What it costs to start farming

Most people who want to farm can do the farming. The hard part is the money. This lesson sets out what you'll need to pay for, so you can see the size of the job before you start.

The four big costs

There are four big costs in a new livestock business.

1. Land. This is the biggest cost by far if you buy it. Most new farmers don't buy land at first. The next lesson covers the ways around it.
2. Stock. The animals you'll run. If you lease land, stock is often your main cost.
3. Plant. The gear you need to do the work. Think a bike or side-by-side, dogs, yard panels, a drench gun and a trailer.
4. Working capital. This is the cash you need to pay the bills until your stock are sold. It's the one people forget, and the one that catches them out.

Getting a feel for prices

Free farm budgets from NSW DPIRD (the NSW Department of Primary Industries and Regional Development) give you a starting point. The 2025 budget for first-cross ewes uses $248 a head for replacement ewes and $2,000 for a terminal ram. A terminal ram is a meat breed ram whose lambs are all sold, not kept.

Those are guide prices for that budget, not quotes. Prices change week to week. Ring a stock agent for what's selling in your district this month.

Why working capital matters so much

Farm income comes in lumps. You might sell lambs once a year, or steers once they reach weight. But fuel, rent, drench and the phone bill come every month. Working capital is what carries you through the gap.

The way to find the right amount is a monthly cashflow. That's a list of the money going in and out each month, with your bank balance at the end of each one. We cover it in lesson 4.

What you can put off

You can put off buying land. You can buy second-hand plant, or borrow gear from a neighbour at first. You can't skip working capital. Starting without enough cash is one of the most common ways a new farm business gets into trouble.

Start with your own numbers in the free start-up budget spreadsheet. For more detail, read our guide to getting started in farming.