Sample Business Plan on Farming Business Plan
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EXECUTIVE SUMMARY
The Business Concept
ABC Organic Farms, Inc. (ABC Organic Farms or the Company) is an organic beef raising operation that purchases beef cattle (heifers and steers) weighing 450-550 lbs. It then allows the animals to graze on the organic pasture and grow to 750 to 800 lbs. The cattle are then sold to a cattle broker. The Company is located in CITY, STATE.
CITY, STATE, is located in Jefferson County, approximately midway between Macon and Augusta. The county has a total area of 530 square miles. The area has many historic homes and a tranquil environment with a decidedly slower pace. Many residents choose to live on mini-farms out in the country. The land owned by the Company is ideal for grazing and feeding cattle.
Excellent Market Opportunity
ABC Organic Farms will take advantage of the large and growing demand for organic beef to drive its growth. Sales of the organic meat, from cattle that are not fed antibiotics, hormones or animal bi-products, are soaring, thanks to diet trends, the discovery of mad cow disease in the US a few years ago and word of mouth.
Consumer demand for high quality organic beef has been exceptional. Organic beef can be pricey, but more consumers are becoming aware that the health benefits of ingesting organic meats and produce outweigh the costs in the end.
Profitable Growth
ABC Organic Farms expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars, the number and kinds of distribution channels and the competitive landscape.
Projections call for the Company to generate revenues of $192,000 in its first twelve months. ABC Organic Farms will achieve strong growth over the next several years, reaching $1.15 million in revenues and more than $201,000 of net income by the fifth year.
The Opportunity
Beef Industry Growth
The United States has over 800,000 ranchers and cattle producers, according to research. Furthermore, production of beef cattle is the single largest sector in United States’ agriculture. Overall, in 2008 the beef industry in America consists of more than one million farms, ranches, and businesses, totaling meat production of more than $66 billion. 1
In 2007 beef cattle operations made up 31% of total U. S. farms. Beef production adds significant value to America’s economy; the following is a brief summary of statistics regarding the beef production market in the U.S.: (partially quoted) 2
s In 2007, there were more than 1 million cattle ranchers and farmers.
s Veal producers in 2007 totaled an estimated 800-900, according to the American Veal Association
s 97% of the U.S.’s beef cattle farms and ranches were family operated
U. S. Cattle Demand and Supply
s There were 94.5 million cattle in the U.S. on January 1, 2009;
s Over 660,000 cattle were harvested every week in the U.S. in 2008, totaling 34.4 million cattle;
s Production of beef in 2008 totaled 26.6 billion pounds;
s Cash receipts in the U.S. from cattle and calves in year 2007 were approximately $50.7 billion;
s U. S. total beef exports in 2008 were valued at almost $3.62 billion;
s In 2008 consumer beef spending reached $76 billion, up from $26.9 billion in 1999;
s Per capita beef, in retail and foodservice consumption, in 2008 was approximately $249; in 2001 consumption was about $50;
s Compared to 59.2 pounds of chicken consumed in 2008, per capita beef consumption totaled 59.9 pounds.
Clearly, American consumers love juicy steaks, roasts, and burgers, as well as other products made from beef. Recently, consumer confidence in beef products has been renewed. Beef offers impressive nutritional benefits and the demand for this product remains high. Research shows beef: (source: USDA)
Ø Is the number one contributor of protein, zinc, and vitamin B12 in our diet
Ø To get the same amount of zinc that’s found in a 3 oz. serving of lean beef, you would have to eat thirteen 3 oz. servings of salmon.
Ø You would have to eat 8, 3 oz. chicken breasts to get the same amount of B12 that one 3-ounce serving of beef provides.
Ø Beef is our second best source for vitamin B6, and number three of iron and niacin.
Ø Beef is an excellent selenium, as well as phosphorus and riboflavin; these nutrients are essential for human growth and development.
Ø A 3 oz. serving of lean beef will give you less than 10% of your calories in a 2,000-calorie diet, while supplying more than 10% of the Daily Value for these nutrients.
The retail market is dominated with beef sales in both volume (pounds) and total dollars spent. And, U. S. demographics reflects an aging population of 76 million baby boomers who have been raised on beef, (born between 1946 and 1964), also the strength of 51 million Generation X’s, the children of baby boomers (born between 1965 and 1976), and Generation Y (born from 1977 and 1994) totaling over 70 million individuals.
The following data overviews the beef industry’s impact on the U. S. economy:
Ø Fresh beef retail sales growth was 2.2% over 2007, totaling $15.5 billion in 2008;
Ø Beef accounts for over 52% of retail dollars spent on meat; chicken has 22% of the retail meat market;
Ø At retail, in 2008, 4.2 billion pounds of fresh beef was sold; a 2% volume growth from 2007;
Ø In 2008, beef accounted for 39.3% of the pounds of meat purchased at retail;
Ø Average price per pound for beef in 2008 was $3.69;
Ø Natural/organic beef sales for period ending March 29, 2009 comprised 1.8% of the total beef volume (pounds) and 2.7% of the total beef sales (dollars) in retail.