5 Tips for Young and Beginning Farmers for Sustainable Success in Agriculture

Are you looking to launch your own farming enterprise? Whether you grew up working alongside your family on the farm or are brand new to the industry, getting started can be both exciting and challenging. One of the biggest hurdles for new producers is securing credit early in their agricultural careers. To help ease the process and set you up for long-term success, Farm Credit of the Virginias offers these essential tips for young and beginning farmers.

1. Develop a Cash-Flow Budget

Creating a cash-flow budget is a foundational step in planning your farm business. It not only helps you understand your financial outlook but also demonstrates to lenders that you’re a sound investment. A simple, one-page budget should outline your anticipated income and expenses for the year, including your salary and projected profitability.

You can begin working on your budget even while employed elsewhere. To get started, explore the crop and livestock budget templates from Penn State Extension.

2. Create a Solid Business Plan

A well-crafted business plan shows that you understand the scope of your venture, including the time, resources and capital required. For new farmers, starting with a basic outline is perfectly acceptable. You can refine and expand your plan as you gain experience.

This document is key to gaining the confidence of lenders and other stakeholders. Use this business plan template from Penn State Extension to get started. Our loan officers and the Farm Credit Knowledge Center are also available to guide you through the process.

3. Practice Smart Saving Habits

While it may seem obvious, disciplined saving is especially important in agriculture. Farming is a cyclical business with significant upfront costs, such as planting crops or purchasing livestock, and delayed returns. Learning to save for specific goals, like renting your first piece of land, prepares you for the seasonal nature of farm income.

Demonstrating your ability to save and manage capital responsibly builds lender confidence and shows that you can adapt your lifestyle to meet the demands of farming.

4. Build and Leverage Your Network

Starting a farm business can feel overwhelming, but you don’t have to go it alone. In fact, collaboration is essential. Connecting with other farmers, mentors and industry professionals helps you build expertise, focus your efforts and increase your chances of success. 

Expanding your network doesn’t have to be complicated. It can start with something as simple as picking up the phone to connect with your local extension agent, striking up a conversation with a feed store employee or attending community events where other farmers gather.

Your current circle of friends, family, neighbors, etc. can be a valuable source of guidance and encouragement. Additionally, your support system will likely include trusted professionals whose expertise you rely on, such as an agricultural accountant, attorney, lender, seed rep, vet, insurance agent and others. These relationships are essential to building a strong foundation for your farm business.

5. Understand and Improve Your Credit Score

While Farm Credit of the Virginias considers a range of factors when evaluating loan applications, your credit score still plays a role. Before applying for financing, review your credit reports and address any discrepancies.

Check your reports from the three major credit bureaus (Equifax, Experian and TransUnion) and verify that all information is accurate. Look out for errors in personal details, trade lines, inquiries, public records and collections. If your score needs improvement, consider these tips:

• Pay bills on time (set up auto-pay if possible)
• Keep credit balances low relative to limits
• Avoid opening multiple new accounts in a short period
• Focus on reducing outstanding debt
• If rate shopping for a loan, do so within a short timeframe

No matter where you are in your agricultural journey, Farm Credit of the Virginias is here to support you. As a dedicated partner to young and beginning farmers, we offer the tools, services and guidance you need to succeed. If you have questions or need assistance, call us at 1-800-919-3276 or visit us online. We’re here to help you grow!