Coaxing profits from your farm - ellen polishuk
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This document discusses ways for farmers to increase profitability by analyzing costs and revenues. It emphasizes the importance of keeping detailed records on expenses, sales, labor hours, and yields in order to understand which crops and market channels are most profitable. With data on costs of production, sales prices, and labor efficiency, farmers can identify ways to boost profits, such as increasing yields, raising prices, selling more volume, or reducing operating costs without impacting quality. Keeping good records provides the information needed to make informed decisions about improving whole-farm profitability.
Coaxing profits from your farm - ellen polishuk
- 1. Coaxing More Profit from Your Farm: Just Because It Sells Doesnt Mean Its Profitable! CFSA Annual Conference November 2015 Ellen Polishuk
- 2. Potomac Vegetable Farms Northern Virginia (DC area) 2 Farms 4 owners: Hana, Hiu, Ellen, Carrie 3 other permanent FT staff Many seasonal staff Ecoganic Methods $1 million gross sales
- 3. Our Markets Farmers Markets 3/week (65% of income) 60 CSA members (7% of income) 1 roadside stand (14% of income) Wholesale to our sister farm operation (14%)
- 4. whats your limiting factor?
- 5. whats MY limiting factor?
- 6. I sold out of carrots in 2 hours, I should grow more, right?
- 7. How do you know whats profitable for you? Individual crops and/or enterprises? In which market channels? In all seasons? Is it all gut feeling or do you have any facts?
- 8. profitability is a state of mind
- 10. This is Not The Truth
- 11. Biggest Winners 2012 Gut Feeling Tomatoes: Hybrid, heirloom, cherry Herbs: Perennial, basil, cilantro Greens: lettuce head, chard, spinach, mustard, arugula Summer squash 2014 With DATA Tomatoes: Hybrid, heirloom, cherry Herbs: Perennial, basil, cilantro Greens: lettuce head, chard, spinach, mustard, arugula, lettuce mix Summer squash Kale Eggplant, Cucumber, Sweet Potatoes
- 12. The 2014 Winners Circle most profitable by net profit % most profitable in total net profit Gross Profit tomatoes, heirloom tomatoes, hybrid tomatoes, hybrid tomatoes, hybrid tomatoes, heirloom tomatoes, heirloom squash, summer squash, summer squash, summer kale, loose potatoes lettuce mix lettuce mix cucumber kale, loose arugula herbs chinese greens potatoes tomatoes, cherry tomatoes, cherry cucumber lettuce mix arugula spinach kale potatoes tomatoes, cherry kale, loose cucumber eggplant chinese greens mustard sweet potatoes arugula herbs cauliflower spinach spinach chinese greens sweet potatoes eggplant mustard mustard kale herbs eggplant sweet potatoes kale cauliflower collard
- 13. Biggest Losers 2012 Gut Feeling Broccoli/Cauliflower Potatoes Beans Onions Cut Flowers 2014 With DATA Broccoli/Cauliflower Potatoes Beans Onions, leeks Cut Flowers Beets Celeriac
- 14. Crops I thought were okay and maybe they arent Dill, cilantro (transplanted) Radish, turnip, beets Garlic Scallions Lettuce head
- 15. What are reasons for Losers? YIELD PROBLEM? COST PROBLEM? PRICE PROBLEM? SALES PROBLEM?
- 16. Yield problem
- 17. Yield Problem
- 18. Cost Problem
- 19. Cost Problem
- 20. Price Problem?
- 21. Sales Problem?
- 22. What about those carrots? My Breakeven Price is $4.20 per bunch
- 23. Which Channel Makes the Most Profit? Farmers markets are the most profitable channel by percent of sales and by total dollars earned How Do I know This?
- 25. A key to comprehensive, whole farm cost approach is the assignment of every expense somewhere!
- 26. Excel Spreadsheet Grower inputs data on 3 separate pages Page 1 = All expenses Page 2 = All Sales Page 3 = Labor hours and acreage by crop Veggie Compass How it is Organized
- 27. Veggie Compass How it is Organized VC generates a farm financial picture on the next 3 pages Page 4 = Cost of production by crop Page 5 = Sales Output Page = Per Crop Profit and breakeven prices Page 6 = Profit and Loss Whole Farm and by Market Channel
- 28. Veggie Compass Needs this Data from YOU Farm Expenses Farm Sales by crop Growing area of each crop Crop specific expenses # of plants in greenhouse Total greenhouse labor hours Labor hours by crop Not Crop Specific hours
- 30. Veggie Compass Gives You Back Net Profit by market channel Cost of a crop before harvest Cost to harvest and pack each crop Break even prices Average Hourly Labor Cost
- 31. Whole Farm Profit Report by Channel Information: Sales by channel Profitability by channel Unique expenses of Channel
- 32. Breakeven Price Potatoes = $49.67 per 25 pound pony = $1.98/pound Radishes = $4.38 per bunch Sweet Potatoes = $46.34 per pony = $1.85/pound Pricing Guidance - Breakeven Price
- 34. Record Keeping Blues: Remedies for Losing It Keep systems simple and easy Designate one or two people to be responsible (and maybe you are not one of them!!) Accountability helps
- 35. For Detailed Task-by-Task Record Keeping Develop easy-to-use forms Make it part of your routine (SOPs) Do it every day or twice a daydo not put it off till tomorrow. Require employees to do basic record keeping such as recording field activities, harvest amounts, and tracking time by crop
- 36. Record Keeping Tools Many optionsfind one that works for you OR works for your farm Log books (Examples: crop journal, mileage log) Calendar White board Time cards Spread sheets Financial software Hand-held electronic devices
- 37. What records to start keeping Yield Sales Labor
- 38. Getting Better and Better Records yield, labor, sales Good By crop Better By crop and by field Best By crop, by field, by channel
- 39. What records really matter for profitability? Biggest Overall Expense? Labor Most variable expense from crop to crop? Labor Hardest Expense to track? Labor Most critical factor for you as a business-owner? Labor
- 40. Labor Records Good Keeping timecards and totaling labor hours Keeping track of your hours Better Tracking hours by activity: grow, harvest, sell Best Tracking hours by activity, and by crop!
