Looking for a pig farm business plan? You're in the right place.
A hog farm spends money months before it sells anything, so a lender or investor will ask three things first. How much cash does the farm need before the first hog is sold? How many animals does the herd have to produce to cover the payroll? What happens if pork sells slower than hoped? A blank template won't show what a sensible answer looks like.
In this article we'll walk through a complete sample plan for a pastured heritage pig farm in Iowa, section by section: the executive summary, the market, the buyers, how the pork is sold, how the herd is run and, in particular, all of the financials.
Here's what you'll take away:
- The executive summary: see how to state the herd, the raise and the first profitable year on one page
- The market and SWOT: learn how to position a small farm against commodity pork without pretending to compete on price
- The sales channels: see how shares, retail cuts and restaurant accounts each earn a different margin on the same hog
- The start-up budget: find out why the biggest line is cash in the bank, and how much a farm needs before its first sale
- The first year, month by month: spot the five months with no sales and plan your cash around them
- The herd and hog flow: check that the sows you plan can actually produce the hogs you forecast
- The five-year financials and downside case: have an answer ready for "what if sales run 20% short?", with the steps the owners take
If you're planning a livestock farm, read this before you write your own. The farm is fictional, so take what fits and change the rest.
In this plan
If you need a pig farm business plan template for your own plan, start it in the Toolkit.
The Farm at a Glance
Golden Harvest Farms is a pasture-based heritage pig farm in central Iowa. It opens on January 1, 2027 with 30 bred Berkshire-cross gilts and three boars on 100 leased acres, buys feeder pigs to fill the finishing paddocks until its own litters grow up, and sells pork three ways: whole and half hog shares, retail cuts and monthly pork boxes, and primals and sausage for restaurants and grocers. John Peterson runs the herd, Maria Rodriguez runs sales and the books, and the farm is an LLC owned 75% by the two founders and 25% by two local family investors.
The farm raises $560,000: $150,000 from the founders, $170,000 from the investors and a $240,000 ten-year term loan from a local agricultural lender. Of that, $214,000 buys fencing, shelters and equipment, $58,500 covers breeding stock, the first feed order, licensing, legal work and the launch, and $287,500 stays in the bank.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $304,500 | $551,205 | $734,914 |
| Net income after start-up costs | ($177,140) | ($28,501) | $13,201 |
| Closing cash | $127,270 | $79,251 | $76,340 |
The farm sells 200 hogs in 2027 and 430 in 2029. Nothing sells before June, because a feeder pig bought in January needs about five months to finish. Years 1 and 2 lose money, and Year 3 is the first profitable year, at $13,201 on revenue of $734,914. That margin is thin, and the plan says so.
The downside case tests it. If sales run 20% below plan and feed costs rise about 8%, and the owners hold back hiring, cut pay and marketing, stop adding breeding stock and pay no distributions, the farm stays cash-positive in every year and turns profitable in Year 4.
Its pitch is narrow. The pork is finished on the farm's own pasture, buyers can name the farm and the breed, and prices follow the weight of the animal and not the commodity market.
Land, Structure and Aims
Legal name: Golden Harvest Farms, LLC, an Iowa limited liability company. Owners: John Peterson and Maria Rodriguez (75% together) and two local family investors (25% together). Land: 100 leased acres of pasture and hay ground with a farmstead, a shop and a house lot, on a ten-year lease with a right to renew; 40 more acres from Year 3. The landlord's written consent covers the fencing and shelters the farm builds. Stage: pre-opening. The lease is in draft, the hoop shelters are ordered and 30 bred gilts are reserved with a Berkshire breeder.
The herd and what it sells
| Line | How it is priced | Share of Year 1 revenue |
|---|---|---|
| Whole and half hog shares | $6.00 a pound hanging weight, about $1,200 a hog | 28% |
| Retail cuts, farm store and monthly pork boxes | About $12.50 a pound across all cuts, about $1,875 a hog | 62% |
| Restaurant and grocer accounts | $5.50 a pound hanging weight, about $1,100 a hog | 11% |
| Breeding stock and weaner pigs | From Year 2 | 0% |
Aims for the first three years
- Finish 200 hogs in 2027, 340 in 2028 and 430 in 2029.
- Raise nearly all hogs on the farm by 2028, with no feeder pigs bought after 2027.
