Debt Free Farming and Ranching

Holistic Management: So You Want To Be Debt Free!

Stop spending money. Start any new enterprises small and pay for them out of current cash flow . Let them grow from retained earnings. Be debt free on some things if not everything. Have credit card debt? Pay off the one with the highest interest first. Interest rates all the same? Pay off the one with the smallest balance. Stop eating out. Don’t buy snacks at the gas stations. Learn to stock up when things you need are on sale or buy in bulk at SAM’S CLUB. Grow your own vegetables and fruits. Learn to butcher your stock yourself. Trade home butchered meats with friends and families for goods and services you may need. Add a woodstove to your house and heat with wood. There’s plenty of wood laying around all over the countryside. Instead of bulldozing old buildings over and burning the mess tear it down and save the lumber for future building needs. Boards that aren’t any good for lumber can go in your stove. Reuse old fence posts and barbed wire. They might not last forever but they can keep you from spending more money now. Too many cedar trees? Cut them for fence posts. White Oak and Black Locust should work good too. Have a second house? Rent it out. Either by the month for folks to live in or to people on vacation by the night. Drive your cars and trucks longer if they’re still reliable. There is a drastic difference in costs to plate and insure an older vehicle vs. a new one. Learn to at least do the maintenance yourself. Car wears out buy another just like it and use the old one for parts. Learn to do home repairs yourself. Most are pretty simple but can be expensive to hire done. Before buying anything constantly ask yourself do I really need this? Will this really help me make or save money?

Driving old vehicles, avoiding restaurants and gas station snacks. Save and reuse just about everything. When I tell people I'm farming on 80 acres they think I'm a little daft. Everyone just automatically knows that it takes thousands of acres to make a living. What they don’t know is that when we make a profit on animals and feed that money is mine. The land is paid for and my livestock is paid for. One or two of those cows are Jersey’s so our household doesn’t have to pay for milk, butter or cream.Let’s run one ewe for every cow to clean up the weeds. Maybe a few hogs in the old hog house and some laying chickens scratching through their manure giving us free eggs for our table and a few extra to sell. Maybe we raise a few chickens for ourselves and neighbors. If we use old depreciated out buildings that we piece back together we can do a lot of enterprises at a fairly low cost. Lets go ahead and heat with firewood that eliminates a good chunk of cash we need every winter. Let’s do most of our vehicle maintenance and repairs ourselves. Are we working full time? YES! Are we making a lot of money? We’re making enough.

I've never really understand all the folks taking off to work in town to make a living then come home and work to make a farm payment on a lot bigger farms than ours. I imagine that there are a lot of farmers and ranchers whom could work on their farm full time if they scaled back. Sell everything off to the point where you’re equity will allow you to be debt free and then move forward. In other words look at what you’re equity in land, livestock and equipment is. Now think for a moment about how many acres and cows you could own debt free if that was all the land and cows you owned. Now since you don’t have a land payment anymore, and you don’t owe on the cows either when you sell those calves the entire sales price is yours. Would it be enough to make a living? Would it be enough if you had a flock of sheep to clean up the weeds the cows didn’t eat. What if you could use Management Intensive Grazing to increase your stocking rate? Would you rather cut firewood and turn wrenches to save money or drive to town for a job? Remember the more you stay put on the farm the less you spend on gas and the longer your vehicles last.

Still want to work in town? Can’t bring yourself to sell land? How about this; cut the herd back to the point where you are debt free on the herd. Rent out your excess pasture or contract graze it. Buy cows and ewes debt free with the profits. Good luck!

Christopher Marlowe

Originally printed in 2004 Knox County Educator's Edition