TRENDS – Want to make money farming? “It can’t be done with small farms,” we were told way back when by the status quo.
But we knew they were wrong. And now the status quo is catching up and seeing the new mathematics of micro eco-farming. When calculating how small and micro farms make money farming, you don’t use the same calculations as you do for big-ag commodity farming. Theirs is a different world.
Here’s a quote from a recent USDA report on how small and micro farms make money farming:
“Historically, farmers have been “price takers” when they deal with mainstream markets such as wholesalers, terminal markets, mainline food service distributors, or brokers—i.e., they exert little control over the prices of their goods. Such price-sensitive market outlets tend to favor farm enterprises that produce large quantities of undifferentiated agricultural commodities at low cost. The consumers who purchase these goods also tend to be relatively “passive” buyers, for the most part neither aware of nor interested in how or where their food was produced.
Today, however, an emerging wave of alternative marketing channels is enhancing the potential for smaller farmers to generate larger revenues by off ering products with specifi c qualities or production process characteristics not commonly available from mainstream suppliers. These might include featuring unusual or “heirloom” varieties of products (especially agricultural products with characteristics that deteriorate or diminish when transported long distances). Other traits that may increase marketability include organic certification, integrated pest management, sustainable farming methods, or locally grown product.
These alternative market channels can be divided into two categories—farmto-consumer marketing and farm-to-firm marketing. In farm-to-consumer marketing, the farmer sells directly to individual consumers without an intermediary. Farmers markets, farm stands, subscription farming schemes (also known as community supported agriculture, in which consumers prepay for a season’s worth of fruit and vegetables, thus sharing the risk with the farmer), pick-your-own operations, and fl ea markets are the most common forms of direct-to-consumer food marketing.
Generally speaking, in direct-to-consumer marketing, farmers are “price makers,” able to determine prices because their products have distinct characteristics, not easily substituted, that consumers want.” The full PDF is at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5076556&acct=wdmgeninfo