I’d like to discuss food prices from a different perspective than they tend to get talked about. I find it interesting that a number of farmers commenting on yesterday’s post seem to feel uncomfortable about their pricing, and feel the need to justify the prices they charge customers in terms of the cost of feed, labor, insurance, taxes, etc., etc.
Unfortunately, most consumers don’t care about a farmer’s expenses (any more than they care about an automobile manufacturer’s expenses or a toy store’s expenses). What they care most about is getting the best value for their money. And the best value doesn’t necessarily equal the lowest price.
The farmer selling the $7-a-pound duck was showing some signs of understanding the value concept by emphasizing that the ducks were raised on organic feed, were a special breed with less fat than others, and were locally produced. For me, those are important benefits—attributes I know I likely wouldn’t find even at Whole Foods, and thus a good value.
The person who reacted by saying $7 was too much wasn’t necessarily saying she couldn’t afford the duck, but rather that $7 wasn’t a good value to her. Presumably, milk at $9 a gallon is okay. (I’m presuming she has spent that at least occasionally, because that is what the dairy sponsoring the listserve charges.) Maybe she needed to personally visit the duck-raising facilities, like she visits the dairy. Or feel that duck fat is good for you. Or understand that duck carcass can be made into soup (and receive a recipe along with the duck).
Where I’m going with this is to suggest that owners of sustainable farms who sell directly to consumers think about pricing in terms of benefits to the buyer (especially versus the competition, which is generally grocery stores). I can think of a bunch of attributes right off the bat whereby products sold directly excel: freshness, nutrition, taste, and safety.
Then there are other factors, even including scarcity. The fact that the duck farmer is likely the only one raising organic duck in the Boston area can be turned into a benefit. If it’s as tasty and satisfying as I suspect it is, I should feel good that I was one of the lucky ones who got to eat that duck.
If I was willing to travel 120 miles north of Boston, into Vermont, possibly I could find half a dozen producers of organic duck, and therefore not be surprised to pay perhaps $3.50 a pound. In fact, I do pay $2 a dozen for New Hampshire eggs, the same quality that costs me $4.50 near Boston, and $5 for milk that costs me $9 near Boston. It all gets into supply vs demand as well as demographics (what the local population values), but it also gets into the challenge of justifying price via benefits. The more competitors you have, the more challenging it is.
Now, if the Boston-area farmer was charging $10 a pound for her duck the next week because she felt she could get away with a higher price, I might very well feel she was ripping me off, and decide that that outweighed all the other benefits, and not buy from her again. If enough others felt the same way, this farmer might lose many customers, even if her product remained top notch.
Part of my point here is that farmers need to articulate their particular benefits to their prospective buyers. This is to reassure people they received good value.
But also, especially in this food arena, farmers need to educate buyers. Whole Foods has done a wonderful job of making consumers feel good about paying high prices for their food, via skillful use of education.
Often farmers take for granted processes that are highly valued by consumers. For example, raw milk producers typically cool their milk right after it’s milked, and meticulously clean their milking and bottling equipment to keep bacteria counts down.
Well, there’s nothing wrong with explaining—via a flyer, brochure, or internet newsletter—how the cooling process works and letting consumers know that the equipment is disassembled for cleaning once a week. It’s all reassurance to most that the milk will be free of pathogens…and thus a benefit. Then, you’re not just selling milk, you’re also selling insurance. (Yeah, I’m paying $9 a gallon, but it’s worth it to me to both get such a nutritious product and also feel really good about how safe it is.)
In this vein, I have to disagree with a few comments, like Dave Milano’s lament, “No matter how good a naturally-raised chicken or duck looks in comparison to today’s industrial foods, it is still what it is: a basic food.” My reaction: Shhh. The market has been so polluted with processed and unhealthy foods that “basic food” is now a premium product. That helps perfectly position many small farms to, finally, be in the right place at the right time. There’s nothing wrong with building your business based on the marketplace coming to value what you produce because your competitors have screwed up.
To the extent consumers feel good, and healthy, about their purchases, they’ll educate others and, as milkfarmer notes, "the revolution" will grow.
