] : [Sender.Phone] , [Sender.Email] ​

Principal Members

(Owner.FirstName) (Owner.LastName)

Qualifications/Experience

(number) years of experience as a farm hand at (farm name), plus an additional 5 years of experience as the farm manager

(Education)

(Operator.FirstName) (Operator.LastName)

(Experience)

Legal Structure

​ [Sender.Company] is a sole proprietorship.

Company Details

Our property is zoned for farm use, and we plan to use the land as follows:

X acres for pastured animals

X acres for produce

X acres for agritourism activities and events

Farm Assets

Greenhouse and propagation supplies

Farm stand (planned for 20XX)

Market Research

The demand for locally raised animals and grown produce is climbing at a rate of XX% per year and is expected to reach a total value of $XX billion by 20XX.

Consumer demand for free-range, pasture-raised animals is evidenced by farms like (name competitors) which have grown into valuations of (approximate company values) , respectively.

Regulations

​ [Sender.Company] is a licensed business in the State of [Sender.State] as of the year 20XX. We are in the process of applying for all of the necessary permits for constructing the farm stand, expanding the barn, and hosting on-site visitors to the farm.

Service Line

Product/service.

Services Include:

Pasture-raised animals

Produce cultivation

Public apple picking

Public hay maze

Special event packages

Marketing & Sales

Customer communications.

​ [Sender.Company] will communicate with its customers by:

Interacting with customers in-person via farmers markets, the farm stand, and through the leveraging of networking events.

Building an active social media presence on Instagram and TikTok.

Advertising agritourism activities like apple picking, hay mazes, farm trails, and other events.

Creating SEO-friendly blog posts on the company website to increase online presence.

Establishing listings with the local tourism board and activity guides.

Sales Strategy

​ [Sender.Company] 's product will be sold primarily in the (region) . The farm is located on a road with extensive car traffic, so we plan to build a farm stand on the property to capture attention and drive sales.

We also plan to build a social media presence and leverage local advertising to drive awareness of our brand. We will also attend farmers' markets within the region to meet customers face-to-face and build relationships.

Five-year plan

Year One: 20XX

Create a legal business entity

Apply for necessary licenses and permits.

Finalize farm layout.

Procure additional equipment.

Establish social media profiles.

Build a small farm stand.

Attend farmer's markets.

Year Two: 20XX

(List goals for year two)

Year Three: 20XX

Year Four: 20XX

Year Five: 20XX

​ [Recipient.FirstName] [Recipient.LastName] ​

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To develop a viable farm business plan , it will take a great idea. During the writing of a farm business plan, you will develop an overall vision and mission for your business. You can add the short and long term goals you have for your farm in the plan. In planning for your next bean of the farm business, deciding on the suppliers, making the deduction of the selling point or shop expansion plan, templates will always inspire a thoughtful plan for you.

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Step 1: Goals and Objectives

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Conclusion:

General faqs, 1. what is a farm business plan, 2. what is the purpose of a farm business plan, 3. what should be included in a farm business plan.

• Gather information and research markets
• SWOT analysis
• Alternative strategies, if any
• Add one or more conclusion
• Add your strategies and reread your mission statement
• Implementation plan to reach your goals
• List of resources and materials needed, budget, etc.

4. What is a good Farm Business Plan?

5. how to make a farm business plan.

• Take stock of the crops growing on your farmland
• Assess how long does it take to grow a certain crop
• Write the mission statements
• Design your business plan
• Action plan to get over any unexpected/expected crisis
• Budget for each crop and their sale values
• Salaries for workers, etc.

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Step 1: create an executive summary, step 2: set goals and objectives, step 3: make an introduction, step 4: give a mission statement, step 5: state your company history, step 6: make a competitor analysis and create a plan, share this post on your network, you may also like these articles.

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Farm Business Plan Template [Updated 2024]

Farm Business Plan

If you want to start a successful farm or expand your current farming business, you need a business plan.

Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of farm business plans.

The following farm business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.

You can download our Farm Business Plan Template (including a full, customizable financial model) to your computer here.  

Example Business Plan For Farm Businesses

I. executive summary, business overview.

[Company Name], located at [insert location here] is a new, 500 acre organic dairy, beef, and wheat farm providing food products to regional distributors. [Company Name] is headed by [Founder’s Name], an experienced farm manager.

[Company Name]will sell high-quality beef cuts, wheat by the bushel, and whole milk. The products will be certified organic as growth hormones, fertilizers and pesticides will not be used in production.

Customer Focus

[Company Name] will primarily serve regional distributors of dairy, beef, and wheat products. Some products may be sold directly to manufacturers in the local area for the production of other products from these ingredients.

These businesses typically gross $5 million to $50 million in annual revenues and source their supplies from farms within a 100 mile radius of their facilities.

Distributors and manufacturers of food products in the region see growth in interest in organic products and are in need of organic ingredients for suppliers. Consumers show increased demand for these organic products at stores.

Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a farm operations manager for the past 15 years. He has spent much of his career working with Blue Ridge Farms, where he oversaw dairy, meat, and grain production.

[Company name] will also employ an experienced salesmanager to sell to distributors and manufacturers. This will be a skilled salesperson trained in farm sales by [Founder’s Name]. An assistant manager will manage day-to-day operations of the farm.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• [Company Name] will fill a specific market niche in organic foods. In addition, we have surveyed the regional distributors and received extremely positive feedback saying that they explicitly want to buy our products when launched.
• Our location is within 100 miles of numerous potential distributors and contains hundreds of acres of arable land.
• The management team has a track record of success in the farming business.

Financial Highlights

[Company Name] is seeking a total funding of $683,200 of debt capital to open its farm. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:

II. Company Overview

You can download our Farm Business Plan Template (including a full, customizable financial model) to your computer here.

Who is [Company Name]?

[Company Name], located at [insert location here] is a new 500 acredairy, beef, and wheat farm providing food products to regional distributors. [Company Name] is headed by [Founder’s Name], an experienced farm manager. 300 acres of its land will be devoted to growing wheat and the remainder will be for dairy, beef, and office facilities.

While [Founder’s Name] has been in the farming business for some time, it was in [month, year] that he decided to launch [Company Name]. Specifically, during this time, [Founder] met with a former friend and fellow independent organic farm owner in South Dakota who has had tremendous success. After discussing the business at length, [Founder’s Name] clearly understood that a similar farm would enjoy significant success in his hometown.

