Edition #13

September 30, 2023

Good morning and welcome to the Braintrust Ag newsletter. Where we bring you the delicious farm & ranch business info you need…fresh off the vine.

A few notes to begin:

• If you’d like an invitation link to join the community platform sent to you, throw your email address in here.

• Friendly reminder to slow down and think of safety during this harvest season. Your family cannot replace you.

• Lifetime, unlimited access pricing is going up in October 🚀. If you haven't already done so, join now to take advantage of the introductory price of $99.

Alright, let’s get to the topics that will help you build a strong, sustainable agri-business.

-Clint

Here’s what we have this week:

• 🐴 Custom Work & Manure

• 🌱 Seeds

• 📃 List of Costs

• 👴 Elder Law

• 🧮 Resources

• and more…

“AG-ADJACENT” SIDE HUSTLES Part 3

Idea Breakdown

We’re going to continue looking at some ag-adjacent side hustles and do a breakdown on them.

Catch up on the first installment, the second installment, and the third by clicking the links.

Let’s dive in.

Custom Work

Description: One of the most obvious and common ag-adjacent side hustles is hiring out your equipment + labor to perform custom tasks on someone’s farm. Often, small to mid sized operators will hire specific things done, so they don’t need to invest in purchasing expensive specialty equipment that’s used sparingly.

While the list is almost endless, here’s some of the more common tasks that are hired out on farms and ranches across the globe:

Services:

• Tillage

• Mowing

• Spraying

• Dirt Work

• Moving Snow

• Hauling Livestock

• Harvesting Forages

• Fertilizer Application

• Planting, Drilling, & Seeding

• Harvesting, Drying, & Hauling Grain

Start-Up Costs: Medium/High

Depending on the services offered investing in the specialty equipment needed to hire yourself out, can be costly. Because weather and time windows are short to accomplish many of these tasks, it’s important to invest in quality, reliable equipment to avoid downtime when hiring your services out.

The Good:

• Durability

• High demand

• One-person jobs

• Word of mouth advertising

• Tried & true business model

• Proximity to landowners, farmers, and ranchers

The Challenges:

• Seasonality

• Travel radius

• Tight timing windows

• Equipment costs/rental availability

• Breakdowns, maintenance, and labor

Here’s what I’d do:

Choose a specific niche that is in demand, but not overly common in your geographic region. For instance, grass & alfalfa seeding.

Research and find a quality, reliable used piece of equipment, in our case a drill. Hang flyers, talk to neighboring farmers, post in local Facebook groups, and take out a cheap ad in the local paper.

If your custom work will include applying a product, consider finding a wholesale dealer (or become one yourself) and offer a package deal to the farmer/rancher. i.e. Calculate the seeding rate of alfalfa, source the seed and mark it up 20%, deliver and seed the field. The goal is to make it so all the customer has to do is two steps: 1) hire you, and 2) write a check.

Use the local extension service list of Custom Rates to price your services. (Here’s Iowa State’s)

As your ag-adjacent side hustle grows, consider upgrading equipment or offering other services that compliment your current custom work venture. As an example, if you’re custom chopping silage, grow until you have the chopper, trucks, packing tractor(s), and sell the tarps and offer to cover the pile. A full service business will allow for multiple profit centers within this venture.

Keys to Success:

• Flexibility

• Make it a package deal

• Timeliness and work quality

• Low debt & high equipment maintenance

Conclusion

This ag-adjacent side hustle checks the box on our two-part test, which is:

1. Does it compliment your current or future farm enterprise?

2. Does it put you in proximity of other farmers & landowners to build relationships?

Custom work is not a new or novel idea, but often we’re limited in what line of work folks are willing to hire out. Specialize in one area, become the best in your region, take care of your equipment, and you’ll be able to justify your machinery purchases for your own farm, because the return on asset will be maximized.

Mini Breakdown

Acreage/Hobby Farm Manure Hauling

In many areas of the country, folks are leaving suburbia and heading to the country to live on a handful of acres. The idea of a couple horses, a few sheep or goats, or even some miniature cattle seem attractive to many acreage and hobby farmers. Until they realize there’s a catch: those critters leave behind manure and it’s a pain to clean up after them.

That’s where you come in: you will offer to come to their acreage, clean up their barns, pens, and lots, and dispose of their manure.

Here’s what I’d do:

1. Get my hands on a small, ground driven manure spreader that can be pulled by a UTV/ATV or pickup

2. Rent a small skidsteer with a manure bucket

3. Schedule spring and fall clean-ups for every acreage and hobby farm in my area

4. Bill the equipment rental to the acreage owner and charge for my time and fuel

5. Clean, haul away, and spread the customer’s manure

6. If they don’t have an area to spread it, consider hauling it away in a dump trailer to my own compost pile - then, sell compost to gardeners

This one has a relatively low start-up cost to it, higher labor needs, and the potential to hire unskilled young people to scale your business.

