[Market-farming] cost of sales

Willie McKemie mf at austinfarm.org
Thu Feb 3 08:17:00 EST 2005


On Thu, Feb 03, 2005 at 07:37:12AM -0500, Robert Farr - The Chile Man wrote:
> As a value-added producer, I'm going to have to weigh in here.
> 
> No comment on the cost argument, but transforming my produce into salsas 
> and sauces makes me about 20x more than simply selling produce!
> 
> We have a 40-gallon kettle, fitted with valves and spouts for easy 
> hand-fill, and can fill up to 75 bottles/hour, including prep, cooking, 
> and clean-up time.

Perhaps you will comment further on processing costs?

This past season, I had some blackberry jelly made by a custom 
processor.  Extra ingredients, material, and processing cost was $2.50 
per pint, value of berries was about $2 per pint.  With an $.08 label 
and some transportation and storage costs, I figure my cost is about 
$5/pint.  For $6 retail, I have $1.20 sales commission cost.  So, a 
retail of $6 is break-even or worse.  The sole attractive point is 
moving berries that otherwise would have been lost.  $6 seems like a 
pretty high price; I wonder if pints of jelly can be sold at $8 or $10?
$2.50 doesn't seem like too much for processing considering the 
headaches and costs of maintaining a legal kitchen.

-- 
Willie, ONWARD!  Through the fog!
http://counter.li.org Linux registered user #228836 since 1995
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