***
If you’re in the business of growing vegetables, and figured all the government harassment and interference is focused on farms with animals, I have some potentially bad news. The Cornucopia Institute reports that the U.S. Department of Agriculture is considering rules supposedly designed to reduce risks from pathogens, by restricting certain organic growing techniques.
This from a recent Cornucopia release: "The rules would likely mirror those that are already in place in California, where farmers have been asked to take extreme measures with little or no scientific justification. While the rules themselves do not directly eliminate biodiversity on farms, they discourage wildlife and vegetation. As a result, some large produce buyers, such as processors, supermarkets and fast food chains, are using those rules as a precedent to come up with their own standards–often extreme measures without scientific backup."
"For example, farmers have been told to destroy hedgerows and other non-crop vegetation around farms that provide important habitat for beneficial wildlife, and to erect fences around their fields, which negatively impacts widlife corridors. Such measures have not been shown to eliminate or reduce the likelihood of E.coli contamination."
Still more reasons to sell direct. And more evidence that the germ police remain out in force.
First, my bona fides: I personally go to great lengths and expense to have quality food. I support local farms and put my money where my mouth is. I also, by the way, have a good job, and can afford it.
But there are a lot of people to feed out there, and in my opinion, the majority view on this blog ignores them by promoting a vision that positions small farms and high-quality food as a high-priced niche market. That may be great for involved farmers, but we’re talking food here, not designer sneakers. ALL people should have reasonable access to high quality food.
Discussing the miserable expense-to-value ratio of henwhisperer’s two hogs tells us everything about henwhisperer’s commitment to health and quality, and nothing about feeding the masses. Surely the revolution can result in vast quantities of high-quality, moderately-priced food. The proof is in the pudding, and here’s one small real-life example:
My friend Anthony has a grass-fed dairy that sells milk to the coop. Anthony’s milk is extremely healthful, and clean enough to sell raw. Unfortunately in our very rural region there is no market locally for volumes of raw milk, largely, I believe, because there is no infrastructure to support it. But if that infrastructure were present, and Anthony received $5.00/gallon for his milk, he would be on financial easy-street. On the other hand, I own a family cow. My production structure is such that I could break even at $10.00/gallon.
According to the majority view here, everybody should just shut up and pay the $10.00 (or more, since profit is my right). Is that our vision? Is that what we believe "sustainable" is all about?
To me, this is about balance and fairness, and right-minded production modelsbringing "basic food" to everybody. Promote that, and we have a real revolution of the people.
"The notion that grass fed milk is ‘basic food’ and therefore should be sold at less than it is worth, is completely bogus."
"…less than it is worth" is your phrase, not mine. My hope is that this discussion will help discover what basic food really is worth. Speaking as if there is no reasonable upper price limit is, IMHO, unhelpful. (Similarly, likening a reasonable question about the relative value of good food as akin to supporting price controls, is both unhelpful, and unfair.)
Now, again, if a good farmer would do very well financially on $5.00/gallon, (and remember, this is a real-world example) isn’t the appropriate response to find out how he’s doing it? To at least wonder how he’s doing it? Or should the Director Of Price Controls force him to RAISE his price to match that of less efficient production models?
Now please… I have never suggested, and do not now suggest, that anyone should be forced to work for less than a living wage. I’m not suggesting even that ANY wage is appropriate at ANY level. I am merely saying that it is honorable to try to find a food production method that makes good quality food at the most reasonable price possible. Believe me, if you told my friend Anthony that he should be charging $8.00/gallon when he feels he’s paid very well at $5, he would be rightfully dumbfounded. Responsibility regarding healthfulness of the product goes hand-in-hand with responsibility regarding its price.
I tried to raise ducks. They have so much more personality than chickens. We couldn’t kill them. But the coons DID, and now we only have one left – the drake that befriended our dog. They sleep together.
I can kill chickens just fine. I have never killed a duck.
We have free range chickens. We had lots of quiche and souffle for Thanksgiving.
Gwen
I agree, the price of quality food is too high. But what can we do? The small farmer cannot lower his prices and still make a living.
Correction: even at these high prices most of us cannot make a living without outside income. At the two farmers market I attend only three venders make 100% of their income from farming. Of those three, two have recently quit for better paying jobs.