- Reach net income after tax in 2029 and begin owner distributions in 2030.
- Grow the breeding herd from 30 sows to 52.
Rules that shape the business
Iowa's Meat and Poultry Inspection Bureau describes two routes for pork. Animals slaughtered at a custom plant for the owner's household use are not inspected, and the meat is marked "not for sale". Pork sold to anyone else must be inspected before sale, and state-inspected product may be sold only within Iowa, while interstate sales need a USDA-inspected plant. The farm uses the inspected route for retail and restaurant sales, sells only inside Iowa, and structures its shares as the sale of a live animal before slaughter. A lawyer drafts the share contract, and the plant confirms how it records ownership. County zoning, manure handling and any permit tied to animal numbers are confirmed with the county and counsel before the lease is signed.
Iowa Pork From the Farm Gate
Where the commodity chain leaves room
Iowa is widely reported to lead the country in hog numbers, and USDA's National Agricultural Statistics Service publishes the current count. Much of that pork is likely raised in large confinement barns for national packers, which sets a price that a farm of 30 sows cannot match. The plan does not try. It sells to buyers who want to know the farm, the breed and the feed, and who will pay for a pig raised on pasture.
What sets prices here
The plan sets its own prices from the hog's weight: $6.00 a pound hanging weight for shares, $5.50 for restaurant and grocer accounts and an average of $12.50 a pound take-home across retail cuts. These are the plan's figures, not market quotes. Direct-market pork prices vary by cut, breed and buyer, and the farm tests its price list at its first markets before it commits to the second batch of feeder pigs.
The choices a buyer has
| Alternative | What it offers | Why a buyer picks it | How the farm differs |
|---|---|---|---|
| Commodity pork at the grocery store | Low price, every cut, every day | Convenience and price | A named farm, a breed and a pasture system |
| Grocery lines sold as welfare-certified or pasture-raised | National brands, steady supply | Familiar label | A farm-gate relationship and a visit on request |
| Other direct-market pig farms | Similar breeds and channels | Established customers | Pork boxes by subscription and chef accounts from year one |
| A local locker plant or butcher selling its own pork | Local, often sourced from nearby farms | Trust in the shop | Whole-animal shares at a fixed price per pound |
The table describes what each option offers and how the farm positions itself, with no ranking implied. Brands and prices change, so none is quoted.
Strengths, weaknesses, openings and threats
| Strengths | Weaknesses |
|---|---|
| Founders with herd and food-sales experience | Two founders carry every job in the first year |
| Shares pre-sold before slaughter | Nothing sells for the first five months |
| Home-raised hogs cost less than bought-in feeders | One processing plant is a single point of failure |
| Openings | Threats |
|---|---|
| Restaurants asking for named-farm pork | Feed prices that move faster than the farm's prices |
| Subscription pork boxes that repeat | A disease outbreak in the region |
| Buyers who want a whole animal at a fixed price per pound | A larger direct-market farm cutting prices |
The Buyers
Households that buy by the share
Buyers of a half hog are families with a chest freezer, who want about 70 to 100 pounds of pork a year at a known price per pound. The farm expects 110 share buyers in Year 1, 30 whole hogs and 80 halves, which together are 70 hogs.
Households that buy by the cut
About 440 households buy cuts at farmers' markets, the farm store or through a monthly pork box in Year 1, spending an average of $425 each. They shop for the breed and for bacon and sausage more than for roasts, which is why retail is priced on a blended $12.50 a pound.
Restaurants and grocers
Seven accounts in Year 1: restaurants that print the farm's name on the menu and one independent grocer. Each takes about four hogs a year as primals and sausage. They are the lowest-margin channel and the one that tests quality week after week.
What each buyer asks of the farm
The pork has to match the label, the cuts have to be consistent, pickup and delivery days have to hold, and a person has to answer the phone.
Four Ways Pork Leaves the Farm
Per-hog economics
| Year 1 prices | Price per hog | Direct cost | Left before overhead |
|---|---|---|---|
| Share (buyer pays the plant) | $1,200 | $288 | $912 |
| Retail cuts and boxes | $1,875 | $825 | $1,050 |
| Restaurant and grocer accounts | $1,100 | $528 | $572 |
Retail leaves the most dollars per hog before overhead, and it also needs the stall, the freezer space, the van and most of the driver's time. A share needs none of those. Restaurant accounts leave the least and are kept for the fixed volume and the menu credit they bring.