Specifically, the customer demographics and competitive situations in the South Dakota area of his friend and in his hometown were so similar that he knew the business would work. After surveying the local market, [Founder’s name] went ahead and founded [Company Name].

[Company Name]’s History

Upon returning from South Dakota, surveying the local customer base, and finding potential land to start the farm, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

The business is currently being run out of [Founder’s Name] home office, but once the land is purchased and [Company Name]’s facilities are finalized, all operations will be run from there.

Since incorporation, the Company has achieved the following milestones:

• Found land and negotiated rate
• Developed the company’s name, logo and website located at [website]
• Determined building, equipment and fixture requirements
• Begun recruiting key employees

[Company Name]’s Products

[Founder’s Name] will be able to provide customers with the following products:

• High-quality organic beef cuts
• Organically-grown wheat by the bushel
• Organic whole milk

III. Industry Analysis

The American commercial farming industry continues to be subsidized by the government to bolster low food prices. This is a volatile and difficult industry in the United States, with small and medium-sized farms increasingly being bought by large farms or struggling to survive on their own.

However, for organic foods, trends are positive. Organic foods sales are projected to increase 18% per year over the next three years and were estimated at $23 billion last year, according to the Organic Trade Association Market Survey. This sector is said to represent 3% of overall food and beverage sales. Global demand for organic foods increases by over $5 billion per year.

The farming industry includes multiple segments including poultry meat, beef, dairy, grain crops, vegetables, fruits, and more. Many businesses focus on only one specific segment, while some produce multiple types of crops in order to hedge against price changes in any one segment.

Recently, Horizon, the largest US organic food brand, dropped the term “organic” from its dairy products choosing instead to use the term “natural”. Critics noted that the term “natural” has no regulatory meaning and shows Horizon’s attempt to lower the cost of production by not meeting the requirements for the organic label. This shows a concern in the market about the meaning behind labels and highlights the importance of regulation to create common definitions.

Organic.org published the following list of reasons to support organic foods and beverages:

• Reduce the toxic load: Keep chemicals out of the air, water, soil and our bodies
• Reduce if not eliminate farm pollution
• Protect future generations
• Build healthy soil
• Taste better and truer flavor
• Assist family farmers of all sizes
• Avoid hasty and poor science in your food
• Eating with a sense of place
• Promote biodiversity
• Celebrate the culture of agriculture

Trends in the industry include the following:

• Meat and fish that are organically produced are becoming more popular
• Organic dairy, bread, and grain are becoming more popular
• Organic-only supermarkets are becoming more popular
• Traditional supermarkets are increasing organic purchases to keep up with these competitors.

IV. Customer Analysis

Demographic profile of target market.

[Company Name]will primarily serve regional distributors of dairy, beef, and wheat products. Some products may be sold directly to manufacturers in the local area for the production of other products from these ingredients.

These businesses typically gross from $5 million to $50 million in annual revenues and source their supplies from within a 100 mile radius of their facilities.

Customer Segmentation

The Company will primarily target the following two customer segments:

• Regional Organic Distributors: Organic food distributors source organic meat, dairy, and grains from medium and large farms, and sell them to food manufacturers who process, package and sell the products.
• Organic Dairy Manufacturers: Small manufacturers that process organic dairy products, such as butter, cream, and cheese work directly with local farms to keep costs low whenever possible.

V.Competitive Analysis

Direct & indirect competitors.

The following twoorganic farms operate within a 100 mileradius of [Company Name]. These, and other smaller organic farms like them, are the direct competitors of the business. Indirect competitors include non-organic dairy, beef, and grain farms.

Nature’s Bounty Farm

Nature’s Bounty Farm is a five-year old farm which produces vegetables and grains for organic distributors. They operate a 1000 acre farm, producing a high volume of goods.

However, Nature’s Bounty Farm does not offer organic dairy and meat, which are up-and-coming products.

Thompson Organics

Thompson Organics is a small, 300 acre, ten-year old farm which produces organic grains and bakes organic breads. They sell all of their products at farmer’s markets and directly at retail stores. This distribution strategy requires Thompson to have skilled customer service and sales employees, as well as facilities for baking and packaging.

Because Thompson avoids selling through to distributors, its brand is known directly by consumers who look for organic foods and it can command a premium. However, they, like Nature’s Bounty Farm, do not offer organic dairy and meat. They also have a high cost structure because of their small scale and operations.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Client-oriented service: [Company Name] will have a full-time sales manager to keep in contact with customers and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to customers and will instruct the sales manager to proactively solicit feedback from customers.
• Management: [Founder’s Name] has been extremely successful working in the farming business and will be able to use his previous experience to assure clients of the care that [Company Name] will take to create the best organic products. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name’s] competitors.
• Transparency: To continue to assure customers and the government of the organic quality of [Company Name]’s products, operations can be inspected by customers at a moments notice, and a guide to the operations will be created to detail all of the steps in the production process for each crop.
• Product Line: By offering wheat, dairy, and meat, [Company Name] will seek to hedge against price volatility in any one of these commodities.

VI. Marketing Plan

[Company Name] will use several strategies to promote its name and develop its brand. By using an integrated marketing strategy, [Company Name] will win customers and develop consistent revenue streams.

The [Company Name] Brand

The [Company name] brand will focus on the Company’s unique value proposition:

• High-quality, organic milk, beef, and grains
• Service built on long-term relationships
• Transparency of operations to achieve customer assurance of organic quality

Promotions Strategy

Targeted Cold Calls

[Company Name] will initially invest significant time and energy into contacting potential customers via telephone and then by visiting their facilities. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used; targeting distributors and manufacturers with an expressed interest in organic products. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial customer base.

Industry Events

By attending regional farming conferences, association meetings, and symposia, [Company Name] will network with industry leaders, and seek referrals to potential customers. [Founder’s Name] will often attend with the company sales manager, but both may attend separately in the future as they gain experience in this networking.

[Company Name] will invest resources in two forms of geographically-focused internet promotion—organic search engine optimization and pay-per-click advertising. The Company will develop its website in such a manner as to direct as much traffic from search engines as possible. Additionally, it will use highly-focused, specific keywords to draw traffic to its website, where potential clients will find a content-rich site that presents [Company Name] as the trustworthy, high quality producer of organic foods that it is.

