New Higher Prices!

Consider this the corollary to my recent article on independent farming, operating outside the vast commodity and investment driven markets.  In order to be better farmers and to better serve you, we’ve decided to raise our prices.  Permit me to do some farmsplaining.

I’ve just finished all the paperwork for the 2017 taxes, and this year we continued our unbroken losing streak by spending a lot more money than we made.  Since we started the farm in 2011, we’ve spent $389,000 more than we’ve received.  I include both capital and expense spending in this figure.  This does not include the purchase price for the farm itself.  All of this deficit has been funded through a number of loans and by working a second full time job.

To keep the farm going, we live a spare lifestyle to divert every spare dollar to the farm.  We try to grow as much of our food as we can.  We do all our own repairs (and we leave a lot of things unrepaired).  We sleep in unheated bedrooms.  We use an icy outhouse rather than fixing the septic system.  Just about everything we have is secondhand.  We don’t have college funds for the kids and we don’t put extra money into the 401k.  I have taken three vacation days off from the farm since 2011. We work long hours in all weather, in sickness and in health.  None of this is mentioned as groveling for pity.  Rachel and I knew what we were in for, and we are OK with the rigors that accompany our lifestyle.  Many other farmers live the same way, and billions of people around the world deal with circumstances far more difficult.  I only share this so our customers can understand our situation, because I believe the plain fact is that we sacrifice more to produce this food than most of our customers do to purchase it.  I don’t say that with any bitterness, but I’m pretty sure that’s the way it is.  (I’ve rewritten these sentences many times to try to avoid being exaggerated or abject or belittling, and I can add all kinds of qualifying statements here, but I’ll let these remarks stand as they are.)

Spending RevenueTrends

Sales are growing and spending is starting to flatten as some of our infrastructure investments pay off, but there is still a lot of room for improvement.

The good news for 2017 is that we were able to bring the ratio of total spending to revenue closer in line and we were able to dramatically increase our sales, but the bad news is that we’re probably two years from breaking even and about six years from the point where we’ll be making a minimum wage salary from the farm.

If we are going to farm, we can’t keep subsidizing our customers.  That isn’t sustainable agriculture.  If we raised our prices on all products by $2 per pound we’d break even and be on track to earn a bare bones living from the farm within a year or two, but of course that would place our prices outside the realm of what most customers would consider reasonable.  I think the better approach will be to target a few items with moderate increases, and then to keep working on growing our scale and capacity and using that efficiency to continue lowering our production costs.

Eggs are going to go up.  Even though they are already expensive relative to commodity organic eggs, we’ve always priced them as a loss-leader.  That needs to change.   I’m not aware of any mainstream product marketed in our region that comes close to their attributes:  truly pasture raised, certified Organic feed, and soy free.

I haven’t figured out all the price adjustments, but if you watch our website you’ll see a few things change during the next week or two.

For some people the increases may be hard to absorb, but I feel that if we are going to be honest about the food we produce, that same integrity needs to be reflected in the prices.  And if we want this farm to last to support another generation, we need to be able to give them reason to hope that they can make a living on it, that it isn’t just a sword of noble principals on which they can impale themselves.  A truly sustainable farm must outlast its founders and sustain those who follow.

7 Comments on “New Higher Prices!

  1. I’m not a customer but a regular reader of Wrong Direction Farm and get inspiration from Dave and Rachel through this blog. So I’d just like to pass on that the value of what you guys are doing gets all the way to here on Bohol island. Thank you.

  2. Independent farming has to be one of the toughest businesses there is. We so admire your dedication and integrity. As for the higher prices, we can afford it,and will pay it. If the prices were difficult for us, we might eat a little less meat and more legumes but would stay with you, because your products are the gold standard.

  3. Dave and Rachel,
    Being a farmer is not easy. Being a farmer who chooses to do things that are ethically sound in the current farming environment is beyond difficult. I admire your efforts, your honesty, and above all, your integrity.
    We support you and your family and the incredibly hard work that you do. We also support your value system, way of thinking and your incredible gifts to us, the consumer of your organically and sensibly raised chickens, pigs, and cattle. Thank you.

  4. Dave and Rachel,
    While we are not customers, merely followers of what you are doing, since we live in Kentucky and are supporting our young and growing local farmers, we admire all you are doing to do what is right in producing food that is good for people and good for the land in the way it is raised. I will pray that your customers will support you by being willing to understand and make the necessary sacrifices to be able to purchase quality foods raised in a sustainable way. Thanks for all you are doing! We wish you and your farm well!
    Lois and Jeff Stickler

  5. My family and I are with you !

    We are lucky and can afford your price increases. I still need to find a way to get eggs from you !

    Hang in there, I’m sure that all of your customers feel the same way we do!
    To those who doubt the affordability of these increases, consider brewing your coffee at home rather than buying Starbucks !
    ( Long Island specific)
    It seems to me worth the trade!

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