First, talk to your accountant. If you don't have one, ask around and find one that you can pay a small consultation fee to for advice. You need specifics not only for your state, but maybe for your city if you live within city boundaries. Your accountant may recommend sole propriatorship, LLC, or maybe even just using a Form-F.
Keep all the expenses and income for this activity separate from your household stuff. Any muddling will nullify your ability to provide proof that you're trying to build a business.
As for farmer's markets, be sure to check into that very carefully. I know our markets here charge a high fee for booth space, making it too costly for the small beekeeper. Also, some markets even have expanded requirements for the facilities you should be using to make your products, regardless of local farm produce regulations. This, too, may add to your costs. Word of mouth is great...and free!