There was a short article in the March, 2008 issue of "The Stockman Grassfarmer" on passive income for the farm or the ranch. The article relates some of the experience of Gregg Simonds who has gained a reputation for turning around ranches that were losing money. The main reason for the passive income according to Mr. Simonds is because, "Passive income combats commodity volatility." Of course the main implications of the article are for ranches or larger farms and I small diverse farms are really planning to be part of the commodity market, but there is something that can be taken away from this.Some of the passive income sources that Mr. Simonds used were gravel mining royalties (not going to happen on a 40 acre parcel) and cell phone towers (don't really want to look at that, and I doubt anyone wants to build one in the boonies). But, the main point of the article is about leased hunting. According to the article in areas like, "Texas, deer hunting leases can bring as much as $7 to $17 an acre and quail $12 to $20 an acre." In my part of Iowa some of those deer prices may even be higher because we are the home to a few world record bucks.
Mr. Simonds also goes on to say, "On many ranches, wildlife should actually be the centerpiece enterprise and cattle should be seen as a way to enhance the range for wildlife." Pretty interesting statement there, but again not very applicable to a 40 to 200 acre farm in Iowa. I the flip side there are a few hunting "ranches" in Iowa that are around 200 acres and up that focus on deer and pheasant with farming on the side.
Even though hunting, cell phone towers, or mineral rights aren't really opportunities I will be able to pursue on our farm I do like the idea of passive income, or more specifically non-animal/crop related income that is year round. I think one path towards having a successful sustainable small scale farm is finding ways to have income all year long, not just in the growing months or when you send animals to the butcher.
Some people obtain this year-round income stream by selling animals by the cut and finishing at different times of the year so they can have a supply of meat on hand. Others have added agri-tourism components to the farm that while they are somewhat seasonal do add year-round cash flow. On thing that I have considered if we did go the route of agri-tourism or something along the lines of a bed and breakfast is to work out lease deals with surrounding land owners. That would allow more land for things like hunting or wildlife watching. It would also help provide passive income for those farmers/land owners.
I believe some sort of year-round or passive income is an important part of a diversified farm. Joel Salatin may be a perfect example of this. While I do know that he could "make it" without any of his book writing or public speaking, I also know that it provides some year-round income and more diversification on the farm. Hmmm... maybe I need to write a book also ... Let's see, I could write about ... Oh, nevermind! I think I'll stick with something else. I have to many grammatical errors and to short of an attention span to write a book!
