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.)
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.