Starting a Business in the Commercial Agriculture Industry

Crops grown on U.S. soil are part of what makes up the commercial agriculture industry. Crop demand changes as dietary practices and livestock feeding patterns change. New crops, such as the recent legalization of hemp, bring new agricultural opportunities to farmers. If you are starting a new business in the commercial agriculture industry, here are a few things to consider.

Overhead and Profit

When determining what crop or crops to plant, knowing your overhead and potential profit are important. Your overhead includes the cost of the seed, fertilizer, equipment, equipment management, irrigation system and maintenance staff. Property tax should also be factored in.

Your profit is what you have left after the crop has been sold minus all of your expenses. The expense report should also include the cost to plant a new crop in that space. A profit may not be seen in the first year of business. Ensuring that you have enough funding to afford several planting seasons is ideal.

Equipment

The cost of equipment varies depending on the crop or crops you’re growing. If you are growing items such as corn, wheat or oats, purchasing grain haulers is ideal. This allows you to transport the grains directly from the farm to a processing facility. When you plan to provide crop transportation, you will need drivers with the proper CDL license for the equipment.

Some of the equipment used is hand tools. Machinery is a big part of equipment as well as ATVs for land monitoring and security. Some of the equipment needed will be tractors, front-end loaders, wagons, augers, combines and spreaders. Fertilizing machines are also ideal to cover larger areas in a shorter amount of time.

Closing Thoughts

The agriculture industry is competitive. It is ideal to grow a crop that is not in a crowded niche. An example would be specializing in several varieties of one grain instead of growing several different grains. This allows you to perfect the growing process, optimize the soil and corner the market. When someone is looking for a high-quality product — they will look for an expert in growing that particular crop and you want that person to be you.

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