Considerations before diversifying your operation
By JERRY LITTLE
In times of agricultural economic downturn, some of us look for ways to increase our income by diversifying into something new or adding different agricultural endeavors to our existing operations. While diversification may sound simple at first, there are many questions you should ask yourself before jumping into a new enterprise.
No two farmers or agricultural operations are the same. Remember to think of diversification in terms of selecting the right enterprise for yourself and your operation instead of just choosing the latest fad or “miracle crop” that will supposedly bring immediate prosperity. Often these latter two only create success for a handful of producers but fail for the vast majority.
Be sure to choose an enterprise that you think you will enjoy doing or something that excites you. It will also need to be an endeavor your family or business partners also have enthusiasm for or are willing to do.
Once you have an idea, or a couple of ideas, you need to start thinking about the equipment and experience it would take to properly produce, and whether you already have some of the production requirements on-hand or at least a plan for accessing them. You also need to make sure there is a demand and market for this new product. You need to be comfortable with the risk of producing a new product and consider how quickly this new endeavor will return a profit.
The University of Kentucky Cooperative Extension Service has a publication, PRIMER for Selecting New Enterprises, which can help you answer these important questions to determine whether a particular field is right for you. The publication, developed by UK agricultural economists Tim Woods and Steve Isaacs, is available online at https://bit.ly/2v7XyxB and includes questions, score sheets and planning tools to help you determine the feasibility for adding a particular enterprise to your existing operation. You can also get a copy by contacting the Boyle County Cooperative Extension Service.
Jerry Little is the county extension agent for agriculture/natural resources.