Pricing Strategy

[Company Name]’s pricing will be competitive compared with Nature’s Bounty Farm. Pricing will be about 50% lower than retail prices to allow for wholesalers and retailers to earn their margins.

VII. Operations

[Company Name] will carry out its sales operations through phone calls and visits to customer offices. The sales manager will increasingly direct sales activities, although [Founder’s Name] will be heavily involved at first.

The assistant manager will run the day-to-day operations of the farm, including scheduling and assigning the work of farm hands, sourcing and purchasing supplies and basic equipment, keeping the company’s books, maintaining legal licenses, handling insurance and insuring that the company meets government regulations. He will contact specialists for equipment repairs when needed and veterinarians to care for the cows when they require medical attention.

Field work by the farm hands will be from sunrise to sunset, with indoor work during the hottest parts of the day and after dark. Field work will include preparing fields for planting, the planting process, tending to planted fields, harvesting, and packaging grain into bushels. Work with the cows will include feeding, taking them in and out of the pasture, and running the milking equipment. It will also include slaughtering and dressing the cows for beef when directed.

[Company Name]’s long term goal is to become the highest quality farmer in the [city] area. We seek to do this by ensuring customer satisfaction and developing a loyal and successful clientele.

The following are a series of steps that will lead to this long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

VIII. Management Team

[First name] is intimately familiar with the operations requirements for a farm producing the same products as [Company Name]. He has received organic training certification to become an organic food producer.

[Company name] will also employ an assistant manager to manage operations. This will be an experienced operations manager who will be trained in farm operations by [Founder’s Name]. Furthermore, a sales manager will be hired to focus on marketing, sales, and customer service to distributors as manufacturers for [Company Name] products. These two individualswill either have undergraduate business degrees or years of relevant operations or sales experience.

Hiring Plan

In order to launch the business we will also hire the following additional employee:

• Farm Hand: (1 full-time to start) Additional farm hands will be hired if capacity increases or if another farm is started.

The hiring process will be managed by the assistant manager who will be directly responsible for the farm hand, with oversight and approval by [Founder’s Name]. This individual must be in top physical condition, have experience in physical labor, and have great mechanical facility and care for the quality of his work and products.

The assistant manager and [Founder’s Name] will provide back-up support for the farm hand in the busiest times and when he is out sick or on vacation.

IX. Financial Plan

Revenue & pricing.

[Company Name]’s revenues will come primarily fromsale in three product areas.

The price of beef is only an average per cow, and individual cuts are sold at market rates depending on the quality of the cut of meat.

Prices are expected to fluctuate with market volatility on the rise, although they are expected to rise consistently, on average.

Key Cost Drivers

As with most services, labor expenses are the key cost drivers. The staff of four will earn competitive salaries allowing [Company Name] to hireexperienced workers. Furthermore, the costs of the mortgage and its interest for the land will be significant.

The major cost drivers for the company’s operation will consist of:

• Marketing expenses (associations, events, internet marketing).

Capital Requirements and Use of Funds

• Build-out of farm and equipment purchases: $273,200
• Initial marketing expenditure: $10,000
• Property down payment: $100,000
• Working capital: $300,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions & Forecasts

The following table reflects the key revenue and cost assumptions made in the financial model.

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement

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Farm Business Plans

Written by Dave Lavinsky

Cultivate your agricultural ambitions with our comprehensive collection of farm sector business plan examples. Perfect for farmers, agripreneurs, and agronomists, this resource provides information, from small-scale organic operations to expansive agribusiness ventures. Navigate the complexities of the agricultural industry with these detailed plans, designed to help you grow a thriving, resilient, and profitable farming enterprise.

Farm Business Plan Templates

Agricultural Business Plan Template

Aquaponics Business Plan Template

Cattle Farming Business Plan Template

Dairy Farm Business Plan Template

Farm Business Plan Template

Fish Farm Business Plan Template

Goat Farming Business Plan Template

Hemp Farm Business Plan Template

Honey Bee Farm Business Plan Template

Hydroponics Business Plan Template

Livestock Farm Business Plan Template

Microgreens Business Plan Template

Mushroom Farm Business Plan Template

Pig Farm Business Plan Template

Poultry Farm Business Plan Template

Solar Farm Business Plan Template

Tree Farm Business Plan Template

Worm Farm Business Plan Template

Agriculture, Farm & Food Production Business Plans

• IT, Staffing & Customer Service
• Construction, Architecture & Engineering
• Food, Beverage & Restaurant
• Real Estate & Rentals
• Mobile Apps & Software
• Education & Training
• Beauty Salon & Fitness
• Medical & Health Care
• Retail, Consumers & E-commerce
• Entertainment & Media
• Transportation, Logistics & Travel
• Agriculture, Farm & Food Production
• Nonprofit & Community
• Manufacturing & Wholesale
• Clothing & Fashion
• Children & Pets
• Fine Art & Crafts
• Cleaning, Maintenance & Repair
• Hotel & Lodging
• Finance & Investing
• Consulting, Advertising & Marketing
• Accounting, Insurance & Compliance

Agritourism Business Plan

Beekeeping Business Plan

Farming Business Plan

Hydroponics Business Plan

Fishing Farming Business Plan

Food Distribution Business Plan

Dairy Farm Business Plan

Small Farming Business Plan

Cannabis Cultivation Business Plan

Organic Farm Business Plan

How to Write a Cannabis Business Plan + Free Template

Cattle Farm Business Plan

Poultry Farming Business Plan

Lawn Care Business Plan

Horse Boarding Business plan

Solar Farm Business Plan

Plant Nursery Business Plan

Microgreens Business Plan Template & Guide [Updated]

Did you find what you are looking for.

Agriculture or farming is the only industry consistently performing well, regardless of economic climate changes.

Whether you plan to start farming, cannabis cultivation, a cattle farm, or nursery business, you’ll do great as long as you do things right and have a solid business plan.

This library of farm business plan examples here can inspire and guide you as you begin to plan your business. So, don’t worry; we got you covered on that part.

Let’s learn more about these agriculture business plan samples, starting with their benefits.

