Dutch Hollow Acres

January 23, 2023January 23, 2023

Writing A Business Plan for Livestock Producers

Part 1 In our 2023 Hobby to Profit Farm Series

A business plan is a crucial tool for any entrepreneur, and it is especially important for those looking to start a livestock farming business. A well-written business plan will not only help you secure funding, but it will also serve as a roadmap for the growth and success of your farm. In this article, we will discuss the key elements of a business plan for a livestock farming operation, and provide tips on how to write a plan that will help you achieve your goals.

The first step in writing a business plan for a livestock farming operation is to conduct a market analysis. This section should include information on the current market for the type of livestock you plan to raise, as well as any trends or growth opportunities in the industry. It is important to understand the size of the market, as well as the target audience for your products. By conducting a thorough market analysis, you can identify potential customers and competitors, and develop strategies to differentiate your farm from the competition.

The next section of your business plan should focus on the operations of your farm. This section should include a detailed description of the day-to-day operations of the farm, including the facilities, equipment, and staffing needed to run the business. It is important to include information on your farm’s location, as well as any plans for expansion or growth in the future.

The management and organizational structure section of your business plan is also important. This section should include information on the management team and organizational structure of the business, including details on ownership and any key partnerships. This section will give investors and lenders an understanding of who is running the business and how it is structured.

The financial projections section of your business plan is critical for securing funding. This section should include projected income statements, balance sheets, and cash flow statements for the first three to five years of the business. It is important to be realistic and conservative in your financial projections, and to include a detailed explanation of the assumptions and calculations used in your projections.

Finally, your business plan should include an appendix with additional information such as resumes of key team members, detailed farm layout and design, and any other relevant documentation. This will provide a more in-depth understanding of your farm’s operations, management, and financial stability to any potential investor.

In conclusion, writing a business plan for a livestock farming operation requires a great deal of research and planning. By focusing on the key elements of market analysis, operations, management, financial projections, and supporting documentation, you can develop a comprehensive plan that will help you secure funding and achieve your goals. With a solid business plan in place, you can build a successful and sustainable livestock farming operation.

Example of a very simple Business Plan

Executive Summary: Livestock farming is a profitable business that can provide a steady income for farmers. Our farm will focus on raising high-quality beef cattle, with the goal of supplying local grocery stores and restaurants with fresh, locally-sourced beef. Our target market will be consumers who are looking for natural, hormone-free meat options. Our main objective is to become a reliable supplier for local businesses and to establish a strong brand in the community.
Market Analysis: The demand for natural, hormone-free meat options is on the rise as consumers become more aware of the health benefits of consuming grass-fed beef. The market size for grass-fed beef in the United States is projected to reach $27 billion by 2024. Our farm will be located in an area with a strong demand for locally-sourced beef, and we plan to target the growing niche market of consumers who are willing to pay a premium for natural, hormone-free meat.
Operations Plan: Our farm will be located on a 100-acre parcel of land and will include a barn, a milking parlor, and a processing facility. We will also have a team of experienced farmers and staff to manage the daily operations of the farm. We will use rotational grazing techniques to ensure that our cattle are getting the best quality grass, and we will also provide them with a balanced diet of hay and supplements. We will also have a strict biosecurity protocol in place to ensure the health and well-being of our cattle.
Management and Organizational Structure: The farm will be owned by a group of investors and will be managed by a team of experienced farmers. The management team will consist of a farm manager, a herd manager, and a marketing manager. We will also have a board of advisors to provide guidance and support. Additionally, we will establish partnerships with local grocery stores and restaurants to help market and sell our beef.
Financial Projections: We project that our farm will generate $1.2 million in revenue in the first year, with a net profit of $300,000. Our projected income statement, balance sheet, and cash flow statement are available upon request. We plan to reinvest a portion of our profits back into the farm to ensure its long-term sustainability.
Appendices: The appendices will include detailed information such as resumes of key team members, detailed farm layout and design, and any other relevant documentation such as the farm’s biosecurity plan, sustainable farming practices, and more. This will provide a more in-depth understanding of our farm’s operations, management and financial stability to any potential investor.

January 13, 2023January 13, 2023

IRS – Recording income Hobby vs Profit Farming

A hobby farm and a profit farm may seem similar on the surface, but they have very different tax implications. The IRS has specific guidelines to determine whether a farm is considered a hobby or a profit-making enterprise, and understanding the difference is crucial for farmers looking to maximize their income and minimize their tax burden.