The only way a farmer can sell for less is if he has inherited the whole farm infrastructure or have been at it long enough to have paid off all debt.
If people want quality nutrition at reasonable prices they will have to work for it, they will have to want it badly enough to force changes in agricultural policy. For instance, take the subsidy money going to large grain farmers and redistribute in to the farmers producing quality, nutrient dense food, or relax the onerous regulations for the small producer that increases his expenses. (Inspected processing of our meat costs us $1.50/lb. If we could do on farm processing, we could lower our prices by about 1.00/lb.)
It should not be the farmer’s burden to feed the poor, but the whole of society. The ultimate responsibility of the farmer is to provide for his family, if this means charging prices that not everyone can afford, so be it.
Would you do the ‘good job’ you have, for half the wage? (And if you did do it, would you really do as ‘good’ a job?)
Many farmers I know are into making raw milk because of the milk….not the money. The money is necessary to keep the bills paid…especially if that farmer isn’t on land left to him by his dad. If your friend were closer to the infrastructure his land payments would be higher.
The notion that grass fed milk is ‘basic food’ and therefore should be sold at less than it is worth, is completely bogus. It diminishes the product, the quality created, and the effort put into its making. That farmers should be charging less than they can out of fairness and balance is poppycock. Doesnt seem too fair or balanced for the farmer.
Calculating undervaluation is better left to the milk processors.theyve got plenty of practice at it, and have been doing a good enough job driving dairymen out of business.
I think what some would like is to nationalize your farm and then
appoint a Director of Price Controls to monitor your prices and activities. Of course if you slip the Director or his assistants
a little something (ahem) it wouldn’t hurt your chances to stay in
business.
"ALL people should have reasonable access to high quality food." They DO. It’s a myth to believe that they don’t. It is a personal choice whether to spend your dollars on quality food or designer sneakers. Quality food or ipods, directv, cell phones, cigarettes, etc. I used to be the market manager of our small, rural farmers’ market, and the people who would haggle over the price of the food were ALWAYS the ones driving the nicest cars. As in, can I get 5 cucumbers for a dollar instead of 4? Pennies! They were complaining about pennies, and by the cars they were driving they could afford to pay the farmer what he/she asked.
There are 3 food stamp recipients who are members of my local food co-op. Those people, with their limited resources, seek out organic, healthful foods, even if that mean buying less food. In my experience, when you eat quality, nutrient-dense foods you really don’t need to eat as much anyway.
But back to my original question…why are farmers always being accused of ripping people off if we charge a fair price for our products? I spent $15,000 in the course of 6 weeks buying hay for the winter, and it won’t even last all winter. Do all of you who complain not think it takes A LOT of money to run a farm, and run it well? Do farmers not deserve to have nice vehicles, take vacations, buy health insurance, etc., etc., all the little things that most people take for granted? Don’t we deserve to live nice lives, too? I work 365 days/year, 7 days/week, SPLIT SHIFT – morning chores start at 7 am and evening chores end at 9 pm. How long would most people last, given the long hours and hard work? Anyone who complains that quality food costs too much is welcome to my farm to shadow me for a week, but at the current commodity pricing structure there’s a good chance you’ll owe ME money by the end of the week.
Everyone has the choice to buy quality food. But let’s face it, many people would rather have ipods, cell phones, and fancy cars. Too bad, but it’s their choice.
I doubt there are many, if any, on this blog that would want to nationalize farms and institute price controls.maybe those who monitor it for the guvmint?
Daves point is understandable, and concern for the masses is not something to be ashamed of. Raw milk should be available to all who desire it But stressing this, here in the infancy of this movement, isnt wise. Mass production, for the masses, doesnt fit the ideal raw milk model well. Increasing available quantities, while preserving the quality demanded, is no small job, let alone trying to educate those masses to the benefits. Currently, defending the right of access for those who are already informed (and keeping them supplied) is more critical than worrying about getting raw milk into organic from walmart shoppers.
Trusting your farmer makes this whole revolution thing work. Knowing that the person creating your food has gone to the utmost extreme to make it as nutrient dense and healthy as possible is the key. If you can trust you farmer to do this, why cant you trust him to set a price that is fair for you both. Those that are in it just for the money will reveal themselves quickly (the quality will reflect it).