Benefits of using an industry-specific business plan example

Believe it or not, using an industry-specific business plan example is the best and probably the quickest way of writing a business plan.

Doubt it? Hold, this may change your perception; an extended list of the benefits of using an industry-specific business plan template.

• Inspiration : Reading a business-specific template can be incredibly helpful in getting content inspiration. Furthermore, it helps you gain insights into how to present your business idea, products, vision, and mission.
• Risk-free method : You are taking a reference from a real-life, let’s say, plant nursery business plan—so you know this plan has worked in the past or uses a method subscribed by experts.
• Deep market understanding : Analyzing and reading such examples can provide clarity and develop a deeper market understanding of complex industry trends and issues you may not know but relate directly to the realities of your business landscape.
• Increased credibility : A business plan developed using an example follows a standard business plan format, wisely presents your business, and provides invaluable insights into your business. There’s no question it establishes you as a credible business owner, demonstrating your deep business and market understanding.
• Realistic financial projections : Financial forecasting being a critical aspect of your plan, this real-life example can help you better understand how they project their financials—ultimately helping you set realistic projections for your business.

These were the benefits; let’s briefly discuss choosing an agriculture or food production plan example that best suits your business niche.

Choosing an Agriculture or Farming Business Plan

This category has business plan templates for various farming or agricultural businesses. With many similar business types and templates, you may not find the most suitable one through manual scrolling.

Here are the steps to consider while choosing the most suitable business plan template.

Identify your business type

Are you planning to start cannabis cultivation? Or thinking of doing organic farming? Thinking of taking care of horses through horse boarding?

Asking yourself these questions will help you identify your business type, which will help in choosing a niche-specific business plan template.

Once you identify your business type, you can choose between templates for different business segments.

Search for the template

We have an in-built search feature, so you can easily search for a business-specific template using your business type as a key term. Once you have the search results, choose the most suitable one. Simple as that.

Review the example

Look closely at the content of the sample business plan you are considering. Analyze its sections and components to identify relevant as well as unnecessary areas.

Since all the Upmetrics templates are tailored to specific business needs, there won’t be many fundamental customizations. However, a hybrid business model targeting multiple customer segments may require adjustments.

For instance, if you plan to start a cannabis cultivation business and also produce and sell CBD, you may need to adjust some of your business plan sections accordingly.

No big deal—you can view and copy sections from other business plan examples or write using AI while customizing a template.

That’s how you find and select the most suitable business plan for your farming business. Still haven’t found the perfect business plan example? Here’s the next step for you.

Explore 400+ business plan examples

Check out Upmetrics’ library of 400+ sample plans and get your free business plan template now. Upmetrics is a modern and intuitive business planning software that streamlines business planning with its free templates and AI-powered features. So what are you waiting for? Download your example and draft a perfect business plan.

From simple template to full finished business plan

AgPlan is an easy business plan app that anyone can use.

Son Lux: Change Is Everything from Nathan Johnson on Vimeo .

100,000+ business plans have been created using AgPlan

- AgPlan makes it easy for you -

• Develop your own Business Plan
• Learn what you need to include in your Plan with Tips & Resources
• View Sample Plans for ideas
• Share your Plan — print, download and work with your own Reviewers

AgPlan Features

Business-type templates.

AgPlan is designed to provide customized assistance to different types of businesses.

• Ag - Commodity
• Ag - Value-Added
• Organic Transition
• Personal Plan
• Small Business

Our feature-rich type editor acts just like your computer's word processor. For each section of your business plan write a concise statement that will let readers quickly understand the key points you want to communicate.

Tips, Resources & Samples

Each section of your AgPlan business plan includes Tips, Resources & Samples to help you create the best business plan possible!

AgPlan allows you to share your business plan and interact with your business advisors, educators, or consultants.

Introduction to AgPlan video

Developing Your Business Plan with AgPlan – video series

A business plan is your opportunity to tell the world about what your business is all about.

• How do I get started writing my plan?
• What type of information do I need to include?
• Do I really need a business plan?

"Developing Your Business Plan" will teach you how to tell your story when creating your plan.

Start Watching

Watch the Introduction to AgPlan video

Small Business Trends

How to create a farm business plan.

Writing a Farm Business Plan Template: 15+ Things Entrepreneurs Should Include

Executive summary, goals and objectives, introduction, mission statement and values of your farming business plan, industry history, company background and history, competitor analysis, target market, products and services, organization, human resources, and management plans, swot analysis, growth strategy, financial plan, marketing strategy, establishing a farming business entity, detailed description of farm operations, risk management strategies, sustainability and environmental impact, community involvement and social responsibility, supply chain and vendor relationships, technology and innovation, training and development plans, expansion and diversification, exit strategy, frequently asked questions.

Do I Need a Business Plan for My Farm?

How do i write a small farm business plan, how do you start a farm business plan, how much do farm owners make a year, how much does it cost to start a small farm, what is the most profitable farming business.

Farm Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 3,500 farmers create business plans to start and grow their farm businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a farm business plan template step-by-step so you can create your plan today.

Download our Ultimate Farm Business Plan Template here >

What is a Farm Business Plan?

A business plan provides a snapshot of your farm business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Farm

If you’re looking to start a farm business or grow your existing farm business you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your farm business in order to improve your chances of success. Your farm business plan is a living document that should be updated annually as your company grows and changes. It can be used to create a vegetable farm business plan, or a dairy farm, produce farm, fruit farm, agriculture farm and more.

Source of Funding for Farm Businesses

With regards to funding, the main sources of funding for a farm business are personal savings, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a farm business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Finish Your Business Plan Today!

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of farm business you are operating and the status; for example, are you a startup, do you have a farm business that you would like to grow, or are you operating a chain of farm businesses.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the farm business industry. Discuss the type of farm business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of farm business you are operating.

