The price you need for your products is based on your cost of production and marketing. But the price you get for your product comes down to value.
And value is subjective. In my first year at Rock Spring Farm, I couldn’t get $1.00 per pound for our tomatoes at the Decorah, Iowa, farmers market – but I could sell exactly the same tomatoes for $2.50 a pound in Rochester, Minnesota! The same tomato, sold in the same way, had much more value for my Rochester customers. Guess where I sold my tomatoes?
I also found that I could sell my salad mix at a higher price than my competitors in Rochester. Why? Because it looked better in the bag and lasted longer in the refrigerator than the other salad greens at the market. We consistently nailed the production on salad greens, and followed it up with great post-harvest handling. Same market, same crop, but with a significantly higher value.
If you aren’t getting the price you need for your products, you’ve got four choices:
To make money farming, you absolutely must match your value proposition to your customers.
And value is subjective. In my first year at Rock Spring Farm, I couldn’t get $1.00 per pound for our tomatoes at the Decorah, Iowa, farmers market – but I could sell exactly the same tomatoes for $2.50 a pound in Rochester, Minnesota! The same tomato, sold in the same way, had much more value for my Rochester customers. Guess where I sold my tomatoes?
I also found that I could sell my salad mix at a higher price than my competitors in Rochester. Why? Because it looked better in the bag and lasted longer in the refrigerator than the other salad greens at the market. We consistently nailed the production on salad greens, and followed it up with great post-harvest handling. Same market, same crop, but with a significantly higher value.
If you aren’t getting the price you need for your products, you’ve got four choices:
- Reduce your cost of production, marketing, and distribution, so that you can charge a lower price for your current value proposition;
- Decrease your value proposition;
- Increase your value proposition; or
- Find new customers.
To make money farming, you absolutely must match your value proposition to your customers.
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