The dynamic is a bit different plopping a gallon off the supermarket shelf.
Trust. What is it worth?
Know your farmer, know your food, could be construed as elitist.but one thing is for sure, when it becomes commonplace, something else special will come along and take its place. One will never suppress the human desire for distinction.
I think that many people believe that the "processed" foods they eat and buy are "quality". I beg to disagree with them..
I am hoping that my posts did not allude to the organic/small farmers as price gouging. That certainly was not my intent. Fair market price should be paid for all items/services.
I feel that many people don’t know how to prepare nutritious foods, many cannot afford organic only, etc. The more I read, the more I shy away from the processed foods, and I do buy local. If we don’t grow it in our garden and I can’t find it at the Farmers Market, then we do without most times. I think bananas are the only imported fruit we buy.
My first point is that just like other industrially produced product, our conventional food supply (including "organic") is the product of an industrial production model, and as a result is extremely cheap. However, as many have discovered that often happens with plentiful and cheap goods, their quality is also "cheap". The old adage rings truer in food than anywhere – "you get what you pay for".
What folks don’t understand is to be able to buy high quality food for low retail prices requires an industrial production paradigm. Even if we break the division of labor down to a manager overseeing hundreds of acres of say poultry pens being pulled across the fields by abused migrant farm workers, and then selling this production to retail stores, we still won’t approach the artificially low prices that we currently see for industrial chicken. These prices reflect massive debt risk and marketplace supported bankruptcies from the factory farmers, large-scale amalgamation of feed and processing plants with the resulting worker abuses, and lastly, artificial pricing by grocery chains which in turn crank up the price on other less price sensitive goods in order to keep the chicken prices down. People either do not realize the true costs involved in food production in economic as well as human welfare terms, or they do not care – "just give it to me cheap".
The only reason people get their farmer produced eggs, milk and such as cheaply as they do (some figures quoted include $5/gal milk and $2.50 doz eggs) is that in all these cases, the farmer either lives in poverty or off his inheritance, or actually loses money and makes up for the difference with an off-farm job. Not only are consumerers ignorant of the real costs of quality food production, but so are the farmers. Just to give an idea of what farm-raised food should cost when bought retail from the farmer, I would suggest $10 to $12 a gallon for milk and $5 to $6 a dozen for eggs, maybe even more, and that is for rural areas. For within the city, additional delivery prices or else higher land prices would drive these numbers even higher. Even at those prices, a farmer could probably only be reasonably profitable if he limits his production to only one or two food items. Even though there is much synergy to a diverse production, it drives labor up significantly. Even the king of natural farmers, Joel Salatin is going more and more to low labor mono-culture of cattle and hogs. I also believe that he has exaggerated the salary one can expect from this kind of living. The fact that for most of his career, he cuts and sells firewood in the winter shows how low of a wage he is willing to work for.
My second point is just like many people think that health care is a basic right and therefore should be free, they also believe that food is not far behind in that it should be free or low cost. It amazes me that people will plunk down money for cell phones, cable tv, starbucks coffee, new cars, gasoline, and a myriad of other luxeries, yet balk at $10 a gallon for raw grass-fed milk. They will even plunk down $4 for a box of sugar-puffed cereal, but refuse to pay $4 or $5 a dozen for pastured eggs. Even though there is an infinite greater food value in the eggs than the cereal, the pleasure factor is greater for the cereal for many and that is what is trully important to them.
What is even more amazing to me is that while Whole Foods, et.al. are wildly successful despite very high prices, their customers are not likely to buy from local farmers. If they did, they wouldn’t dicker over prices, for they certainly don’t have a problem with their botique prices. Most Americans don’t really want quality food, they are more concerned about luxury and feeling like they are doing something good. The mere fact of shopping at Whole Foods is what really matters, not what they are actually buying. For example, there are thousands who think nothing of paying $32/quart for Gogi juice, yet won’t touch real milk for $6/gal. Most Americans are just plain nuts.