How a share sale works
Buyers reserve with a deposit before the pigs reach finishing weight, own the animal before slaughter and pay the balance at pickup. The first deposits are taken in January. The farm books plant dates four to six months ahead, because small plants tend to fill their calendars. Hogs go to the plant in groups of 8 to 10, and the buyer collects from the farm's cooler container.
Retail and pork boxes
Farmers' markets run from May to October, the farm store opens on Saturdays, and a monthly pork box of bacon, chops, sausage and a roast goes to subscribers by pickup or local delivery in the van. Online orders are for Iowa pickup and delivery only, which keeps the farm inside the state inspection rules.
Prices through the year
Prices are fixed for 2027 and rise 3% a year from 2028. The farm does not discount. A slow month is met with a tasting, a box promotion or a sausage sale.
Breeding stock and weaner pigs
From Year 2 the farm sells surplus gilts and weaner pigs to other pasture farms: about 8 gilts and 40 weaners in Year 2, rising to 16 gilts and 100 weaners in Year 5. The income never exceeds 3% of revenue.
Getting Known Before the First Hog Sells
What marketing costs
Year 1 marketing is $25,000: $13,000 of launch spending paid from start-up funds and $12,000 of running cost. That is 8% of Year 1 revenue, 3% by Year 3 and 2% by Year 5. Across about 560 buying households and accounts in Year 1 it comes to roughly $45 per customer.
| Item | Year 1 spend | What it is meant to do |
|---|---|---|
| Brand, website and online ordering (launch) | $7,500 | A site that takes share deposits and box subscriptions |
| Market tent, display and first-season samples (launch) | $3,500 | A stall that looks the same at every market |
| Opening-day farm tour (launch) | $2,000 | A first look for share buyers and chefs |
| Local social media and email | $4,000 | Pork box sign-ups and reminders |
| Chef outreach and tasting dinners | $2,500 | Seven restaurant and grocer accounts |
| Farm open days | $1,500 | Share reservations for the second batch |
| Signs, labels and local print | $1,500 | Recognition at markets and the farm store |
| Community events and sponsorships | $1,500 | Local referrals |
| Local search advertising | $1,000 | Pickup and delivery inquiries |
Marketing milestones
- January 2027: website live and the first 40 share deposits taken.
- June 2027: first hogs sold and the first market stall.
- July 2027: first restaurant and grocer accounts.
- December 2027: holiday boxes and hams, with monthly sales of $77,275.
Pasture, Herd and Processing
The herd and the hog flow
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Sows at year end | 30 | 44 | 52 | 56 | 60 |
| Feeder pigs bought in | 200 | 0 | 0 | 0 | 0 |
| Hogs sold | 200 | 340 | 430 | 500 | 550 |
| Weaner pigs sold | 0 | 40 | 60 | 80 | 100 |
| Breeding gilts sold | 0 | 8 | 14 | 15 | 16 |
A sow is expected to raise about 12.5 market-weight pigs a year. Gestation takes about 114 days and piglets wean at about eight weeks, so a gilt bought bred in January 2027 farrows in April and her litter finishes in December. That lag is why Year 1 depends on bought-in feeders. In Year 3 the herd has to supply 430 hogs, 60 weaners, 14 gilts for sale, about 8 for herd growth and about 14 to replace culled sows, which is 526 pigs from about 42 sows on average over the months those pigs were born. Most herd growth comes from keeping gilts from the farm's own litters, and the plan buys only a few added gilts a year.
Land, shelters and paddocks
100 acres of leased pasture and hay ground, 140 from Year 3. Two hoop shelters give winter housing and farrowing space, with farrowing huts in the paddocks in warmer months. Pigs rotate across fenced paddocks with water lines. The farm carries about 120 finishing hogs at a time in Year 1 and about 220 by Year 5, plus the sows and their litters.
Feed
A non-GMO ration from a local feed mill, with hay and pasture as supplements. Finishing feed, creep feed and hauling cost about $265 a hog; breeding-herd feed, vet care and bedding are budgeted per sow. Feed is the largest swing cost. A 20% rise in finishing and sow feed would cost about $27,000 in Year 3, more than that year's net income, and the farm would respond with a new price list; the downside case builds in an 8% rise.