Do you have an ag-adjacent side hustle idea you’d like to see a breakdown on? Email [email protected] and it might be featured in an upcoming newsletter.

RESOURCES UPDATE

A handful of resources available for download I’d like to highlight:

Crop Insurance Calculator

A quick and easy Revenue Protection/Loss calculator that can be customized to your farm.

Located: Resources > Miscellaneous > Crop Insurance Calculator

Crop Share Lease Proposal Playbook

This is a step by step approach to initiating a meeting with a potential landlord and proposing a mutually beneficial crop share lease. Including a worksheet to help structure a lease proposal calculation.

Located: Resources > Buying & Leasing Farmland > Crop Share Lease Proposal Playbook

Farm Business Entities Guide

Comprehensive guide to help you choose which farm business entity is right for you.

Located: Resources > eBooks > Farm Business Entities Guide

SEEDS

• 🔄️ Massive Merger: In what is the largest ag-tech deal ever, AGCO acquired 85% of Trimble for ~$2 billion. AGCO will now be able to combine Trimble’s retrofit tech products with its Precision Planting technology to expand its offerings of ag-tech products.

• 🐂 Cow-Calf Insurance: A new livestock risk management insurance product was announced through the USDA. Weaned Calf Risk Protection offers APH coverage for cow-calf producers to protect their spring calf crops and will be available in 2024.

• 💲 Government Grant: Here’s a step-by-step guide for small scale meat and poultry processors to apply for the USDA’s MPPEP grant that is open until November 22, 2023.

• 🐝 Beekeeping Business: One retired Indiana couple turned a beekeeping hobby into a growing business. Here’s their story and some tips for starting your own bee business.

•  📈 Economic Insight: Terrain is a website powered by Farm Credit Service which provides ag economic analysis, reports, and tools for farmers and ranchers.

• 🦌 Cool Story: John Deere, one of the most iconic names in agriculture, got his start by inventing and producing the steel plow. Two moldboard plows hand-built by and purchased directly from Deere himself sit on an Iowa farm.

FINANCE

You’ve heard it stressed, “you’ve got to know your numbers.” One aspect is understanding your breakevens.

A breakeven gives the price or yield needed for revenue to equal ALL costs to earn that revenue.

Formula:

• Breakeven Price = Total Cost/Expected Yield

• Breakeven Yield = Total Cost/Expected Price

But often we forget to include some of the costs associated with production.

Here’s a list of costs you can use for better planning, budgeting, and decision-making:

ESP SPOTLIGHT

Endorsed Service Providers are pivotal to the Braintrust Ag community. These industry experts know their professional services niche and how they directly impact farmers, ranchers, and other ag business owners. This week, I’d like to direct your attention to our newest ESP, Alex Vasichek with Elevate Financial.

If you’d like to learn more about the ESP program, click here.

SUCCESSION/TRANSITION

Some thoughts on Long-Term Care

-from Elder Law Attorney, Jennifer Rozelle:

If you have not heard, long-term care, including home health care, is incredibly expensive. This is to not shame long-term care facilities and/or home health care companies because after all, they provide a much-needed service and benefit to the elderly population. In fact, without them, many of us would involuntarily end up becoming caregivers. Nonetheless, long-term care is an expensive venture. There are really only four ways to pay for long-term: 1) private pay (meaning you pull out your checkbook and pay every month); 2) long-term care insurance (which many do not have); 3) family chipping in (not a fun option for the family!); and finally, Medicaid.

Because many do not love those options, a popular reason people visit an elder law attorney’s office is to gain a better understanding of affording long-term through benefits like Medicaid. To clarify, not Medicare. Medicare will not pay for long-term care; Medicaid will, so long as you follow their rules. In order to qualify for Medicaid, their rules are very specific in regards to someone’s income and assets – and that is why you see an elder law attorney. The rules are complicated and an elder law attorney’s responsibility is to help you understand those rules and how they apply to a client’s situation.

Medicaid has different rules that apply for single individuals compared to a married couple; they have rules on income; rules on assets; and beyond that, states have different rules, too. This is why there are many misconceptions about Medicaid. You may talk to your cousin in Texas about what she did for her parents, and you may be here in Indiana with just one surviving parent. They could have one small fact that is different, which could cause them to operate by one set of rules. So, while it seems like a good idea to ask family and friends for tips, an elder law attorney is the perfect resource to help you navigate through the rules and present realistic options that solve the issue at-hand.

MEME OF THE WEEK

That’s a wrap, folks.

Until next week, thank you to everyone involved in ag. Come engage on the new platform & let’s grow profitable ag businesses together.

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DISCLAIMER: All content, communications, and resources provided by Braintrust Ag, its principals, operators, or members is intended to merely be educational and entertaining. Nothing published by Braintrust Ag should be relied on as legal, financial, investment, or other professional advice. Investments and legal matters involve substantial risk and are not suitable for all individuals. It is recommended to enter into a client relationship with an ESP for obtaining professional advice.