I don’t advocate anyone going into farming as a profitable endeavor. Instead, people ought to grow their own food if they desire, and if they want to buy quality food, buy it from a local farmer and insist on paying a price that will be profitable for him. If he can’t make a good living at the price he receives without outside income, then he is not getting enough. It is amazing that some people think profit is a dirty word, especially when it comes to growing food. Folks, profit is what you earn from your job. Would you keep doing your job if it did not pay anything? Would you still do it for $2/hour? Of course not, so why do you want to exploit someone else? If a farmer’s wages are worth say $20/hour, then he would need to "bill out" at probably $60/hour or more. In other words, the time he spends taking phone calls, making deliveries, doing chores ought to earn him at least $60/hour in retail sales. That is just basic business realities.
BTW, $7/lb for duck is very reasonable even for conventional feed. Have you ever tried to pluck a duck? That service alone is worth at least $3/lb.
I am so glad I am not the "average American"!!
I am going to make a point to ask my farmer the next time I see him if he is making money, breaking even or falling behind. I have found over the last year or so of my conversion to whole, local foods that I don’t really spend a whole lot more money than I used to. I find cooking from scratch and using all parts of the food item really stretches my food dollars.
It comes down to education and willingness to adjust your life style.
Elizabeth said <we need to look at ways to reduce population growth. > I think people who are eating conventional, industrial foods are taking care of that on their own. Increased infertility and disease will only increase in the future.
I agree with Evelyn, education and the willingness to change is what it comes down to. Unfortunately most people don’t appear to do or want to do either.
There is that saying that you are what you eat. Disease did decrease with improved sanitation. Yet, I believe that there is a link between disease and the processed foods that are presented to the masses. Breast cancer is has not decreased, Alzheimers was almost unheard of 20-30 years ago, acid-reflux was NOT a common ailment, etc. Food and environment are big factors in how the body reacts and of course, each person is individual and what erodes one persons immunity may not do exactly the same to anothers.
Any chance this cheaper farmer is Amish? Amish farmers regularly undercut prices by more than 50% due to their unique lifestyle. I wish I could live like that,then I too would make a "comfortable profit."
I sell my eggs at a loss for $2/doz, and regularly get complaints that mine are overpriced since the Amish sell them for $1. But my eggs are better. How do I know? because my hens have stopped laying for the season and I’ve been buying theirs; and compared to mine, theirs are marginally better than grocery store eggs. But hey, they’re still half the price of mine.
I’ve been selling goat milk for four years, at a loss…every year I have to raise the price to keep up with inflation. I consider myself lucky if the money covers their feed and minerals. Why do I continue? Like Milk Farmer says, I do it because I’m committed to raw milk.
Unfortunately, the Amish started selling goatmilk for 50% less. and I lost most of my local customers. I know the Amish milk isn’t as good as mine, it’s goaty-tasting and they keep it too long before sale, just like they eat their freshest eggs and sell their oldest eggs. But customers want bang for their buck: Wow, the Amish sell for HALF, a real deal! Check out the Amish, it’s half the price!
I have countered by educating, both verbally and with flyers, as to why the prices for my superior produce is higher, but it doesn’t matter…the cheaper price is what counts.
Of course, I could lower my price a couple of dollars by cutting corners… stop feeding kelp and other quality minerals, feed last year’s moldy hay at $2/bale instead of this year’s second cutting at $4, make the customers bring their own containers instead of providing glass ones. But cost-cutting won’t bring my price down to $3/gal… eventually, even I will tire of providing quality milk at a loss.
But hey, that’s the American Way… competition drives down the price and the cheaper price rules, even if the quality is deplorable.
When I was on foodstamps for 2 years several years back (divorce, nursing school + 3 small children), I nearly always had extra stamps. I might have bought an organic duck then, just to use them up. I couldn’t legally spend them on anything but food. The way I shopped and cooked, the dilemma was how to use all of the stamps. Anyone on foodstamps who runs out has a serious problem with management of abundant resources.
I hope this puts perspective on the "feeding the masses" issue.
Gwen
What bugs me is people with more money than I (based on their clothing and the relatively new vehicles they drive to my farm) complaining about my prices when I’m driving a 18 year old truck with 180K miles that gets 12 mpg.
Well, guess that’s why they’re rich…they watch their small change, while I spend mine on kelp. 🙂