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Farmers Deserve a Fair and Reasonable Price
By Jane Eckert
Are you selling your crops at a profit? Why not?
I just got off the phone with an orange grower in California and heard the same story that I often hear from apple growers in the Midwest. This farmer told me that it costs him $10.00 a box to grow and pack his citrus, and the current market price is $6.00 a box.
Of course I had to ask him, how can you do this? Why do you continue to grow crops and lose money? His reply was simple, probably like yours…”I’ve been a farmer for thirty years. This is all I know and what I love to do.” Folks, does that make sense?
As a farm girl in the Midwest, I would often hear my dad, uncles and brother speak rather enviously about the farmers in California. After all, they are in the breadbasket of this country. California enjoys good soils, warm climates, moisture control for their crops and many farms can even have multiple crops in the same year. Wow, sounds like they should be successful.
I have now come to realize after several speaking engagements in California-and particularly after speaking to this citrus grower yesterday-that the farms in California have the very same issues we have in the Midwest and on the east coast. Farms are not making a profit on the crops they grow!
If we can’t grow our crops at a profit, then what? That was basically the marketing question that this grower wanted me to solve for him in a thirty-minute phone call.
Well, it’s rather obvious that I can’t solve the commodity pricing and distribution system of agriculture that is so firmly entrenched in the food chain of this country. However, what I do believe is that if we can’t start charging a fair price for the crops that we grow-and make a profit-then it’s very unlikely that our farms will be passed to the next generation or that this country will even stay in food production.
The only I way I know of to get control of your own price is to be able to choose what you will sell, who you will sell it to, when you will sell it, and for how much. Direct farm marketing may not be the choice for everyone, but it does give us the opportunity to have greater control of our destiny. Whether you have a country market, roadside stand, or a CSA, or you sell to restaurants, schools or at a farmer’s market, you have obviously made the choice to try to control your destiny and set your own price.
Yet I still hear farmers tell me that they try to price their products fairly, but the farmer down the road still sells his sweet corn for a $1.00 a dozen. Those guys have got to realize that their pricing affects everyone else, and they are just helping close down America’s farms.
We can’t afford to price our products as a “loss leader.” That’s a marketing gimmic used by the big guys–Walmart, Lowes, and big supermarket chains-to draw customers to their business. They set a hot price on a single item, knowing that once we’re there we will purchase many more items at full price. But we have to realize that the big guys have literally tens of thousands of items for purchase, so they can afford to sell a single item at a super price or even a loss. They can afford a $1.00 for a dozen ears of corn, because they’ll collect another $150 in other grocery and store items. We won’t.
As direct farm marketers, we need to keep in mind that our pricing strategy should not be based on such “loss leaders” or on commodity pricing, and we certainly should not be trying to undercut our neighbors. Our pricing should be based on making a profit and covering all of our known crop expenses plus packing, display, sales and yes, paying our wages, health insurance and other expenses.
Our pricing strategy should be based on superior quality, fresh looking displays, a unique shopping environment, friendly staff and the additional activities that we offer. Today, we truly have an advantage over our supermarket competitors because we are the growers. Our customers can come and see our fields, they can watch us harvest the crops and they can meet the farmer and ask us questions about their food.
In the recent study just completed by the North American Farmers’ Direct Marketing Association, one of the trends they have documented is that people today are more aware and concerned about who grows, processes and retails their food. We’ve all seen the upsurge in the organic movement. Many people are willing to pay more for food they know to be healthy; they are becoming more interested in sustaining home-grown agriculture.
If you are selling at a loss, it’s time to change. It has to start with us, and how we see ourselves. It’s time we all recognize and value what we do and what we provide our customers. Just because we love farming and our families have always farmed, certainly does not mean that we have less value than the guy who pulls an 8 to 5 and then goes out to dinner! We should expect no less of a return than any other business. We work hard, we work long hours and we need to respect ourselves and our livelihood. If it costs you
$10 to grow and pack a box of fruit, why shouldn’t you expect $12 as a fair and reasonable price?Jane Eckert is the founder of Eckert AgriMarketing (www.eckertagrimarketing.com), a full-service marketing and public relations firm that helps farmers to sell directly to consumers, diversify operations and become tourist destinations. She is also CEO of www.RuralBounty.com, a search directory for agritourism farms and ranches in North America. Jane can be reached at 314-862-6288 or you may email her directly.