For example, you might operate one of the following types among others:

• Vegetable Farm : this type of farm grows a wide variety of vegetables (but not grains or soybeans) and melons in open fields and in greenhouses.
• Dairy Farm : this type of farm primarily raises cattle for milk. Typically, this type of farm does not process the milk into cheeses or butter, etc.
• Fruit Farm : this type of farm primarily grows fruits.
• Hay and Crop Farm : More than half of these types of farms grow hay, while a small number grow sugar beets. A variety of other crops, such as hops and herbs, are included in the industry. Some operators also gather agave, spices, tea and maple sap.
• Industrial Hemp Farm : this type of farm grows and harvests cannabis plants with a tetrahydrocannabinol (THC) content of less than 0.3% by weight.
• Plant & Flower Farm : this type of farm grows nursery plants, such as trees and shrubs; flowering plants, such as foliage plants, cut flowers, flower seeds and ornamentals; and short rotation woody trees, such as Christmas trees and cottonwoods.
• Vertical Farming : This type of farm involves growing crops in vertically stacked layers, often using controlled environment agriculture (CEA) technologies. This method dramatically reduces the amount of land space needed for farming and can increase crop yields.

In addition to explaining the type of farm business you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, acquisition of additional acreage, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the farm business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the farm business industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards decaffeinated farm business consumption, it would be helpful to ensure your plan calls for plenty of decaffeinated options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your farm business plan:

• How big is the farm business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your farm business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your farm business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: food manufacturers, grocery wholesalers, retail grocers, restaurants, individual consumers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of farm business you operate. Clearly food manufacturers would want different pricing and product options, and would respond to different marketing promotions than retail grocers.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other farm businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes processed foods, imported goods, and growing produce themselves. You need to mention such competition to show you understand the true nature of the market.

With regards to direct competition, you want to detail the other farm businesses with which you compete. Most likely, your direct competitors will be farm businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior products?
• Will you provide products that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your products?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a farm business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of farm business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to wholesale crops, will you also offer subscriptions to individuals?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the products you offer and their prices.

Place : Place refers to the location of your farm. Document your location and mention how the location will impact your success. For example, is your farm centrally located near gourmet restaurants and specialty grocers, etc. Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate farm stands, detail the locations where the stands will be placed.

Promotions : the final part of your farm business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your farm stand extra appealing to attract passing customers
• Distributing produce samples from the farm stand or at farmers markets 
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites 
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your farm business such as serving customers, delivering produce, harvesting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or acquire more arable land.

Management Team

To demonstrate your farm business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in farming. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in farming and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per week or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your farm, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 supplier contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for seed, equipment, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a farm business:

• Location build-out including barn construction, land preparation, etc.
• Cost of equipment like tractors and attachments, silos, barns, etc.
• Cost of nutrients and maintaining machinery
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Your new farm’s business plan must include a detailed financial plan based on reasonable assumptions of your costs and revenues. To determine if the results you show in this plan will be attractive to investors, look at industry standard financial metrics to see how you measure up against the farming industry, or your sector of the industry, on average. These are some basic measures and ratios to study.

Value of Production

The value of production is equal to your farm’s cash receipts plus the changes in value of product inventory and accounts receivable, less your livestock purchases. This is a measure of the value of the commodities you have produced in the period.

Net Farm Income

The NFI or net farm income, represents the value of production less direct and capital costs in the time period. This is a dollar figure, and not a ratio relating the income to the investment made, so it cannot be used to compare the farm against other farms.

Gross Margin

This represents the NFI less depreciation. The gross margin shows how much money is available in the year to cover the unallocated fixed costs, and dividends to owners and unpaid operators.

Return on Farm Assets

This is a ratio that can be used to compare the farm with others. This is calculated as NFI plus interest expense less unpaid operator labor, all divided by the total assets of the farm.

Asset Turnover Ratio

This ratio is equal to the value or production over the total farm assets. Combined with the operating profit margin ratio, this shows the efficiency of the farm in generating revenues.

Operating Profit Margin Ratio

This ratio is similar to Return on Farm Assets, but divides the same numerator (NFI plus interest expense less unpaid operator labor) by the value of production figure. This shows the percentage of each revenue dollar that becomes profit. If it is low, a higher turnover can compensate, and if it is high, a lower turnover ratio is required.

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Farm Business Plan Summary

Putting together a business plan for your farm business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. It can be used for a small farm business plan template or any other type of farm. You will really understand the farm business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful farm business.

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Agriculture Farm Business Plan

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Botanical Bounty

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

The health and vitamin industry is growing at a very quick pace. Customers want to have natural and plant alternatives to medication. They are starting to believe the body is a temple. They don’t want to pollute with chemicals. The industry needs botanical plants that are ready to process as well as give to nurseries for the “do it yourselfers”.

Botanical Bounty is working hard to become a leading producer of botanical plants for the natural supplement industry as well as plant nurseries.

Botanical Bounty has three distinct customers: supplement companies, processors of botanicals for supplement companies, and nurseries that resell the plants.

The first two customers purchase the plants for use in their products which they ultimately sell to the end consumer.

The market for natural supplements is quite exciting. Surveys show that over 158 million consumers (over 55% of U.S. population) use dietary supplements. An estimated 115.3 million consumers buy vitamins and minerals for themselves, and 55.8 million purchase them for other members of their family, including children. Consumer surveys consistently find that nearly half of all Americans now use herbs – a statistic that is particularly remarkable when we realize that today’s herbal products industry is just over a quarter century old.`

Competition

Competition takes two forms, farms similar in size and production capacity to Botanical Bounty and megafarms. The similarly sized farms range in size from 5-30 acres. The number of different herbs grown varies from a handful to upwards of 50. The choice of plants grown is based on owner preference as well as location and the ability of the local growing conditions to support the different plants.

It is Botanical Bounty’s mission to become the leading provider of botanical perennials to the health/vitamin industry. This will be accomplished by providing quality plants at fair prices while exceeding customer’s expectations.

Expectations

To finance our growth and full-time production, we need to purchase $35,000 worth of new equipment as long-term assets taking that total up to $53,800. To that end, we are seeking a $100,000 10-year loan. Sales forecasts conservatively indicate that $190,000 revenue will be generated in year two, rising to over 400,000 by year 4.

Financial Highlights by Year

Financing needed.

We need to have a $100,000 10 year loan. We will use our $35,000 of cash from our current operations.

Problem & Solution

Problem worth solving.

There is a growing trend towards plant cures to common diseases or health issues.Consumers care about getting a natural supplement to make them feel better and take care of their body. Because of this the natural market has grown exponentially in the last few years. The market needs high quality botanicals to keep up  with demand. 