Processing
A state-inspected plant about 45 minutes away cuts, wraps and cures retail and restaurant hogs. Shares go to a custom plant under the live-animal contract. Both are booked months ahead, and the farm keeps a second plant on file in case the first has a bad stretch.
Health and biosecurity
The breeding herd is closed except for tested gilts and boars. Feeder pigs come from one or two named Iowa breeders, arrive in a separate paddock and stay apart for 14 days. A visitor protocol and a large-animal veterinary practice on retainer complete the program. State rules on moving pigs are confirmed before each purchase. Livestock mortality is not insured, and the downside case shows the cushion.
Equipment and vehicles
A used tractor with loader, a feed wagon, a bulk feed bin, a stock trailer, a used refrigerated van with market freezers, and a walk-in cooler and freezer container for pickup days. Fuel and repairs run $13,000 in Year 1 and $23,000 by Year 5.
Licenses and insurance
- Food licenses and market permits, $3,000 at launch, then renewals.
- General, product and property liability, vehicle and farm coverage, budgeted at $11,000 in Year 1, plus key-person coverage on John.
- Written share contracts reviewed by counsel.
Who Runs the Farm
John Peterson, co-founder and herd manager
John grew up on a family hog farm in Marshall County and spent eleven years as a herdsman on a large farrowing operation, then six years raising a small herd of Berkshire-cross sows on rented ground while working full time. He holds a degree in animal science. Half of the founders' $150,000 is his six years of savings.
Maria Rodriguez, co-founder and sales manager
Maria spent nine years in food-service sales for a regional distributor, where she handled restaurant accounts and credit. She runs the farm's sales, books, markets and hiring.
Where the team is thin
Neither founder has run a payroll or a retail stall of their own. The plan covers this with a part-time bookkeeper on retainer, a fixed weekly sales schedule and a farm hand who joins in month 3.
If John is out
The farm hand is trained on the daily chores and the veterinary practice covers health calls. Key-person coverage on John is in the insurance budget.
Outside help
A large-animal veterinarian on retainer, a farm accountant, an agricultural lender whose loan officer reviews quarterly accounts, and a lawyer for contracts and leases.
Ownership and the lender
John and Maria hold 75% together and the two local family investors 25%. The investors are not on the payroll and receive their share of distributions, about $12,500 in total through Year 5. The operating agreement gives the founders an option to buy the investors out from Year 6 at a price set by an independent valuation. The lender takes a lien on the equipment and livestock and a personal guarantee from both founders.
The Numbers Behind the Herd
Every table below comes from one five-year model that runs month by month for 2027 and year by year afterward. The production and price figures come first, because each dollar of revenue traces back to a number of hogs and a price per hog.
Barns, fences and breeding stock
| Use of funds | Amount |
|---|---|
| Perimeter and paddock fencing, water lines, farrowing huts | $52,000 |
| Two hoop shelters for winter housing and farrowing | $62,000 |
| Used tractor with loader, feed wagon, bulk feed bin, stock trailer | $52,000 |
| Used refrigerated delivery van and market display freezers | $30,000 |
| Walk-in cooler and freezer container for pickup days | $18,000 |
| Breeding stock: 30 bred heritage gilts and 3 boars | $29,000 |
| First feed order | $7,000 |
| Food licenses, market permits and processor deposits | $3,000 |
| Legal: LLC, land lease, custom-exempt share contract | $6,500 |
| Launch: brand, website with online ordering, market tent, first-season samples | $13,000 |
| Cash reserve to carry the farm through the second-year loss | $287,500 |
| Total uses | $560,000 |
| Source of funds | Amount |
|---|---|
| John Peterson and Maria Rodriguez's savings | $150,000 |
| Two local family investors (25% of the LLC) | $170,000 |
| Farm term loan (FSA-guaranteed, local ag lender) | $240,000 |
| Total sources | $560,000 |
The two founders put in $150,000 of savings, two local family investors add $170,000 for 25% of the LLC, and a local agricultural lender provides a $240,000 term loan over ten years at 8.5%, interest-only for the first 12 months. The lender would likely look for a Farm Service Agency guarantee; the rate and terms are placeholders for this example and the agency sets its own rules. The raise is $560,000: $214,000 buys fencing, shelters and equipment, $58,500 covers breeding stock, the first feed order, licensing, legal work and the launch, and $287,500, 51% of the raise, stays in the bank. The reserve carries five months of costs with no sales, then the loan repayments that begin in January 2028, and it is sized to the downside case: the lowest year-end cash is $76,340 in the base case and $35,188 in the 20% shortfall.
