Evaluating Farming Income Sources

As I’m nearing the end of my practicum program, and creating my own farm plan, I have been evaluating the different direct marketing streams that are the main sales points for small scale organic growers. I go through them here to compare and contrast the benefits and challenges.

Community Supported Agriculture (CSA)

In a CSA model, customers typically pay at the beginning of the season for a share of the produce. Generally, they expect a certain number of weeks of produce, and the idea is that they share in the ups and downs of farming. This provides farmers with cash flow at the beginning of the season, when it is greatly needed, and an assured market. Since the customers don’t typically choose what is in their box, they are exposed to a variety of fruits and vegetables that they may or may not be familiar with. CSAs often result in longer term, established relationships between customers and farmers, and often include some aspects of engagement, like on-farm pick-ups or other activities to connect the customer with the farm.

Some of the challenges associated with CSAs can be the administration and logistics – preparing the boxes for pick up/delivery each week, arranging with customers who are not able to pick up at the allotted time, and collecting the bins back from customers each week. There is also some stress associated with having to meet the CSA requirement each week, no matter what’s going on at the farm. Generally, though, CSA is a good option for new farmers, because customers can be recruited from friends and family, and are often made up of supportive people who will cut you a bit of slack during your first couple of years. Longer term, though, it may not supply enough income to be worthwhile.

Farmers Markets

UBC Farm Market

UBC Farm Market

When people think local and organic food, they often think of farmers markets. The markets offer a great opportunity to interact with customers, and allow a farmer to sell whatever they have without having to meet specific quotas. They also allow farmers to charge top dollar for their produce, and can be quite lucrative. Plus, they’re fun!

The downside of markets is that they can take up a lot of time and travel. If the market isn’t right on your doorstep, then fuel costs have to be taken into account, and the time that the farmer spends at the market instead of at the farm is valuable. And if the farmer isn’t a people-person, it would not be as fun, and dealing with the same question 100 times an hour can get frustrating (See what questions not to ask!). And poor weather or a holiday weekend can seriously cut down your profit, making it less worthwhile to have driven all the way out there and spent the day at the market. There is also a lot more competition, and for a new farmer, it can be difficult to become established and well-known, as customers often have their loyalty to a specific farmer (which is why it can also be great once you have it!).

Restaurants

Restaurants can be an excellent source of income for local farmers, especially those restaurants that are focused on local, sustainable food. They often take produce that would be considered specialty items, will pay a good price for them, will buy produce that may have cosmetic deficiencies, and will order in large quantities, which reduces the labour involved in bunching or bagging small amounts. Chefs understand the value of high quality produce, and know what to do to make it taste great. Also, once a relationship is established, it can be a regular, weekly, assured sale.

A challenge associated with selling to restaurants is that there is high turnover among head chefs, and if a chef leaves, your relationship with that restaurant may disappear suddenly. Restaurants also expect that you will have somewhat more regular, predictable amounts and quality, which can be challenging in the first couple of years of farming. Also, it can take a lot of upfront work to establish relationships with restaurants.

Farm Stands

Three Sisters Farm Stand

Three Sisters Farm Stand

In many rural areas, especially along major roads, you often see farm stands at the driveways of small farms. These stands are stocked with what’s available from the farm (eggs, produce, flowers), and often use an honour system of payment, with a locked pay-box and a list of prices.

This kind of farm stand is great for saving labour, because no one needs to be standing there (although you should be close-by), and customers who know it is there can come when it suits them, instead of waiting for a designated time. It often capitalizes most on a local, committed customer base, who know that you are there and will come to you for their shopping.

The challenges are obvious, though. Theft and dishonest payment, not being able to keep produce looking its best, potentially losing sales if you are not there to restock when something runs out. It also doesn’t work if you are not easily accessible by road, or are too far away from town centres.

Wholesale

Selling wholesale to grocery stores, chains or distributors is one way for a farmer to sell a large amount of product, all at once. It also means that the produce is going to the place where the majority of people still buy their produce, which is the supermarkets and grocery stores.

By selling wholesale, farmers sell more product, but receive a lower price per item. There are also a lot of costs (and waste) associated with packaging and shipping, with standardized expectations for each product that must be taken into account. Distributors and wholesale buyers also want to have a regular and predictable supply, and be able to buy large volumes from one source, instead of many shipments from smaller sources.

In reality, most small-scale farmers don’t sell wholesale, because of the difficulty in administration, not enough production, and the lower prices. But there are certainly larger scale farms that make this a successful marketing avenue.

Other Avenues

Other farms are successful at using variations of these marketing avenues, such as co-ops, group buying clubs, made-to-order CSA shares, full-diet CSAs, online buying, and many other ways to sell directly to the customer. Marketing is only limited by imagination!

Conclusions

For me, and the farm I envision, I imagine that my marketing will be a combination of CSA, farmers markets, and restaurant sales. If my farm ends up in a location that is favourable, I would love to have a farm stand one day. What’s important to me is that I am able to make my farm financially sustainable and successful, that I can connect directly with my customers (and they with me and my farm), and that in the end, my farm produce goes to feed people in a healthy, environmentally friendly way.

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