Our Solution

Botanical Bounty has identified three keys that will be instrumental in their success. The first is the implementation of strict financial controls. By having the proper controls, production efficiency will be maximized. The second key will be the never ending pursuit for the industry’s highest concentration levels of botanical ingredients in each plant. The third key is the recognition and implementation of the philosophy that 100% customer satisfaction is required to ensure a profitable business. Profits are a by product of satisfying customers, not the other way around.

Target Market

Market size & segments.

Botanical Bounty has identified three different target market segments: 

Supplement Companies This customer group manufactures botanical supplements for their own label products. The companies purchase the plants and extract the active ingredients and transform them into sellable products for their own brand. There are a handful of large companies that operate in this market space. Ten years ago there were many different ones but through consolidation the industry has grown in size but decreased in the number of different players.

Processors These customers purchase the the plants, extract the botanicals and either sell the concentrated botanicals to the end producers or they themselves produce the supplement and sell the final product to other companies for their private label products. In essence they are the subcontractor for the supplement companies. These companies therefore are one layer within the manufacturing system and do not sell to the end consumer. They act as a supplier/processor for the retail brands.

Other Nurseries/Garden Centers This customer group purchases the plants which they in turn sell at retail to the individual end consumer. The typical consumer is a health conscious individual who is interested in either extracting the botanical from the plant immediately or growing the plant in their own garden for future use.

Current Alternatives

As mentioned previously, competition takes two forms, farms similar in size and production capacity to Botanical Bounty and megafarms. The similarly sized farms range in size from 5-30 acres. The number of different herbs grown varies from a handful to upwards of 50. The choice of plants grown is based on owner preference as well as location and the ability of the local growing conditions to support the different plants.

On the other end of spectrum is the megafarm. These farms have a similar range of species cultivated, however they differ greatly in production capacity. These farms are huge, typically not less than 100 acres, peaking at 300 acres. These growers however are few number.

The buying patterns of the different customers are typically based on these variables:

• Availability
• Ability to deliver consistently on long-term contracts
• Significant % of active ingredients
• Consistency

Our Advantages

Botanical Bounty has a dual competitive edge:

Healthy Plants The healthier the plant, the faster it will grow, the more botanicals that can be extracted from it. This means an increase in production efficiency due to a larger percentage of plants that are sellable. Other characteristics of healthy plants which are important on the production side is: lower pest counts, more established root structures, and high biomass.

High Concentration of Active Botanicals This is beneficial to the purchaser because they are buying the plants precisely for the active botanicals. High concentration levels are valuable to Botanical Bounty because they increase the amount of botanicals produced per plant or per acre, increasing the production capacity of a given amount of land, thereby increasing their return on investment and increasing the attractiveness of Botanical Bounty’s plants relative to the competition.

Keys to Success

Our keys to success are: 

• Strict financial controls.
• The never ending pursuit of the highest concentration of botanicals in every plant.
• Ensuring that all customer’s needs are met and they are satisfied with the purchased products.

Marketing & Sales

Marketing plan.

Botanical Bounty’s sales strategy efforts will focus on identifying qualified leads and turning them into paying customers. The main sales effort that Botanical Bounty will undertake is the reinforcement of the fact that Botanical Bounty’s plants have the industry’s highest percentage of botanicals. This will be quite appealing to the buyers as this is exactly what they want, more botanicals per plant. In addition to selling the buyers on Botanical Bounty’s competitive edge of potent plants, there will be an emphasis on Botanical Bounty’s ability to perform on long-term contracts.

Botanical Bounty recognizes that the transactions should not be thought of as individual sales, but as long-term relationships. This is a reasonable assumption based on the fact that the customers are in the business of utilizing botanicals, that they will continually have the need for the botanicals, and that it is far less expensive to establish a relationship with one vendor than to continually have to find new vendors that can meet their needs.

Locations & Facilities

Botanical Bounty is a 10 acre farm that concentrates on the growing of botanical medicinals. Botanical Bounty has chosen five plant species that have significant market demand as well being well suited for growth in the Willamette River Valley. Botanical Bounty will feature: Echinacea – an immune system booster; Ginseng – a source of energy; St John’s Wort – for mild depression; Skullcap- for inflammation; and Ginger – a stomach soother.

Milestones & Metrics

Milestones table.

Key Metrics

Our key metrics are: 

• Sales, cost of sales, expenses, profits, and cash.
• Production cost of goods. We need to keep them low.
• Keep current on our competitors botanical concentration and prices.
• Measure the number of emails and phone calls.
• Measure the Facebook Page views and Twitter re-tweets. 
• Measure website searches and inquiries. 

Ownership & Structure

Botanical Bounty is an Oregon L.L.C. owned by David and Susan Nealon. The L.L.C. business formation has been chosen as a strategic way to shield the Nealons from personal liability.

Company History

Botanical Bounty has been in operation for two years. Initially it was started as a hobby where Susan could use her plant biology skills while covering some of the costs. The Nealon’s were able to achieve this lifestyle due to a windfall that David received as a result of exercised stock options. After the second year, the Nealon’s decided that although they had the money to live on for many years, it would be irresponsible to needlessly spend it so they got serious about the business and made a concerted effort to become profitable.

Botanical Bounty has chosen the Willamette River Valley as an ideal place to grow perennials. Botanical Bounty has 10 acres of land which they use for production. During several of the winter months, production is moved into their green house for propagation. Botanical Bounty employs a drip irrigation system for all of the plants.

Management Team

Botanical Bounty will be lead by the husband and wife team of David and Sue Nealon. David brings a wealth of business and project management skills to the company. While working at Yahoo!, David was responsible for the successful launch and market lead capture of Yahoo!s driving directions section. Utilizing these skills, David will be responsible for the business operations of the farm. Sue, with a background of plant biology will be the driving force of the operation, growing the highest active ingredient content plants in the country. Additionally, because of her wealth of knowledge, she will be the leader of the sales department.

Personnel Table

Financial Plan investor-ready personnel plan .">

Key assumptions.

Our key assumptions 

• Our market and customer base are growing and with them the opportunities for sales.   
• The area has wealthy households that can afford to spend money on non essential vitamins.   
• Our customers appreciate our dedication to high quality products and price controls.   
• We will be able to get the 100,000 dollar loan at 8 percent based on our past success and being able to put our property up as collateral. We are a safe investment. If unplanned expenses pop up we have people interested in investing.