Production and price figures
- The farm sells 200 hogs in Year 1, 340 in Year 2, 430 in Year 3, 500 in Year 4 and 550 in Year 5. In Year 1, 170 come from 200 bought-in feeder pigs at $150 each (about 75 pounds, arriving in January, April and July) and 30 are the first home-raised hogs, finishing from December. The 30 feeders left over finish in early 2028, and no feeders are bought after Year 1.
- A sow raises about 12.5 market-weight pigs a year: two litters of roughly 8 weaned pigs, less losses before finishing. Gestation takes about 114 days, piglets wean at about eight weeks, and a pig reaches about 270 pounds live weight in 8 to 9 months from birth, or about five months from a 75-pound feeder. It hangs at about 200 pounds. The herd is 30 sows at the end of 2027, then 44, 52, 56 and 60, mostly by keeping gilts from the farm's own litters.
- Shares are priced at $6.00 a pound hanging weight, $1,200 a hog, and the buyer pays the processing plant separately. Retail cuts average $12.50 a pound across bacon, chops, sausage, roasts and ground pork on about 150 pounds of take-home weight, $1,875 a hog. Restaurant and grocer accounts pay $5.50 a pound hanging weight, $1,100 a hog, and the farm pays the plant. Prices rise 3% a year from Year 2.
- Direct costs are 24% of share revenue, 44% of retail revenue, 48% of restaurant and grocer revenue and 32% of breeding-stock sales, which is about 39% of all revenue in every year. Finishing feed, creep feed and hauling come to about $265 a hog. Retail adds about $325 a hog for slaughter, cutting, wrapping and curing, restaurant accounts about $230, and both add packaging, boxes and card fees.
- Breeding stock sales are the surplus above what the finishing paddocks can hold: about 40 weaner pigs and 8 gilts in Year 2, rising to 100 weaners and 16 gilts in Year 5. In Year 3 the 52-sow herd has to supply 430 hogs, 60 weaners, 14 gilts for sale, 8 for herd growth and about 14 to replace culled sows, which is 526 pigs, or 12.5 for each of about 42 sows on average over the months those pigs were born.
- Payroll adds 27% to wages for payroll taxes, health coverage, workers' compensation and a retirement match (15% for the part-time driver), and 3% annual pay raises are charged as a separate line from Year 2. Wages are launch rates for John, Maria and the first hand; the second hand joins in month 22 and the driver in month 37.
- Land rent is $28,000 in Year 1 for 100 acres of pasture and hay ground plus a farmstead with a shop and a house lot, rising to $36,000 when the farm adds 40 acres in Year 3. Sow and boar feed, vet care and bedding run about $600 to $750 per sow a year, higher in Year 1 when the whole herd is first-litter gilts.
- Receivables average 9 days, because most sales are paid at pickup or by card and only restaurant and grocer accounts run on 30-day terms. Payables to the feed mill and the plant average 21 days. Inventory is the breeding herd, feed on hand and frozen stock, held at 20% of direct costs on top of the $36,000 opening herd and feed order.
- Monthly detail covers 2027 only. Sales begin in June, when the first feeder pigs finish, and build through the fall and the holiday months. Later years are spread evenly, which hides the thin early months of 2028, when the bought-in hogs have sold and the first home-raised litters are still growing.
- Tax is charged at the federal corporate rate of 21% and at 7.1%, the top of the Iowa corporate range in the Tax Foundation's 2026 table, which may change; the owners' accountant confirms the current rate. An LLC would normally pass profit through to its owners, so corporate rates are a cautious placeholder. The model carries the first two years' losses of $183,141, before start-up costs, against the $186,861 earned in Years 3 to 5, which leaves $1,348 of tax in Year 5. Federal rules limit how much of a year's profit an earlier loss can offset, so the real bill could be higher.
- Owner distributions of $20,000 and $30,000 are paid in Years 4 and 5. Depreciation is straight-line: fencing and shelters over 15 years, the tractor and equipment over 10, and the van, freezers and cooler container over 8, which is $18,800 a year.
