May Notes On Farm Marketing Profits

Notes On Farm Marketing Profits

As I recall… Joel Salatin… the famous Virginia farmer… says he makes something like $2,000 per year per acre… while many other farmers make as little as $200 per acre per year.

Salatin’s farm is about 400 acres big. So… if my numbers are right he does almost a million a year in sales. ($800,000 a year.)

Sweet.

What is the big difference between his farm and other farmers? Just this…

Salatin is a good marketer.

Most large farmers sell into the WHOLESALE market. So they can only get pennies per pound of crop. Salatin has worked hard to develop a RETAIL market (locals) for his products. So instead of getting pennies… he gets dollars.

That is the key to greater profits. Not just growing food… but creating a database of buyers for your crops… at a retail level.

You can sell your crops to wholesalers if you want… but Walmart and Costo cannot pay you top dollar for your crop.

To get this type of juice going… here are some ideas.

1. If you sell at the farmers market… capture the name and address/phone (email?) and keep in touch with them about your crop… and what is happening and what is coming up.
2. Let them know when you’re going to be at the next farmers market.
3. Offer to deliver the produce on a weekly basis.
4. Ask them what produce they want to buy.
5. Set up a road side stand, or sell out of the back of your pick-up truck. Even if you sell your produce at a cheaper price than the big supermarkets, you’re still likely to make more profits than if you sold to the supermarkets. Why? Because the supermarkets have to factor in transportation, rent, electricity, employees pay and benefits, spoilage, marketing, and more.
6. If you sell direct, you’re profits go into your pockets instead of covering that big headache the supermarkets have to put up with.
7. If you sell WHOLESALE… maybe that works for you. But you’re at the mercy of one buyer. And you’re at the mercy of the prices they set.
I remember my grandfather talking about taking a crop to market (wholesale) on the day the crash happened in the “great depression” of the 1930’s. The buyer would not given him the price he wanted, so he got mad and packed up and drove his produce back home to wait a week or so… thinking they would offer a better price next week. But to his surprise the price fell even lower when he returned to market later. He had to sell out of desperation. He regrets that he did not sell when he was first there.

When there is only one buyer… you’re at their mercy.

How much better to have many buyers… you’re likely to get a better price when you have many buyers competing for goods.

PRICE DISCOVERY is a big concept in a free market economy. If you are not allowed to have “price discovery”… you’re gonna get royally screwed more often than not.

And the best way to have PRICE DISCOVERY is to have many sellers, and many buyers doing their thing…

Let’s say a farmer is selling a dozen eggs. And a customer comes along and buys the eggs for $2 a dozen. Is that the true price? What most folks don’t realize is that the buyer was willing to pay $3 a dozen… and the farmer was willing to take $1.50 per dozen… and so both the buyer and seller were happy to exchange the $2 for the dozen eggs.

It’s something that happens in every exchange. Price discovery. Unless prices are set by law. Or set by ONE BUYER and many sellers.

Yes, you can grow your veggies… and meat products… but if you want more money for the same efforts, take the time and effort to create your own market for the products you grow.

Here is a Joel Salatin Talk. You’ll learn from Mr. Salatin that farming is philosophy as well as getting your hands dirty with creativity.