A hobby farm is defined as a farm that is not operated with the intention of making a profit. These farms are generally run as a side business, and the income generated is considered supplementary to the farmer’s primary source of income.

On the other hand, a profit farm is a farm that is operated with the intention of making a profit. These farms are considered a primary source of income for the farmer and are run as a business.

It is important for farmers to understand the difference between hobby farms and profit farms because the tax implications are quite different. Hobby farms are subject to self-employment taxes, while income from profit farms is subject to regular income taxes. Additionally, deductions for expenses related to the farm are more limited for hobby farms than for profit farms. In this article, we will discuss the IRS guidelines for determining whether a farm is considered a hobby or a profit farm, and the tax implications of each.

Tax Implications:

Hobby farms, as defined by the IRS, are not considered profit-making enterprises, and as such, the income generated from a hobby farm is subject to self-employment taxes. This means that farmers will need to pay self-employment taxes on any income earned from the farm, in addition to regular income taxes.

When it comes to deductions, hobby farms have more limited options than profit farms. While hobby farmers can deduct some expenses related to the farm, they are not able to claim deductions for any losses that occur. This means that if a hobby farmer incurs a loss, they will not be able to use that loss to offset any other income they may have. Additionally, hobby farmers may only deduct expenses that do not exceed the income generated by the farm.

IRS Requirements to become a for-profit farm:

To be considered a profit farm by the IRS, a farm must show a profit in at least 3 out of 5 consecutive tax years. This is known as the “profit test.” Additionally, the farm must be operated with the intention of making a profit and the farmer must make a consistent effort to improve the farm’s profitability.

The profit test is used by the IRS to determine whether a farm is being operated as a for-profit business or as a hobby. It is important to note that the farm does not have to show a profit every year, but it must show a profit in at least 3 out of 5 consecutive tax years.

The intention to make a profit is determined by the farmer’s actions, including the time and effort they put into the farm, the expertise they bring to the operation, the expectation of appreciation in the value of the assets used in the farm, and the farmer’s history of making a profit.

The consistent effort to improve profitability is determined by the farmer’s actions to improve the efficiency and productivity of the farm, such as increasing revenue, reducing expenses or upgrading equipment.

It is important to note that even if a farm passes the profit test, it may still be considered a hobby farm if it does not meet the other requirements. In such cases, the farm income would be subject to self-employment taxes and have limited deductions for expenses.

Understanding the difference between hobby farms and profit farms is crucial for farmers looking to maximize their income and minimize their tax burden. Hobby farms are subject to self-employment taxes, while income from profit farms is subject to regular income taxes. Additionally, deductions for expenses related to the farm are more limited for hobby farms than for profit farms. To be considered a profit farm by the IRS, a farm must pass the profit test, be operated with the intention of making a profit and the farmer must make a consistent effort to improve the farm’s profitability.

Being considered a profit farm by the IRS comes with several benefits, including the ability to claim deductions for losses, and deductions for expenses related to the farm which can lower the overall tax burden. It is important for farmers to consult with a tax professional to determine whether their farm is considered a hobby or a profit farm, and to understand the tax implications of each.

December 29, 2022December 29, 2022

Goat Gestation Calculator

“This application will you calculate the due date for a goat pregnancy. Simply enter the breeding date of the goat, and the application will use a formula based on 150 days to determine the approximate date that the kids will be born. The application also calculates the date that the mother goat should receive a vaccination called CDT, which is typically given about a month before the due date. Give 2ml CDT SQ (under the skin). To use the application, you will need to fill out a form with the breeding date and submit it using the provided button. The application will then do the calculations and display the results to you.”

I hope you found this tool useful and happy kidding season!

December 27, 2022

5 Popular Meat Goat Breeds

Meat goats are increasingly popular as a source of meat worldwide, due to their versatility and sustainability as a livestock option. In this article, we will be exploring five unique breeds of meat goats: Boer goats, Spanish goats, Kiko goats, Myotonic goats, and Anglo-Nubian goats. Each of these breeds has its own distinct characteristics, history, and qualities that make it an excellent choice for meat production.

We will delve into the origin and history of each breed, as well as their physical characteristics such as size, color, and horns. We will also discuss the quality and flavor of their meat, as well as their popularity and demand as a meat source. By the end of this article, you will have a better understanding of the diversity and potential of meat goats as a valuable source of protein.

Throughout this article, we will highlight the unique features of these five breeds and how they contribute to the growing global demand for goat meat. Whether you are a farmer, a meat producer, or simply curious about the world of meat goats, this article will provide valuable insights and information.

