Pricing Strategies for Selling Your Produce

Use these pricing strategies to get the most from your produce.


| October 8, 2013



Pricing Strategies

Part of your pricing strategy must include an emphasis on value, while still getting the best price possible.

Photo By Fotolia/Alexy Stiop

Market Farming Success (Chelsea Green Publishing, 2013) is the go-to guide to market gardening for those in the business of growing and selling food, flowers, herbs or plants. In this new and expanded edition, learn how to find land, which crops to grow, how to market your produce and more. Author and editor/publisher of Grownig for Market, Lynn Bycynski’s expert advice will help beginning farmers advance confidently through the learning curve of starting a farming business. In this excerpt from chapter seven, “From Field to Farm,” learn a few pricing strategies for selling your produce.

You can purchase this book from the MOTHER EARTH NEWS store: Market Farming Success.

How to Price Your Product

Setting prices is one of the most difficult jobs facing the direct-market farmer. There is no single resource that can tell you what to charge. Yet it’s essential that you know how much to ask for your products if you want to make a profit. In this section, I’ll tell you about some of the pricing strategies other growers use and refer you to other resources on the subject. First, I’ll address the question of pricing for retail, such as farmers markets and your own farm store; then I’ll tackle the more difficult question of pricing for restaurants, grocery stores, and other wholesale accounts. But first, a few words about your cost of production, which should be your first consideration in setting prices for any market.

Cost of Production

When you first start growing, you probably won’t have a very clear idea of your cost of production for any specific crop. New growers tend to just lump all the crops together, add up their income, subtract their expenses, and then decide whether they made a profit or not. Sometimes you get lucky and do make money, but this is a risky way to approach the central issue of your business.

Instead, you must learn to track your expenses and assign them to each crop as either a direct cost (for example, the seeds for that crop) or as a percentage of overhead (the liability insurance on your farm). This number should include the salary you want to pay yourself. The prices you set should use this as the base but also include a reasonable profit for the business.

If you are selling at farmers markets or your own farm store, you know that your prices must be in line with what other vendors are charging and what the supermarkets are charging. That does not mean you want your prices to be the lowest in town. In fact, you should probably be charging substantially more for your products if you are offering higher quality or some other perceived value. Always be careful that you are comparing apples to apples. A few years ago, for example, a grower in Oklahoma was upset when some customers complained that her prices were too high. She conducted a study in which she compared her certified-organic produce prices to prices charged at several supermarkets and a Wal-Mart store. In comparing 42 items, she found that, although unit prices were often lower at the supermarkets, her produce always weighed more per unit. As it turned out, her price per pound was often cheaper and always competitive with supermarket produce.





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