What should I check before buying a custom farming business?

A custom farming business earns its income by working on other people’s land. It may seed one farm, spray another and harvest a third. That makes it different from buying a working farm with land and crops, where the value sits in the ground and the harvest. Here it sits in relationships, machines and people, so your checks follow those three things.

Customers and booked work

Ask for a customer list by job and by season: which farms, which crops, which services, and for how many years. Repeat customers who book before the season starts are a steadier base than one-off calls. Look at how much of the work comes from a few farms, and ask whether any of them has said what they plan to do next year. Then speak to a few of them yourself, with the owner’s permission.

Rates and invoicing

Ask how each job is priced: by the acre, by the hour, or by the load, and who pays for fuel and travel between fields. Compare the invoices with the bank deposits so you can see how fast customers pay and whether any rates were discounted for friends. Your accountant can read the financial statements with you and say whether the margins hold up once repairs and labour are counted properly.

Equipment and crew

List every machine with its hours, service records and whether it is owned, leased or financed. A hired equipment appraiser can give you an independent view of condition. Then ask about the people. Skilled operators are hard to replace in a short season, so find out who runs each machine, how they are hired each year, and whether they would work for you. Financing an agricultural business is worth reading before you talk to a lender.

What to confirm before you commit

• Written customer lists, equipment lists and maintenance logs from the seller.
• Whether customer relationships belong to the owner personally or to the business.
• Which contracts, leases and insurance policies can be assigned to you.
• How the owner will introduce you to customers and operators during a handover.