[Market-farming] Economies of scale

Adriana gutierrez-lagatta at charter.net
Thu Jan 30 04:45:20 EST 2003


In greenhouse vegetable growing there is a definited jump in costs as
you go up the scale.  The first approximately $40,000 can be handled
by a single person working full-time, packing produce on a table in
the greenhouse and delivering in the family van, storing produce in
small coolers.  The next step up in volume  requires at least a
part-time worker, decent packing and processing facilites, a delivery
vehicle and  a second greenhouse.   It's a step-function, not a curve,
and that first step is a killer.  I'm standing at the bottom of that
step right now- you have to be real comfortable with your ability to
increase your market way above and beyond those increased costs for it
to be worth the financial risk.  And then you have to be prepared to
see some decrease in your own produtivity as you have to spend time
managing those extra people.
> This is certainly true here at Misty Ridge Farm. As we increase
sales, our
> costs do not necessarily increase at the same rate. And it has been
very
> true of the sales and business operations that I have had in the
past in
> other fields of endeavor.


Adriana




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