Wednesday, February 20, 2008

Making Your Small Farm Profitable :: Chapter 7 Book Report

Chapter 7 of Ron Macher's book, "Making Your Small Farm Profitable" is on what I believe is one of the most important aspects of small-scale farming. Marketing! I'm not saying that just anyone with experience and ability in marketing can become a great small scale farmer, because farming takes a vast amount of scientific, commonsense, mechanical, and intuitive knowledge. In fact, I have said it many times before so I will say it again, farming is an art! But, when it comes to being a profitable farmer (especially when you farm on a small scale and don't receive government subsidies) marketing is a very large piece of the puzzle.

With all of that in mind I read this chapter with quite a bit of interest and it didn't disappoint. I won't go as far as saying that the chapter contained a bunch of new knowledge that I hadn't heard of or thought about before, but Mr. Macher presented the information in a very readable and understandable way.

One of the things that really struck home with me were his, "Eight Steps to Identifying the Market". Nothing in those eight steps is very revolutionary, but sometimes it is good to look at a task with a process and goals in mind. I believe that is especially true when it comes to something that you are unfamiliar with or you are not quite certain that you can even do well. For most farmers marketing is one of those things. Many people decide to farm because they love the solitude, or the open spaces, or even the ability to be alone and their own boss. But, if you want to have a profitable small scale farm you need to get out there and market ... to people!

Here is a very brief overview of his eight steps:
  • Get maps of your area.

  • Find your self and draw circles with a radius of 25, 50, and 100 miles

  • Figure out how many people live within those circles and realize that most customers will come from inside the 50 mile circle. (This is basically two of the steps combined into one)

  • Research what other alternative or small-scale farms are in the area, and what they are selling.

  • Scope out the local grocery stores in some of the larger areas. What do they carry, can they purchase stuff local?

  • Now that you have gathered all of that information go over it with a fine tooth comb. What crops or livestock are missing? Is there anything that is being brought into the area because of high demand that you could produce?

  • Finally, "find out who your customers are". Are there ethnic groups, a population of people concerned about organic, or even people that are just looking for stuff the way it used to be (Sugar Creek Farm blog just mentioned that 2/17).

Following these steps won't help you market your farms meat or produce, but it will help you choose things that are in demand which makes marketing easier. Also, this isn't in the book, but don't forget to remember your passions. You will find marketing much easier if you are passionate about what you are trying to market!

The rest of the article is full of information and real-life stories about niche markets, value added stuff, pricing, advertising, and even where or how to sell your products. It's a pretty good chapter, and the deeper I get into this book I think it is a great practical guide to making the small farm pay. It won't give you the passion of a Joel Salatin or Gene Logsdon book. It may not give you all the nuts and bolts like a Carol Ekarius or Allan Nation book. But, it is full of down to earth steps, principles, and advice.


Steven said...

"But, if you want to have a profitable small scale farm you need to get out there and market ... to people!"

I may have said this before but....

There is a local guy here that raises shrimp. He does a great job at raising it, and also does trout, and even started a small sheep flock. But when he got a spot on the morning news and they did a whole cooking segment at the farm with him, they asked "what makes your shrimp better than the store bought shrimp?" He was at a loss for words. That is the crucial time that you HAVE to know what to say. I'm hoping that if we do a good job marketing someday we can sell some local shrimp from the neighbor. :-)

Ethan Book said...

I think one of the things is that there are many great farmers out there that just don't see themselves as great public speakers or conversationalists with other non-farmers in general. I do think that this is a stereotype that can be worked through, but it does demand that a person gets out of there comfort zone. Much like me becoming a beginning farmer is out of my comfort zone, but it is a passion and desire that I have so I press on!

Mellifera said...

Here's a couple crazy marketing ideas I have...

1. Farm-to-school program. Google it, and you will find an interesting thing the USDA is doing by trying to get food for school lunches from local farmers. (The USDA is in charge of the school lunch program, so they can do that kind of thing.) It's great because it also lends itself well to getting an educational partnership going between the school and farms: bam! Kids who know where food comes from!