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

We will be using the loan to purchase machines and to expand our farm and our personnel to grow the highest quality botanicals and process them so they can be turned into vitamins or other products that give the  customer a natural cure. 

Sources of Funds

We are leveraging our business to get an $100,000 10-year loan. We will also be using the cash on hand from our current business. 

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement

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Tactical Menu

Incorporating conservation provisions in leases.

Ray Massey Extension Professor, Agricultural Business and Policy Extension

Jacob Hefley Field Specialist, Agricultural Business and Policy Extension

Adopting conservation practices on leased land can benefit both the landowner and the tenant. However, differences in landowner and tenant goals can create potential tensions around conservation practice adoption. Understanding these tensions and incorporating specific clauses in lease agreements can address the tensions and provide confidence that each party’s objectives are recognized.

Both tenant and landowner need to understand and agree on proposed conservation activities because both parties have an interest in preserving the quality and productivity of farmland. A tenant, aiming to maximize crop profitability, may seek a conservation practice that would benefit productivity. A landowner, aiming to maximize land as an investment, may seek a conservation practice that preserves and improves land value. Either the tenant or landowner can initiate a discussion about conservation practices. Neither should take a unilateral action.

MU Extension publication G421, Conservation Provisions in Leases , presents introductory information on talking with your tenant or landowner about including conservation activities in a lease. This guide includes topics that should be discussed and understood prior to incorporating conservation practices into a written land lease. This assumes that the lease discussion has begun, and tenant and landowner are seriously considering incorporating one or more conservation practices into the lease. Sample lease wording for various conservation considerations is provided at the end of this guide.

Conservation and lease topics that require thoughtful discussion, consideration and documentation include:

• Outside contracts with the governmental agencies or ecosystem markets (i.e., entities that pay farmers to manage their land in such a way as to provide benefits to soil, water, biodiversity or carbon credits)
• Responsibilities of both tenant and landowner to incorporate a successful conservation plan
• The life of the conservation practice relative to duration of the lease

Outside contracts

Several federal, state and local government agencies have programs that compensate farmers for conservation practices on agricultural land.

The U.S. Department of Agriculture (USDA) Natural Resources Conservation Service (NRCS) pays farmers for implementing conservation practices through the Environmental Quality Incentive Program (EQIP). Each NRCS conservation practice specifies the activities that need to be completed and the payment rate for those practices. The USDA Farm Service Agency enters into contracts lasting 10 or more years through the Conservation Reserve Program (CRP). The CRP provides cost share on conservation practice establishment costs and pays an annual rental fee for the duration of the CRP contract.

Nongovernmental organizations (NGOs) may offer payment to farmers for easements that specify how a tract of land must be managed (e.g., wildlife habitat protection). Ecosystem markets may also pay farmers for implementing certain land practices, such as using no-till or planting cover crops.

Contracts with outside entities specify what activities can or cannot be done, payment rates and schedules, and the term of the practice (single year to an indefinite period). Most contracts pay the farmer after an initial activity (e.g., grass planted, pond constructed, fence installed) is completed. Some contracts specify that if the conservation activity is not maintained during the specified term of the agreement or plan, payments will be forfeited and, in some cases, past payments must be returned.

Legal concerns

The landowner is almost always involved in signing conservation contracts because conservation practices often involve permanent land improvements.

A tenant can initiate a contract with an outside party but will usually need to get written agreement from the landowner to finalize the contract. A lease contract lasting until or beyond the term of the conservation contract may be needed to demonstrate landowner agreement and to protect the tenant from the risk of financial penalties required after the expiration of the lease.

The landowner usually is assumed to have the right to contract for conservation practices on owned land. However, this may not always be permissible when the land is legally leased. For example, a landowner must receive consent from the tenant before signing a CRP agreement with the USDA.

USDA contracts typically only pay for work that is complete. After the work is completed, USDA contracts do not normally require maintenance of the improvement. CRP is one exception to this stipulation in that the contract specifies conditions that must be met even after establishment of the conservation practice is completed. Soil and Water Conservation District contracts also have maintenance requirements. Not meeting ongoing maintenance requirements can result in financial penalties.

NGO and ecosystem market contracts typically require the conservation practice be maintained for the life of the contract. Whoever signs the contract with the outside party is responsible for all contract requirements. This condition is important if either the tenant or the landowner think the other may do something to endanger contract compliance.

Landowner and tenant responsibilities

Conservation practices often entail an upfront investment followed by ongoing maintenance activities. Agreement on who is responsible for initial investment and maintenance must be discussed, agreed upon and documented in the lease.

Initial investment may require creation of a conservation plan and cataloging of required labor, equipment and supplies. If the activity (e.g., installation of tile, planting of a grassed waterway) will be hired out to a third party, the landowner is likely to pay the bill. On occasion, the tenant may choose to pay for the third-party work. If the tenant uses personal time and equipment to install the conservation practice, the tenant needs assurance of compensation for that labor and equipment-use. How to repay the tenant for any unrealized benefit from the conservation practice should be discussed, agreed upon and documented in the lease.

Maintenance of conservation practices may be slight or significant. Slight maintenance may simply be refraining from damaging the improvement (e.g., not driving on saturated grassed waterways). Significant maintenance can involve repair of structures, replanting and weed control. Who will conduct and pay for necessary supplies for maintenance should be discussed, agreed upon and documented in the lease.

The first legal concern is ensuring that a practice is permissible. Leases often state activities tenants can and cannot do. Permanent changes to the land (e.g., installing grassed waterways, ponds and buildings) require landowner approval before installation.

Each party needs to understand potential liability for their actions before each agrees to the conservation practice in the lease. Damage or destruction of a conservation practice by either tenant or landowner may involve significant costs to repair and penalties for not fulfilling the contract (mentioned above).

Duration of lease

Most conservation practices requiring land structural changes persist many years. Most land leases are for one year. However, more than 60 percent of leased land has been farmed by the same tenant for more than seven years — indicating that conservation can be incorporated into standard lease agreements. The tenant will likely control the land for the life of the conservation practice; the landowner will likely have the same tenant for the life of the conservation practice.

Landowners may want assurance the tenant will be willing and able to carry out a conservation practice before committing to that practice on their land. A landowner signing a long-term contract for conservation (with government agencies, NGOs or ecosystem markets) will need the tenant’s commitment to implement and maintain the practice.

