Eighty-eight percent of farms in the United States are designated as small farms, according to the U.S. Department of Agriculture (USDA). The designation doesn’t refer to size, though. Instead, they are considered small farms if the operator works part-time, the “annual gross income” is below $349,000 per year or the owner is retired.
Just because those farms are small doesn’t mean they don’t meet a significant need and turn a large profit. Select crops, such as bamboo, lavender and garlic, are being cultivated across the nation to meet a sizeable demand while occupying little acreage on a farm.
Cash Crops for Small Farm Profit
In this section, we’ll explore some of the best cash crops that small farm operators can grow in the U.S.
Already popular in Asia, bamboo is gaining popularity around the world for its variety of uses, such as fencing material, fabric and food. According to Grand View Research, the global bamboo market is worth almost $69 billion, and the demand for it has made it appealing to small farm owners in the U.S.
One reason that bamboo can be a great cash crop for small farm operators is that it is a renewable resource. Bamboo produces significantly more fiber than trees, regrows annually and captures much more carbon than a comparable timber. This makes bamboo great for the environment and farmers’ bank accounts.
Bamboo can be planted year-round, though your local climate may determine when the best time to plant is. In warmer climates, it may be best to plant bamboo in the cooler months of fall or spring. In colder climates, bamboo should be in the ground in early spring to give it enough time to grow and strengthen before the next winter.
While start-up costs are relatively high for bamboo, it yields great returns. Bamboo Garden, a national bamboo nursery, sells young bamboo in containers for anywhere from around $35-60 per plant, depending on the species. While this might seem like a large upfront investment, the cost of caring for bamboo is relatively low and the profits can be quite large. According to a citrus farmer who entered the bamboo business, caretaking costs for a mature bamboo farm are about $5,000 per acre. He estimated that an acre of bamboo can bring in $25,000 in the current market.
Perfect crops for beginning farmers are specialty mushrooms, such as oyster mushrooms. These fungi are considered some of the easiest to grow as they thrive both indoors and out. There is also good demand for specialty mushrooms. The USDA reported for the 2017-2018 crop season that specialty mushrooms totaled more than $106 million in total sales.
According to an article in BizFluent, startup costs for growing oyster mushrooms are low. Purchasing 100 mushroom spores should cost around $20, and if planting outdoors, you’ll need fresh cut tree logs on which to cultivate the spores. Growing indoors requires a bit more of a financial investment as proper lighting and temperature control are needed. Since fungi usually grows alongside moss on the side of trees in shaded forests, it’s important to mimic those conditions. Make sure the mushrooms are in shade and won’t get too hot, or else they’ll dry out. The ideal time of year to plant mushrooms, according to FreshCapMushrooms growers in Canada, is either the spring or fall.
An article on Morning Chores noted that preparing oyster mushrooms to grow can be labor intensive initially, but once a colony is produced, they’re pretty much self-sufficient, as long as they have the proper light, moisture and environment.
Because fungi grow fast and rejuvenate after harvesting, just 500 square feet can yield 12,000 pounds of mushrooms in a year. At the USDA’s reported price of $4.06 per pound, small farmers can earn almost $50,000 from their mushroom crop.
Another crop that can bring profit to small farm owners is lavender. Lavender is a native of countries by the Mediterranean Sea but can survive in colder climates, like in the Midwest. This flower is great for small farm operators because it can be sold in multiple ways to numerous customers. Lavender can be sold as-is, but it can also be processed into essential oils, body lotions and soaps. And each market has its own significant profit potential. Persistence Market Research has reported the lavender oil market alone is expected to rise to $124.2 million by 2024.
Per the National Center for Appropriate Technology (NCAT) common lavender can yield 1,000 to 1,500 pounds of buds per acre. When sold to consumers or businesses, that equates to anywhere from $6,000 to $15,000 in revenue. If distilled into essential oils and sold to consumers at retail, the revenue increases. One acre of common lavender can produce anywhere from three-fourths of a gallon to three gallons of oil, which translates to between $6,804 and $27,216 in revenue.
The demand for garlic has grown recently, and more than 500 million pounds were sold at wholesale domestically in 2017. According to the Agricultural Market Research Center, those garlic varieties sold for an average of $1.50 per pound.
Garlic should be planted in the fall and needs minimal care until it is harvested in the summer. Once sprouts become visible, the crop only needs to be watered a couple of times a week.
Like many specialty crops, the initial planting of garlic can be expensive. Modern Farmer reported it can cost upward of $18,000 per acre to plant 1,000 pounds of Music garlic, a hardneck variety with a peppery taste. When harvested, though, Magic garlic can bring in as much as $100,000 per acre, netting you a profit of $82,000. Additionally, bulbs can be saved back for the next crop, saving money on replenishing the crop.
Due to light planting seasons a decade ago, there has been a shortage in fresh trees during the holidays. CNBC reported the shortage has caused the prices per tree to raise, creating a short-term increase in demand. Even though the supply will likely level out as harvested crops are properly replenished, a steady demand is expected to remain.
Christmas trees can be grown from multiple types of conifers, such as balsam fir, Douglas fir and blue spruce. Establishing a grove of any of these trees is a big investment at first. The initial cost of purchasing saplings won’t be offset for several years as it can take six to eight years for a sapling to reach a height fit to sell. While waiting for a crop to mature, it’s important to continue planting saplings so that there’s an ample number of trees available to harvest each year.
When the trees are large enough to sell, the profit margins are well worth it. Part Time Money reported margins of 200 percent or more. Around 1,500 Christmas trees can be grown per acre, and according to a study of tree sales made with Square software, the average price of a tree went for an average of $73 in 2017. For that price, one acre can yield around $109,500.
One of the advantages of conifers is that they create multiple seedlings to re-plant for a future crop, according to the National Christmas Tree Association. Once you have your first harvest, you can start a new Christmas tree cycle without purchasing new seedlings.
How to Establish Your Own Small Farm Business Plan
If you’re hoping to start your own farm, there are many factors to take into consideration. From figuring out where to farm to establishing a team, you’ll find that even small farms take big planning.
Just like you would when starting any other business, you’ll need to put together a business plan. The USDA has provided tips on its website to help beginning farmers learn how to do so. These tips include:
- Establishing your farm’s legal structure and registering it as a business
- Acquiring the necessary permits and insurance plans
- Researching what resources could be available from state or federal sources
- Developing connections with potential purchasers of your products
- Going over your business plan with an advisor
Aside from a business plan, education helps when entering such a complex industry. In a survey, the USDA found that beginning farmers are now more likely than established farm operators to have a four-year college degree. That means farm operators who are just starting out take the lessons learned in the classroom and apply them to the farm. A four-year degree can help a small farm owner better understand the business behind farming, gain the communication and analytical skills needed to grow a farm business and learn the science of how a plant grows from a seed into a crop.
If you’re ready to start your own small farm or jump into a career in agribusiness, there’s no better place to start than with an online bachelor’s in agribusiness management from Illinois College. With transfer credits, you can finish major coursework in as little as 1.5 years. Our flexible online format allows you to balance your education with your busy professional life. With a degree from Illinois College, you can move into a career in agriculture sales, farm management or other related jobs with the USDA.