Whether you run a small boutique farm or a large dairy farm, the industry offers some of the hardest and most rewarding work. With over 2 million farms in the U.S., agriculture business plays a very important part in the small business community.
Ready to take your agriculture business to the next level? Here are a few strategies that you can use to grow your business.
How the supply chain impacts agriculture businesses
The supply chain in the agriculture industry, also known as the food system, includes the network of farms, distributors, and retailers that help get food from your farm to your customers.
Most of the income in the supply chain is earned by distributors, and to a lesser extent, retailers. Food that’s grown by agriculture businesses passes through many layers of distributors before it gets to your customers. For example, grapes grown on the North Fork of Long Island will go through any number of distributors before reaching a grocery store in Pittsburgh.
Distributors are a necessary part of connecting your farm with hungry customers far and wide so that you can focus on your business operations. The good news is that customer behavior is beginning to change this system.
Customers want to know who their farmers are and where their food is grown. This can open up opportunities on multiple fronts for your business.
Enhancing your agriculture business products
Many food products that have low profit margins can earn higher profits when used to create new products. Fermentation, pickling, brewing, and distilling all take lower-margin farm products and convert them into high-margin products with high consumer demand.
New York, New Jersey, Connecticut, and Pennsylvania have all created programs that reduce the regulations on farm-made food products, allowing agriculture businesses to bypass distributors and earn more for their products.
Elevate your agriculture business with agritourism
Agritourism has many benefits for agriculture businesses like yours. You can generate substantial revenue from hosting guests on your farm, and you’ll increase the value of your products by making a direct connection with your customers.
There are many ways to include agritourism in your business such as:
- establishing on-farm tasting rooms
- hosting dinners on the farm
- scheduling retreats to learn about and participate in working on the farm
There are many new and creative agritourism concepts that come out each year. Agritourism has been promoted by creating agritourism regions, such as the Finger Lakes wine region. Your state and local counties may also have programming that can help your farm become more visible.
You can also try working with culinary universities teaching farm-to-table programs, and with farm-to-table restaurants to grow your agriculture business. Building these relationships can raise awareness of your farm’s products and create new revenue streams.
Participate in a CSA
Community-supported agriculture (CSAs) are a great way to create more stable income for your agriculture business.
Selling through a CSA provides a more-direct transaction with your customers rather than selling to the food distribution system. This means that your farm’s cost of sales will be lower, which can help boost your agriculture business’s revenue. Even better, customers who buy their groceries through a CSA buy an entire season of products at a time, so you’ll know exactly how much to grow ahead of time.
Government support for agriculture businesses
Farms tend to have longer cash flow cycles which makes it challenging to qualify for traditional financing. To support agricultural businesses, states and the federal government have created loan programs specifically-designed to fit the industry’s needs. Beyond lending, there are a wide variety of support programs to give agriculture businesses a boost.
Financing for agriculture businesses
The U.S. Department of Agriculture (USDA) has farm loan programs available to support your business from starting up to expanding in the future. In New York State, the JDA loan program is available to support farm expansion while Pennsylvania offers the AgriLink low interest loan program.
Trade programs for agriculture products
The USDA has representatives stationed in countries around the world to help U.S. agricultural businesses find buyers abroad. They also host trade missions that connect U.S. exporters with foreign customers while gathering market intelligence. Many people around the world trust and seek out produce, meat, and dairy farmed in the U.S.
Grants for agriculture businesses
New York, New Jersey, Connecticut, and Pennsylvania all have grant programs to support farm sustainability and development. Most of these grants are targeted to a specific need including climate resiliency, soil health, aiding BIPOC farmers, and technological or equipment improvements for farms.
Access and funding is key to growing your agriculture business
Whether you decide to join a CSA or start an agritourism program, reaching even more customers is key to growing your farm. Take time to explore what’s available through your local chamber of commerce or municipality to keep your agriculture business strong.
When you’re ready to expand your agriculture business, Pursuit is here to help! We offer more than 15 different business loans to fund your goals. Reach out to us today to see how we can help you.