Tenants may be hesitant to invest time and resources on a conservation practice that will not directly benefit their business. They are likely to want assurance that they have sufficient years to recoup their investment in the conservation practice or that they are reimbursed for their contribution if they lose the lease on the land.

Tenants may seek long-term leases when conservation practices are incorporated. However, landowners have often been hesitant to sign long-term leases. Concerns with long-term leases expressed by landowners include removing a tenant for subpar performance, the ability to make necessary changes in lease terms or rental rates, and difficulties when selling or distributing land via inheritance prior to the end of the lease.

A critical part of a successful lease incorporating conservation provisions is that both landowners and tenants understand how a conservation practice will impact production in each year.

Written leases specify when the lease ends and how it could be extended. Neither tenant nor landlord need to take specific actions for the written lease to end on the date specified in the agreement — unless the lease indicates otherwise.

Oral leases complicate land management plans exceeding one year. In Missouri, generally, a verbal lease is not valid for more than one year. However, a verbal land lease that is extended past one year automatically becomes a year-to-year tenancy that continues until the landowner gives proper termination notice to the tenant. Missouri statute states that the landowner give notice to terminate a year-to-year lease 60 days prior to the end of the current lease year. Therefore, although a year-to-year tenancy may exist, the lease can be terminated prior to realizing the conservation benefits or the conservation contract’s ending.

Additionally, an oral lease greatly increases the likelihood of misunderstanding, confusion or disagreement over each of the landowner’s and tenant’s responsibilities with respect to the conservation practice. Without a written agreement, the landowner and tenant are forced to rely on memory and their recollections of the agreement. Experience suggests that memories fade and what once seemed clear becomes hazy with the passage of time.

The death of the contractee impacts USDA conservation contracts. If a landowner has a contract with the USDA (e.g., CRP or EQIP), the heirs can continue the contract or notify the USDA that they want to end the contract on their land.

Death of either tenant or landowner can create special problems for an oral lease containing conservation provisions. Missouri law specifies that when one party dies, the other party cannot testify to the terms of the agreement in court. This means that special reimbursement provisions, unless written down, may not be enforceable. Written contracts benefit both the landowner’s and tenant’s heirs by documenting the original decisions made.

Similarly, if the farm is sold while the conservation provision or plan is in place, special reimbursement provisions may not be binding on the new owner if the provisions weren’t disclosed during the sale process. A written contract avoids this scenario.

Contract provisions

The following lease clauses are examples of wording about conservation practices that may be used to create or modify a lease. These are provided to demonstrate how conservation might be included in a lease agreement. Not all of these clauses are relevant to all leases.

• "The tenant is not responsible for any specific conservation practice on the land other than following good farming practices (see the USDA Risk Management Agency definition for crop insurance coverage) and conservation compliance (as defined by the USDA NRCS) unless the lease or valid addendum specifies a conservation plan has been attached."
• "The tenant agrees to maintain, at tenant’s cost, conservation compliance and abide by any conservation plan that has been approved by [entity approving the conservation plan]." It is recommended that the conservation plan be attached as an addendum to the lease.
• "The tenant agrees to maintain, at tenant’s cost, compliance with the provisions of the attached ecosystem contract: [contracting entity and contract identifier]." It is recommended that the ecosystem contract be attached as an addendum to the lease.
• "The tenant agrees to perform all obligations imposed upon the property by the attached conservation plan and ecosystem contract in exchange for [insert reimbursement or payment language as appropriate]."
• "The tenant will compensate the landowner for any penalties or repayment requirements resulting from tenant failure to abide by conservation practices and ecosystem contract provisions that are specified in this lease (via lease agreement or addendum)."
• "If the tenant, for any reason, ceases to lease the land, the tenant will be released from, and the landowner will assume, the conservation contract obligations and benefits, including all payments and penalties."
• ◻ Minimum till
• ◻ Practices that are expected to leave [specify percent] of crop residue until planting time
• ◻ Plant and maintain cover crops
• ◻ Other ____________________________"
• "The landowner will pay for all materials needed to maintain the conservation provisions. Payment will be made within [specify number] days of receiving an invoice from the tenant or input supplier."
• "The tenant will provide labor and equipment necessary to maintain the conservation provisions at tenant’s cost."
• "The tenant is responsible for all repairs, including purchase of necessary supplies and remediation, when agricultural activities or equipment cause damage to conservation practices."
• "The landowner will reduce rent by the following schedule to compensate for the cost of adopting and managing the conservation practice. Rent reductions are not in effect if not specified on the schedule below. [Include a schedule similar to Figure 1.]"

Figure 1. Example rent reduction schedule.

• "This lease can be terminated following notice and an opportunity to remedy if the tenant does not follow good farming practices (see USDA Risk Management Agency definition for crop insurance coverage) or violates any provision of the lease."
• "Should the landowner terminate the lease for any reason prior to the agreed upon date in the lease, the tenant will be compensated for conservation improvements on the land according to the following schedule. [Include a schedule similar to Figure 2.]" Note: Download the spreadsheet for automating the calculations in Figure 2 .

Figure 2. Example tenant contribution reimbursement schedule.

1. The tenant should value materials, labor and machinery (and possibly management) contribution. 2. This is the number of years the improvement is expected to contribute to production. It is not the length of the lease or the life specified in tax forms.

Landowners and tenants can both benefit when their responsibilities concerning conservation practices are specified in a written land lease.

Written leases also facilitate longer-term leases that can accommodate the life of conservation practices. Because conservation practices may provide benefits well beyond the establishment year, tenants have an interest in a lease length that will allow them to benefit from improvements they make to the land. Conservation practices improving the land benefit landowners by maintaining or improving land values, productivity and soil health.

In addition to a well-written lease, maintaining a record of communication (i.e., notes from personal meetings, texts, emails, letters) provides documentation on specific details that were discussed and agreed to between tenant and landowner.

Incorporating language about conservation practices into a written land lease provides another reason that leases should be written.

Related programs

• Agricultural Business and Policy Extension

Related publications

• Basics of Farm Lease Agreements
• Conservation Provisions in Leases
• Crop-Share Leases in Missouri
• Flexible Cash Leases in Missouri