Boer goats are a popular breed of meat goats that originated in South Africa in the early 1900s. They were developed by crossing indigenous goats with European breeds, with the goal of creating a hardy and productive meat goat that could thrive in the harsh African climate.

Boer goats are known for their large size, with adults weighing between 200 and 300 pounds. They have a distinctive appearance, with a white body and red head. Boer goats have long, curved horns that are used for defense and foraging.

The meat of Boer goats is highly prized for its flavor and tenderness. It is lean and well-marbled, with a rich, gamey taste that is characteristic of goat meat. Boer goats are also known for their high fertility and milk production, which makes them a valuable asset to farmers and meat producers.

Boer goats are in high demand as a source of meat, both domestically and internationally. They are widely raised in South Africa, as well as in many other countries around the world. In recent years, the popularity of Boer goats as a meat source has increased significantly, due to their versatility and adaptability as a livestock option.

Spanish goats, also known as brush goats or scrub goats, are a hardy and adaptable breed of meat goats that are native to the United States. They are believed to have descended from goats brought to the Americas by Spanish explorers in the 1500s.

Spanish goats are small to medium in size, with adults weighing between 100 and 200 pounds. They have a wide range of coat colors, including white, black, brown, and red, and they may have short or long hair. Spanish goats have short, straight horns that are used for defense and foraging.

Spanish goats are known for producing lean, flavorful meat that is high in protein and low in fat. Their meat has a slightly sweet, nutty taste that is characteristic of goat meat. Spanish goats are also valued for their ability to thrive in a variety of environments, including brushy and mountainous areas where other livestock may struggle to survive.

Spanish goats are popular as a source of meat in the United States, and they are also raised for meat in other countries around the world. They are in high demand due to their hardiness, adaptability, and the quality of their meat.

Kiko goats are a breed of meat goats that originated in New Zealand in the late 1980s. They were developed by crossing local feral goats with imported dairy breeds, with the goal of creating a hardy, fast-growing meat goat that could thrive in the harsh New Zealand climate.

Kiko goats are large, with adults weighing between 200 and 300 pounds. They have a solid build, with a deep chest and strong legs. Kiko goats come in a variety of coat colors, including white, black, brown, and red, and they may have short or long hair. Kiko goats have short, straight horns that are used for defense and foraging.

The meat of Kiko goats is lean and flavorful, with a slightly sweet, nutty taste that is characteristic of goat meat. Kiko goats are known for their high fertility and growth rate, which makes them an efficient and productive choice for meat production.

Kiko goats are popular as a source of meat in New Zealand and other countries around the world. They are in high demand due to their hardiness, adaptability, and the quality of their meat. Kiko goats are well-suited to a variety of environments, including brushy and mountainous areas where other livestock may struggle to thrive.

Myotonic goats, also known as Tennessee Fainting goats or Stiff-Leg goats, are a breed of meat goats that originated in the United States in the late 1800s. They were developed by crossing local feral goats with imported dairy breeds, with the goal of creating a hardy, fast-growing meat goat that could thrive in the harsh Tennessee climate.

Myotonic goats are medium to large in size, with adults weighing between 150 and 250 pounds. They have a distinctive appearance, with a sturdy build and short, stocky legs. Myotonic goats come in a variety of coat colors, including white, black, brown, and red, and they may have short or long hair. Myotonic goats have short, straight horns that are used for defense and foraging.

The meat of Myotonic goats is lean and flavorful, with a slightly sweet, nutty taste that is characteristic of goat meat. Myotonic goats are known for their high fertility and growth rate, which makes them an efficient and productive choice for meat production.

Myotonic goats are popular as a source of meat in the United States and other countries around the world. They are in high demand due to their hardiness, adaptability, and the quality of their meat. Myotonic goats are well-suited to a variety of environments, including brushy and mountainous areas where other livestock may struggle to thrive.

Anglo-Nubian goats are a breed of meat goats that originated in England in the late 1800s. They were developed by crossing local dairy goats with imported Nubian goats from the Middle East, with the goal of creating a hardy, fast-growing meat goat that could thrive in the temperate English climate.

Anglo-Nubian goats are large, with adults weighing between 200 and 300 pounds. They have a distinctive appearance, with a long, narrow head and long, pendulous ears. Anglo-Nubian goats come in a variety of coat colors, including white, black, brown, and red, and they may have short or long hair. Anglo-Nubian goats have short, straight horns that are used for defense and foraging.