Revenue by channel
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Whole and half hog shares (custom-exempt, pre-sold) | $84,000 | $123,600 | $140,039 | $163,909 | $182,332 |
| Farmers' markets, farm store and monthly pork boxes | $187,500 | $347,625 | $487,351 | $604,415 | $696,409 |
| Restaurant and grocer accounts | $33,000 | $67,980 | $87,524 | $96,160 | $105,235 |
| Breeding stock and weaner pigs | $0 | $12,000 | $20,000 | $24,000 | $28,000 |
| Total revenue | $304,500 | $551,205 | $734,914 | $888,484 | $1,011,976 |
| Growth on prior year | – | 81% | 33% | 21% | 14% |
Retail is the largest channel, 62% of Year 1 revenue and 69% of Year 5, and the one that needs the most labor: stalls, a farm store, boxes and deliveries. Shares fall from 28% of revenue to 18%. They are the cheapest to serve, since the buyer commits before the hog is slaughtered, but a customer base for half-hog freezer orders is finite, so growth goes to retail. Restaurant and grocer accounts earn the least per hog and stay at 10% to 12% of revenue. Breeding stock and weaners never exceed 3%. Growth slows from 81% in Year 2 to 14% in Year 5 as the herd sets the pace. December 2027 sales of $77,275 are well above the 2028 monthly average of $45,934: the holiday months and 170 bought-in hogs finish together, and the early months of 2028 are the thinnest of the plan.
The first twelve months
| Month | Whole and half hog shares (custom-exempt, pre-sold) | Farmers' markets, farm store and monthly pork boxes | Restaurant and grocer accounts | Breeding stock and weaner pigs | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | ($25,120) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | ($25,120) |
| Mar 2027 | $0 | $0 | $0 | $0 | $0 | ($25,120) |
| Apr 2027 | $0 | $0 | $0 | $0 | $0 | ($25,120) |
| May 2027 | $0 | $0 | $0 | $0 | $0 | ($25,120) |
| Jun 2027 | $4,800 | $11,250 | $0 | $0 | $16,050 | ($15,316) |
| Jul 2027 | $7,200 | $15,000 | $2,200 | $0 | $24,400 | ($10,216) |
| Aug 2027 | $7,200 | $16,875 | $3,300 | $0 | $27,375 | ($8,398) |
| Sep 2027 | $10,800 | $22,500 | $4,400 | $0 | $37,700 | ($2,091) |
| Oct 2027 | $14,400 | $33,750 | $6,600 | $0 | $54,750 | $8,323 |
| Nov 2027 | $18,000 | $41,250 | $7,700 | $0 | $66,950 | $15,776 |
| Dec 2027 | $21,600 | $46,875 | $8,800 | $0 | $77,275 | $22,082 |
Nothing sells until June, so the farm pays five months of wages, rent, feed and fuel from the reserve. EBITDA, which is profit before interest, depreciation and tax, is negative every month through September and positive from October, when sales reach $54,750. The lowest month-end cash balance of the year is Sep, at about $99,000, after allowing for the 9 days buyers take to pay. The model spreads costs evenly, so the January to May figures are an average, not a forecast of each month.
