Tracking small farm marketing costs
Small farmers and specialty crop growers often receive a higher price for their products compared to commodity crops. Direct marketing and niche markets can lead to higher returns per unit but quite often some costs aren’t tracked such as packaging and labeling, delivery and mileage, and labor. Once those are factored in, maybe selling wholesale to a grocery store instead of the farmer’s market makes more sense for your bottom line.
Emily Coll with Iowa State University Extension says along with the USDA, they’ve developed a Market-Based Enterprise Budgets Toolkit to help farmers decide which sales market outlet will give the best bang-for-the-buck.
"How much of that market cost goes to, let’s say, asparagus, which we know is a spring crop, so you are only selling it for maybe five weeks," says Coll. "And in that five weeks, if you’re taking it to the farmer’s market, how do you allocate the right amount of costs for those marketing costs to the asparagus? Our portion of this was to help farmers understand that percentage."
She admits going through the spreadsheets is a lot of work, but it isn’t something that has to be done every year.
"Track your labor per production piece. So, how long did it take you to weed that particular patch, how long did it take you to fertilize? Once you get those numbers down, then that’s sort of done. And, typically marketing costs don’t change too much over a year per-outlet," she says. "So really, it’s just something that we’re trying to get farmers to do one time to really get it down, and then if they want to continue through the years, they can compare those year-to-year differences in markets."