- 44. The Future Theres an app for that! Veg Compass
- 45. Other Data Gathering Ideas on your farm Swagging Pulsing Snapshot metrics
- 47. Is the Juice worth the Squeeze?
- 48. You Cant Manage What You Dont Know Get Some Numbers
- 49. Production for Profit Using Records and Your Farming Know How to Increase Profits
- 50. 3 Main Avenues to Improve Profits Increase Revenue Reduce Operating Cost Reduce Overhead (another days topic)
- 52. How to Increase Revenue? Grow More = Increase Production Grow the same but Increase yield Grow the same but Increase price Grow the same but Sell it All
- 53. Increase production yeah, but only of crops that are profitable and that you can sell!
- 54. Increasing Revenue Grow More = Increase Production Grow the same but Increase yield Grow the same but Increase price Grow the same but Sell it All
- 55. Increasing Yield
- 56. Benchmarking Yield? Conventional Ag: Knotts Vegetable Guide University Crop Budgets (Iowa State) Smaller Scale Sustainable Ag: The Market Gardener, Fortier Roxbury Farm Harvest Guide (on the web) Organic Farmers Business Handbook, Wiswall (20 crops) CFSA Crop Budgets
- 57. My Yield Data
- 58. My Planting Log by Bed Feet
- 59. Other Yield Benchmark Ideas Your own data from the past Your Extension Agents eye Your Neighbors Eye What other Farms Look Like? Hint hint go visit other farms!
- 60. Increasing Revenue Grow More = Increase Production Grow the same but Increase yield Grow the same but Increase price Grow the same but Sell it All
- 61. Increase Price: A little change in price can make a big difference. Cost of production Price Gross profit per bunch Gross profit per 100 bunches Percent increase in profitability $1.00 $1.50 $0.50 $50.00 0 $1.00 $1.75 $0.75 $75.00 50% $1.00 $2.00 $1.00 $100.00 100% Bunched Chard, or Parsley or
- 62. Whats keeping you from raising your price? What are you selling? (Check Your Value Statement)
- 63. Increasing Revenue Grow More = Increase Production Grow the same but Increase yield Grow the same but Increase price Grow the same but Sell it All
- 64. Sales Problem?
- 65. Sales Problem?
- 66. Are you a Market maker or a Market taker?
- 67. PVF changes to our Basket of Goods CSA modifications Split seasons Add-ons Market style Pay by credit card Split payments Roadside Stand Secret stand Buy in more products Farmers Market Credit cards More produce in shoulder season
- 68. 3 Main Avenues to Improve Profits Increase Revenue Reduce Operating Cost Reduce Overhead
- 69. Reducing Operating Costs Without Impacting Yield or Quality
- 70. This is how I know my cost of production wonky
- 71. Cost Problem
- 72. Cost Problem
- 73. Cost Problem?
- 74. Cost Problem?
- 75. Cost of Production Components of Operating Cost on Successful Multi-Species Vegetable Farm Labor 62% Seed, fert, plants 12% Machinery 8% Marketing 9% Misc 9% Jim Munsch,2011
- 76. 2 choices on labor expense Either spend less on labor Or Get more out of every labor dollar spent
- 77. Getting more for your labor dollar Become a better manager! Get better labor; Better pay, better benefits Incentivize Productivity Bonus, profit sharing, power sharing, raises, praise, benefits
- 78. Just What are Your People Doing? Pick and Pack 60% Grow 30% Market 10% Labor Distribution on Successful Mixed Vegetable Farms from Midwest
- 79. Swag vs Real Data Harvest and Pack, 50% Growing 25% selling 25% PVF Labor Distribution 2011 SWAG Growing Farm Profits 2013, by Ellen Polishuk Harvest, pack 43% Grow 33% Sell 24% 2012 Labor Distribution at PVF Actual Data
- 80. Knowing these numbers For all growers - Focus on how to make picking, packing and washing more efficient For me - Spend less time on the growing
- 81. Labor Benchmark Beets, bunching - Yield = bunch per foot at 7200 bunches to the acre - Value = $1.50 per bunch at $10,800 per acre. Remainder is harvested for beets without tops at a value of another $4,000 Standards: - Harvesting: 30-40 bunches per hour per person depending on quality of the leaves @ approximately 200-250 hrs per acre in cutting plus loading and unloading boxes from and to washing area Harvest: 30 bunches per hour TOTAL = 2.6 minutes per bunch Washing: 100 bunches per hour or 23 bunches per hour From Roxbury Farm Harvest Guide
- 82. How to think about other production costs? Is lowering the cost of inputs NOT going to affect yield or quality? Is it worth your time to seek out these dollars? Seed Fertilizer Fuel Tools Supplies
- 83. You Cant Manage What You Dont Know Get Some Numbers