I mentioned in the previous episode that we had to sit down and take a hard look at product prices a few weeks ago. This was something that I knew we needed to do, but I did not want any thing to do with it for a variety of reasons. First of all, I love doing many things on the farm (even some things that aren't especially fun), but I do not love doing the "business" aspects sometimes. And secondly, I am always worried that people will think my prices are to high and that we will lose all of our customers. The reality is though that the farm is a business and if we are going to run it like a business we need to be continually keeping tabs on our pricing, our inputs, our marketing, and all of that business'y stuff.
With all of that in mind, on today's episode of The Beginning Farmer Show I am going to spend some time talking about how we eventually came around to setting our prices (and recently raising them). There was a lot of thought and research that went into setting those prices, but there are also "pricing values" that we follow when it comes to our product prices. Here are a few of the values that we follow ...
- We do not want to have high priced products just because some think that we can.
- We believe that we should receive a decent wage for the work that we do on the farm raising great tasting pork, poultry, lamb, eggs, and beef.
- There is a defined amount that we feel we need to make in profit for each animal.
- We will be "price makers" instead of "price takers", but at the same time if our input costs lower for a sustained amount of time we would like to lower our prices to reflect that (as long as we still make our defined amount per animal).
- Our pricing will be transparent because we are not trying to sneak anything by anyone. Our customers are not just nameless/faceless cogs in a system, they are our friends!
The biggest piece of advice that I can give to anyone though when it comes to setting your prices is to not set them too low! I think the natural tendency for most of us is to undervalue our products because we are fearful of seeming overpriced. The reality is that it costs money to run any business and you must set your prices based on those inputs ... not on what a few people may think! If you do that then you can have a financially sustainable farm.
There is more to this episode though than the big pricing talk (because I do not like only talking about something I don't like). I will also spend some time talking about the latest happenings on Crooked Gap Farm, which this week includes building some new fence through the woods for a pig paddock. Then before the end of the show I share my "Hard Lesson Learned" for the week. This weeks hard lesson has to do with hay and my gamble that the prices would go down over the winter. That was a gamble that cost me big time and I'm already taking action to not let it happen again this year!
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(if you are interested in the music in this episode check out my brother's record label, Historic Records)
... I would begin with chickens! Both laying hens and meat birds because I'm too impatient to only do one or the other.
and 
I was convinced that cattle could and should be the centerpiece of my future farming operation.