The meat of Anglo-Nubian goats is lean and flavorful, with a slightly sweet, nutty taste that is characteristic of goat meat. Anglo-Nubian goats are known for their high fertility and milk production, which makes them a valuable asset to farmers and meat producers.

Anglo-Nubian goats are popular as a source of meat in England and other countries around the world. They are in high demand due to their hardiness, adaptability, and the quality of their meat. Anglo-Nubian goats are well-suited to a variety of environments, including brushy and mountainous areas where other livestock may struggle to thrive.

In conclusion, meat goats are an increasingly popular source of protein worldwide due to their versatility, adaptability, and sustainability as a livestock option. There are many breeds of meat goats, each with its own unique characteristics and qualities that make it an excellent choice for meat production.

In this article, we have explored five of these breeds: Boer goats, Spanish goats, Kiko goats, Myotonic goats, and Anglo-Nubian goats. We have discussed their origin and history, physical characteristics, meat quality and flavor, and popularity and demand as a meat source.

While these five breeds are among the most popular and widely raised meat goats, there are many other breeds that are also highly valued for their meat production capabilities. Some of these include the Savanna goat, the Kalahari Red goat, and the Australian Meat Goat.

Overall, the versatility and growing popularity of meat goats as a source of meat is a testament to their value as a sustainable and efficient livestock option. Whether you are a farmer, a meat producer, or simply a fan of goat meat, there is a breed of meat goat that is sure to meet your needs and preferences.

January 3, 2022January 4, 2022

What Does It Cost? – Starting A Goat Farm

Happy New Year! With the year starting off fresh, it means tax season and checking on how the farm did. 2021 was my first full official year into goat ownership so let us take a look at what I spent to get started in my goat adventures and what my projections are for the future.

A few things about my goat business model. I picked the myotonic goat for a few reasons which were mentioned in this video. So who is my customer base? Small size and the fainting factor make these a novelty breed for family pets. My first priority of sales is as pet and breeding stock. My projections are based on the selling to this market vs meat price at auction.

You can click on the photo to make it bigger but here’s the low down on what this sheet means.

Initial cost of purchasing my foundation herd. This includes cost of the animals themselves, shelters, fencing, registration, feed etc. This number came out to just about $5,500! Not a small chunk of change! But it got me 6 girls and 2 boys.
I started out by purchasing 2 bred does who did kid out without complications. My hope was for girls but mother nature gave me 3 boys and 1 girl. UGH. I sold the boys on cheap just to get them off the farm. I didn’t want to feed or house them and the longer they stayed the more they’d cost me. I took the sale of those and subtracted it out from my initial costs.
On to projections for the future. I picked up a few young does who cannot be bred until late 2022 for 2023 kids. This leaves me with only breeding back my initial 2 does. Fingers crossed I get kids Spring 2022 which can be sold. The rest of the numbers are total guessing, as mother nature will tell me how many kids and what sex.
By year 3 I figure my young girls will kid out. Typically first freshening’s are single kids so I planned my sales projections accordingly.
Assuming nothing dies and I get at least twins, by year 4 this farm will start turning a very small profit on the goat side of things!

Good news, I have a waiting list for goat kids! I’m not to worried about having to keep baby goats around longer than weaning which should make my feed costs of foundation stock fairly consistent.

Looking at these projections one thing I can do to make things move along is hunt for some more 2/3 year old does either bred or ready to bred to add to the base herd. With the wait list I currently have this is on my to-do list for 2022.

What do the colors mean?

Left hand column, if you see “black” bold lettering this is the initial investment of animals, Fencing, and shelter. this is a fixed 1 time cost in my calculations

The lower half of the left column is “blue” bold. These numbers are reoccurring yearly. When working out my projections I always added this number to the previous years profit/loss before adding my sales projections to it. This is why it’ll take my a minimum of 4 years before I ever show a profit with my current herd of 6 does and 2 bucks.

These numbers also assume I follow standard kidding flows of 1 kidding a year. There are accelerated formats I could follow which allow for 3 kidding’s over a 2 year period. But for now I’m going to stick with 1 kidding in late winter early spring until I get a better feel for the process.

I hope my little sheet helps you understand the cost of being a small scale breeder. Please note I did not factor in any of the other costs such as my labor, taxes, insurance, power, mortgage, etc.

One thing about raising livestock are the razor thin margins to make a profit. Adding goats to my farm should add some income to compliment my other sources selling horses, eggs and mud control products. To raise and sell goats by themselves I’d need a MUCH larger herd.