Skip to Content.
Sympa Menu

market-farming - [Market-farming] Wild business scenarios

market-farming AT lists.ibiblio.org

Subject: Market Farming

List archive

Chronological Thread  
  • From: "Steven Rogers" <singingpigfarm AT earthlink.net>
  • To: "Market-farming" <Market-farming AT lists.ibiblio.org>
  • Cc:
  • Subject: [Market-farming] Wild business scenarios
  • Date: Wed, 9 Feb 2005 19:34:48 -0800

The scenario of several days ago of a farmer selling $500 at a farmer's market with costs of $400
and Pat's scenario of selling tomatoes at break evenprice at a farm stand are pretty wild and
are in no way representative of reality. After  15 profitable years as a market farmer I know what it
costs to produce vegetables. Anyone who (the first example) is selling vegetables DIRECT at a
20% gross profit margin is doing some thing very wrong. As for the second scenario of selling at a
break even price, I can't imagine a case where that would ever occur with any vegetable. It doesn't
cost that much to grow them. My production costs for heirloom tomatoes runs $.075/pound. 
 Even if you sell them for $.15/pound you are still running a 50% gross profit margin. I sell on average
20,000 pounds/year at $1.50/pound. At the farmer's markets they sell from $2.50-3.00/pound.
I can't remember the last time I saw a tomato in a chain grocery for less than $.59/pound that is
still an 87% gross profit margin. Let me give you a reality based example from my own business.
I am rounding the numbers off for ease of understanding. Today my driver and I delivered $1150
of vegetables. My total costs for everything including seeding,cultivation,fertilizer, irrigation, harvest
packaging, and delivery including all hired labor, fuel, machinery costs was $350--Gross profit margin
for today=70%! I do not sell at high prices. My price point is just above the produce houses
bringing produce in form Cali/Az/Mexico. No where near the above retail prices prevalent at farmer's
markets. Great volume however.
FYI a 20% gross profit margin is common for produce houses. A close friend and trusted advisor
owns a medium sized produce house selling mostly ro restaurants. He own 15 delivery trucks,
a semi tractor/trailer rig, and employs about 30 people. He runs a 20% gross profit margin plus
$2/case for shipping and warehousing expense. He is very successful and well off even though
he has 5 kids.  He is doing so well that he expects that he will never have to touch his IRA money
and that it will all go to his kids. He gets a little teary eyed when he sees my margins.
Loss leaders are for Walmart not for farmers selling direct. If I encounter a chef who throws out
a  low price he says he can get an item for somewhere else, I tell him "That;s a really good price,
you should buy it." I am not going to buy someone's business, there is too much business out there
to have to do that..
 
 
Steven Rogers
singingpigfarm AT earthlink.net
EarthLink Revolves Around You.
 




Archive powered by MHonArc 2.6.24.

Top of Page