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This week's Book of the Week feature is Rebirth of the Small Family Farm, by Bob and Bonnie Gregson.
From Chapter 7: Marketing Strategy
A small farm must primarily sell directly to the consumer.
To make a living on a small farm, we must cut out the middlemen who today make virtually all the profit between farm harvest and ultimate sale to the consumer. Subscription farming and good use of a farmstand allow the farmer to sell produce for substantially more than the normal wholesale price.
Example: If we grew summer squash on a large scale, early in the season it would sell in bulk for about 35 cents per pound to a local wholesale warehouse. Or we could sell lesser quantities at about 55 cents per pound direct to a few organic-friendly local grocery stores who would price it to the consumer at about $1.00 per pound. Or we could sell even smaller quantities directly to consumers at our farmstand for about 75 cents per pound. The latter is clearly “price optimal” for us and the consumer, cutting the consumer’s produce cost by 25% while raising the farmer’s gross by 36 to 114%. Those are big numbers in aggregate.
Advantages of Direct Sales
The farmer makes more money, while the consumer spends less money. That was clear in the example.
But there are other factors not so readily obvious: food travels the 100 feet from the field to our farmstand in several minutes, with much less handling than during its four or more days from a faraway farm to a wholesaler to a grocer and then to the consumer. That means our model provides much fresher (translated as more nutritious) food with less wear and tear on the interstate highway system, less fuels burned to transport, handle and preserve the produce, less cultural stress on our social system since two-person farms are not dependent on migrant workers, encourages use of more interesting varieties (not just bred for easy transportability) within plant families to protect genetic diversity, reduces the need for energy-intensive food storage facilities with attendant chemical preservatives, and keeps more dollars in the immediate local economy.
Those add up to a huge plus for the taxpayer/consumer.
There are really two main drawbacks to direct sales: first, it takes time and effort to establish/maintain sales facilities; and, second, the quantities that can be sold by the farmer are much less than from wholesale opportunities.
Time and effort are the principal inputs on a small farm, so we have to be careful that we don’t overextend our human hours. The farmstand at our Island Meadow Farm is self-service and only one hundred feet from our house, yet it still requires 20-30 minutes per day for restocking, sign-making, checking status of change on hand, and so on. Our little stand also cost about $500, and the 800-foot driveway plus parking area requires about $200 worth of new gravel each year, but these are well worth the expense.
Quantity of Product Available for Direct Sale is a Real Issue
For example, it is not reasonable to even consider selling truckloads of wheat from a farmstand. Nor will one normally sell thousands of pounds of any one thing. So the small farmer realizes that along with the higher selling prices possible through direct sales comes a smaller sales volume potential. The clever farmer plans accordingly, ideally growing enough of each crop to just saturate the highest price market available (the farmstand customer group), with maybe a little left over to sell to the next-highest price buyer (usually a local grocery store or restaurant.)
A small farm should be within a reasonable distance of potential customers. Towns offer wide varieties of food consumers in a rather dense cluster. Since everyone’s time is at a premium, logic dictates farming within a short distance of a city or town where one can quickly deliver to the consumers or they can easily come to pick up produce and see the farm.
If one out of every 20 families would participate in your farm program, it only requires a population base of 2,000 families to make that program successful. About 100 cars come down our driveway to the produce stand each week, probably representing 100 families.
Your customers will come to consider you “their farmer.” Most will love the opportunity to see — and have their children see — where their food comes from.
About the Authors:
Bonnie Gregson grew up in Seattle, attended Colorado Woman’s College on an academic scholarship, but left to get married. She then spent time in construction management and a 12-year career in medical clinical management.
Bob Gregson was raised in Pasco, WA, in wheat country, graduated from West Point in 1964 and served in the Army for 6 years. He left the military and obtained an MBA at Dartmouth College. Bob is past chair of the King County Agriculture Commission, serves on the advisory council to the dean of the College of Agriculture at Washington State University, and is a board member of the Washington Sustainable Food and Farming Network.
- Made From Scratch, by Louise Placek
- A Farmer's Guide to the Bottom Line, by Charles Walters
- My Farmer, My Customer, by Marty Travis