More recent agricultural economics questions and answers

Agricultural economics

Combination rate charges for farm services

Due to the volatility in fuel prices some of our local agriculture producers are considering a different pay structure for trucking services. Typically custom on-farm trucking is charged by the bushel, such as $0.10 or $0.14 per bushel. It has been proposed to go to a pay structure where the farm manager pays all fuel costs the custom truck operator incurs plus a percentage of either the fuel bill or a flat fee per bushel. Is this a viable idea?

Fuel prices are creating a number of problems for farm service providers. As you are aware, fuel is a major portion of the cost of trucking. Moving from a flat per-bushel trucking rate to a combination rate, $X per bushel plus Y percent of the fuel cost, for example, would be a fair way of charging. It would have the effect of shifting the risk of fuel price changes to the farm owner. If Y is less than 100 percent then the trucker has some incentive to minimize fuel usage.

In custom rate survey, we get a number of responses from people who indicate they use a combination rate of charging. The problem for us is that we rarely get enough respondents who are using the same combination to report it in G302, Custom Rates for Farm Services in Missouri.

Ron Plain
Department of Agricultural Economics

Goat grants

I want to start a goat business and have several excellent ideas. I need funding to help get started. What grants are available for new, small farmers?

First, I want to be sure that you realize grants are not just free money. There is a purpose and expected outcomes that come along with grants. With that being said, there are many grants available; it's just matter of locating them.

I suggest you read Getting Grants: Ten Things You Gotta Do to Get Money by Mark R. Bailey. This is the best information I've come across that gives the full insight to grants.

Look on the Missouri Alternatives Center Web site's G links page for grants and proposal writing. These publications should be very helpful.

Don't forget about financial assistance. There are several resources in Missouri that can be of help to you in the planning of your farm. Look on the Missouri Alternatives Center's F links page for finance.

Also, the Missouri Department of Agriculture has an alternative loan program.

Debi Kelly
Missouri Alternatives Center

AgrAbility assistance

My father is disabled and still living on his farm. He gardens and raises small livestock to the extent that he's able. A friend said financial assistance might be available through extension for purchase of a small ATV with a bed on the back, for persons with disabilities in rural Missouri. Is this true?

The AgrAbility Project assists people with disabilities employed in agriculture. The project links cooperative extension with a private nonprofit disability service organization to provide practical education and assistance that promote independence in agricultural production and rural living. The AgrAbility Project assists people involved in production agriculture who work both on small and large operations. However, the AgrAbility Program does not provide direct funding to farmers, ranchers, farm workers or their family members.

The Missouri AgrAbility project engages extension educators, disability experts, rural professionals and volunteers in offering an array of services:

Identifying farmers, ranchers or farm workers with disabilities and referring them to appropriate resources.
Providing on-site technical assistance on adapting and using farm equipment and tools.
Providing on-site technical assistance on modifying farm operations and buildings.
Providing agriculture-based education to help prevent further injury and disability.
Providing training to help extension educators and other rural professionals upgrade their skills in assisting farmers, ranchers or farm workers with diseases, disabilities or disorders.
Developing or coordinating peer support networks.

Those eligible for Missouri AgrAbility services may have any type of disability -- physical, cognitive or illness-related, For example:

Amputations
Arthritis
Back pain
Blindness or vision impairments
Cancer
Cardiac problems
Cerebral palsy
Deafness or hearing impairments
Diabetes
Mental retardation
Multiple sclerosis
Muscular dystrophy
Post polio syndrome
Respiratory problems
Spinal cord injury
Stroke
Traumatic brain injuries

If you are interested in receiving services (e.g., training, site visit, on-farm assessments, technical assistance, or information about working directly with the farmer, rancher or farm worker) from the Missouri AgrAbility Project, call 800-995-8503.

Karen Funkenbusch
Missouri AgrAbility Program

Small acreage income

I'm moving back to Missouri. I'd like to settle on 5 to 15 acres in the north central part of the state. My idea is to make my land productive and profitable. What are some practical things to do with small acreage? Can you recommend any particular crops and or livestock that would be inexpensive to start up and yet be profitable?

One of the main problems for people when they purchase land and want to do something with it to bring in income, is exactly what you're asking for -- direction in narrowing your choices.

I recommend that people look through a number of publications on the Missouri Alternatives Center's Web site. Look on the B links page for beginning farming and business, you will find tons of great information. I would suggest that you print off a copy for everyone who will be working the land with you. Read and answer the questions. Then compare your answers and compromise on the answers. This includes concepts of likes, dislikes, goals for the family, goals for the farm, etc.

Resources need to be looked as well and I mean more than just finances.

Once you have a bit of a grasp on these concepts than you can start to look at creating a business plan and a marketing plan for the different enterprises that you have selected. On the Missouri Alternatives Center's M links page look marketing and on the A links page look for agribusiness, you will lots of great information.

You must keep in mind that most alternative agricultural enterprises are successful because of direct marketing and great networks.

In Missouri, we are piloting a new program called the Farm Beginnings Program. This is a 10-month course with 34 hours of classroom time, a mentorship and farm tours. Participants will come away with hands-on experience, learn the whole farm planning concept and apply it to their farm and create a working business plan and marketing plan that can be taken to the bank if needed.

Debi Kelly
Missouri Alternatives Center

More recent agricultural economics questions and answers

Updated 1/11/08