There are a few precedents of schools actually getting most/all their food from local farmers and not breaking the bank. Usually when it got started, it was the brainchild of school parents and/or some chef in town (strange, but true). For all the ones I've heard of, the farmers were more or less passive beneficiaries. I figure, Coca-Cola's lobbying heavily to get their foot into the school's door, so there's no shame in pushing real food. Farmers actually getting behind the process could be amazing. A school lunch program would be a pretty good deal from a marketing point-of-view: a guaranteed steady buyer for a wide variety of foods. I might be afraid of being obligated to sacrifice quality for quantity with that kind of setup, but the schools that have tried it so far don't seem to always bear that out.

Another nice thing about securing a farm-to-school program is that once it's up and going, you have a group of farmers (one farmer would have a tough time supplying a school with any meaningful variety or quantity) producing a broad spectrum of foods. And while seasonality definitely still exists, they're probably also getting good at spreading out their production throughout the year.

....Now you and your farmer buddies can get together and open your own little farm grocery store in the cutesy part of town. Vertical integration is ok, as long as it's from the bottom up. : )

Ethan Book said...

Good thoughts mellifera. I have heard about those happening at the colleges here in Iowa. My only concern with getting into something like that is that they are going to want consistency between all the farmers involved. With our choice to raise heritage livestock and the Dexters conventional consistency could be tough to do. But, these are the out-of-the-box ideas that can make farming profitable and enjoyable!

Thanks for all the great input you have added lately ... keep it up!

Mellifera said...

Yeah, I've wondered about the consistency issue as well. I'm thinking what might work (at least for the store) is a "boutiquey" approach and tell people they're paying extra for the fact that no two things are the same. (People may or may not be excited about uniqueness 10-15 years from now... we'll have to keep our ear to the ground on that one.) I think a lot of folks could really go ape over having a store in town where they could go to get heritage-variety foods and the selection changes slightly each visit.

Here's a thought. I would really love to market top-notch products, but I would also not feel very good about healthy sustainable food being available only to the yuppie crowd. Probably because we're wretched poor grad students right now. So maybe we'll take an idea that Harry & David (the mail-order fruit guys) have been doing. They've got two different "levels" of produce: there are the spotless gorgeous gleaming apples to send as a fruit basket to people you want to impress, and they've also got just as tasty apples that look a little funny (spots, weird shape, etc) that you buy for yourself. : ) I think this would be a smart move, because if you're selling strictly high-end, then you just have to throw all the funny-looking produce away. I remember my gramma going to some store to pick up misshapen kiwis that were delicious. I think this is a good strategy because it allows you to reach a bigger market than selling fancy food only. (More income, and more stick-it-to-agribusiness potential.)

This philosophy might be a little more interesting to apply to the meats and dairy section. It'd be fairly easy to set your quality baseline at "hormone-free, local, no subtherapeutic antibiotics" and let everything else be up to individual farmers, including price (all info marked clearly on their packages, and/or on info sheets close by the meat case, etc). For example, if Bob's got generic Hereford cross beef that meets the basic criteria he'd sell it at X per pound. Jim, on the other hand, has certified organic Highland beef that spent 10 days hanging, which he can sell for much more per pound. And if one of Jim's Highlanders got sick and needed antibiotics, thus making it no longer certified organic but still totally awesome meat, he could still mark that steer's meat as such and sell it for a reduced price to reflect loss of organic status.

I also like the idea of letting farmers set their own prices at a co-op store, because I really don't want to deal with trying to figure out what everything's worth (and having to tell the farmers that). They're smart people, they can work it out themselves. : )

Ethan Book said...

Good thoughts mellifera. I too have thought about pricing people like me out of the market and I think it is something that you need to take into consideration. I think with somethings I can make a good profit and compete with the grocery stores ... maybe on things like pork and beef. On other things, especially things that are done like the poultry industry, I will probably have to price a little higher. I do not want to cater to the "high-end" market on all things, but I will hopefully on a few things.

Anonymous said...

I helped my two teenage daughters raise a garden this year to help them understand productive endeavors, be self sustaining, learn basic business practices,and marketing skills. Today the 10year old was interviewed by NPR and she was very impressive with what she had learned from her exosure to To the market

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