Who is on the payroll
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Co-founder and herd manager | $50,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Co-founder and sales manager | $42,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Farm hand | $36,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Second farm hand | $36,000 | Month 22 | – | 1 | 1 | 1 | 1 |
| Market and delivery driver (part time) | $19,000 | Month 37 | – | – | – | 0.5 | 0.5 |
| Total payroll incl. on-costs | $154,940 | $173,990 | $208,280 | $230,130 | $230,130 |
John and Maria are on payroll from month 1. The first farm hand starts in month 3, when the first paddocks are fenced and the second batch of feeders is due. A second farm hand joins in month 22, as the herd passes 44 sows, and a part-time market and delivery driver in month 37, when stalls and restaurant deliveries start to clash with chores. The farm has three people at the end of Year 1, four from Year 2 and 4.5 full-time equivalents from Year 4, with revenue per person of $184,000 in Year 3 and $225,000 in Year 5. That is light for a business that sells through three channels, and the plan accepts it because the founders cover the stalls and the books; the first hire the owners would add if sales run ahead is a full-time driver. The founders' salaries are in the costs, so the profit lines are what remains after John and Maria are paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $304,500 | $551,205 | $734,914 | $888,484 | $1,011,976 |
| Direct costs (finishing feed, processing fees, packaging, card fees) | ($118,500) | ($214,508) | ($286,001) | ($345,765) | ($393,823) |
| Gross profit | $186,000 | $336,697 | $448,913 | $542,719 | $618,153 |
| Payroll incl. on-costs | ($154,940) | ($173,990) | ($208,280) | ($230,130) | ($230,130) |
| Rent | ($28,000) | ($28,800) | ($36,000) | ($37,000) | ($38,000) |
| Utilities | ($9,000) | ($11,000) | ($13,000) | ($14,500) | ($15,500) |
| Marketing | ($12,000) | ($17,000) | ($20,000) | ($22,000) | ($23,000) |
| Insurance | ($11,000) | ($14,000) | ($17,000) | ($19,000) | ($20,500) |
| Professional fees | ($7,000) | ($6,000) | ($7,000) | ($7,500) | ($8,000) |
| Software subscriptions | ($2,500) | ($3,200) | ($3,800) | ($4,200) | ($4,500) |
| Sow and boar feed, vet care and bedding | ($22,000) | ($26,500) | ($33,600) | ($37,500) | ($40,700) |
| Feeder pigs bought in to fill the finishing paddocks | ($30,000) | $0 | $0 | $0 | $0 |
| Replacement and added breeding gilts | $0 | ($5,000) | ($4,000) | ($3,000) | ($3,000) |
| Fuel, truck and tractor repairs | ($13,000) | ($16,000) | ($18,000) | ($21,000) | ($23,000) |
| Pasture seed, hay, fencing and water-line repairs | ($6,000) | ($7,000) | ($9,000) | ($10,000) | ($10,500) |
| Market fees, delivery supplies and card terminals | ($2,500) | ($3,500) | ($4,500) | ($5,000) | ($5,500) |
| Phones, permits and license renewals | ($3,500) | ($4,000) | ($4,500) | ($4,800) | ($5,000) |
| Equipment replacement and small tools | $0 | ($4,000) | ($5,000) | ($8,000) | ($10,000) |
| Bad debt allowance (restaurant and grocer accounts) | $0 | ($1,500) | ($2,500) | ($3,000) | ($3,500) |
| Annual pay raises (3% a year) | $0 | ($5,220) | ($12,684) | ($21,339) | ($28,883) |
| EBITDA | ($115,440) | $9,987 | $50,049 | $94,750 | $148,440 |
| Depreciation | ($18,800) | ($18,800) | ($18,800) | ($18,800) | ($18,800) |
| Interest | ($20,400) | ($19,688) | ($18,048) | ($16,263) | ($14,320) |
| Income tax | $0 | $0 | $0 | $0 | ($1,348) |
| Net income before start-up costs | ($154,640) | ($28,501) | $13,201 | $59,688 | $113,972 |
| Start-up costs expensed at opening (legal, licenses, launch marketing) | ($22,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($177,140) | ($28,501) | $13,201 | $59,688 | $113,972 |
Year 1 loses $154,640 before start-up costs and $177,140 after them. Payroll is 51% of revenue, because the farm carries three people in a year with seven months of sales. Year 2 loses $28,501 after interest and depreciation, although EBITDA is positive at $9,987. Year 3 is the first profitable year: EBITDA is $50,049, or 6.8% of revenue, and net income is $13,201, a 1.8% margin. Net margin reaches 6.7% in Year 4 and 11.3% in Year 5, as sow and feed costs rise more slowly than the hogs sold. Year 3 is thin: a revenue miss of about 3% would erase the profit, which is why the downside case matters. Gross margin holds near 61% throughout. Interest is $20,400 in Year 1, when the loan is interest-only, and falls as principal is repaid.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($218,730) | ($29,463) | $17,286 | $66,187 | $122,880 |
| Fencing, shelters and equipment | ($214,000) | $0 | $0 | $0 | $0 |
| Funding received | $560,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($18,556) | ($20,197) | ($21,982) | ($23,925) |
| Owner distributions | $0 | $0 | $0 | ($20,000) | ($30,000) |
| Net change in cash | $127,270 | ($48,019) | ($2,911) | $24,205 | $68,955 |
| Closing cash | $127,270 | $79,251 | $76,340 | $100,545 | $169,500 |
Closing cash is $127,270 in Year 1, $79,251 in Year 2, $76,340 in Year 3, $100,545 in Year 4 and $169,500 in Year 5. Year 3 is the lowest year-end: the farm earns little, repays $20,197 of principal and carries a larger herd. Distributions begin in Year 4, once cash and earnings can cover them.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $127,270 | $79,251 | $76,340 | $100,545 | $169,500 |
| Accounts receivable | $7,508 | $13,591 | $18,121 | $21,908 | $24,953 |
| Breeding herd, feed and frozen stock | $59,700 | $78,902 | $93,200 | $105,153 | $114,765 |
| Fencing, shelters and equipment (net) | $195,200 | $176,400 | $157,600 | $138,800 | $120,000 |
| Total assets | $389,678 | $348,144 | $345,261 | $366,406 | $429,218 |
| Accounts payable | $6,818 | $12,342 | $16,455 | $19,893 | $22,658 |
| Farm term loan | $240,000 | $221,444 | $201,247 | $179,265 | $155,340 |
| Paid-in capital | $320,000 | $320,000 | $320,000 | $320,000 | $320,000 |
| Retained earnings | ($177,140) | ($205,641) | ($192,440) | ($152,753) | ($68,781) |
| Total liabilities and equity | $389,678 | $348,144 | $345,261 | $366,406 | $429,218 |
Margins and the monthly bar to clear
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -37.9% | 1.8% | 6.8% | 10.7% | 14.7% |
| Net margin (before start-up costs) | -50.8% | -5.2% | 1.8% | 6.7% | 11.3% |
| Payroll incl. pay raises as share of revenue | 51% | 33% | 30% | 28% | 26% |
| Revenue per full-time equivalent at year end | $101,500 | $137,801 | $183,729 | $197,441 | $224,884 |
| Average monthly revenue | $25,375 | $45,934 | $61,243 | $74,040 | $84,331 |
| Monthly revenue needed to cover operating costs | $41,124 | $44,571 | $54,415 | $61,114 | $64,080 |
| Debt service cover (EBITDA / interest + principal) | -5.7x | 0.3x | 1.3x | 2.5x | 3.9x |
Operating costs are covered when average monthly revenue exceeds the figure in the second-last row. Year 1 averages $25,375 a month against $41,124 needed. Year 2 averages $45,934 against $44,571, which covers operating costs but not interest, depreciation or loan principal. Year 3 averages $61,243 against $54,415. Debt service cover is negative in Year 1, 0.3x in Year 2, 1.3x in Year 3, 2.5x in Year 4 and 3.9x in Year 5.
A slow market: 20% fewer sales
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $243,600 | $440,964 | $587,931 | $710,787 | $809,581 |
| Net income before start-up costs | ($163,002) | ($55,655) | ($1,620) | $51,587 | $94,828 |
| Net income after start-up costs | ($185,502) | ($55,655) | ($1,620) | $51,587 | $94,828 |
| Closing cash | $122,713 | $50,624 | $35,188 | $73,212 | $154,567 |
This case cuts every revenue line by 20% in every year and raises feed costs by about 8% on top. The response: the second farm hand and the part-time driver are never hired, both founders take a 20% pay cut, marketing is cut by 20%, no breeding gilts are added and no equipment is replaced, sow feed and fuel shrink with the herd, Year 1 feeder purchases fall by 20% and no distributions are paid. On those terms the farm ends every year with cash in the bank, at no less than $35,188, and turns profitable in Year 4; Year 3 is a small loss of $1,620. Equity ends Year 1 at $134,498. Net income in Years 4 and 5 stays below the base case. The case spreads the shortfall evenly across channels and ignores timing within a year. A disease outbreak, or the loss of the processing plant, is a different event, and the plan carries no credit line for it.
Sources
- Iowa Department of Agriculture and Land Stewardship, Meat and Poultry Inspection Bureau, Slaughter, processing and labeling: custom-exempt slaughter is for household use and marked "not for sale"; pork sold to others must be inspected; state-inspected product may be sold only within Iowa.
- Tax Foundation, Iowa tax rates: graduated corporate income tax of 5.5% to 7.1%, 2026 table. A secondary source; the Iowa Department of Revenue sets the rate.
- Prices, yields, feed costs and wages are the plan's own figures, not market quotes.
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