One of the things we're participating in this year is the North Sound Food Hub, an online platform to sell produce, meat, cheese, milk, and prepared foods. We can upload our food item to the hub, and then restaurants, co-ops, instutitions, etc. can buy the item directly through the website. We deliver the order to a walk-in freezer at Bow Hill Blueberries and the buyers pick up directly from the freezer. Once a week a truck comes from Seattle and delivers to the 21 Acres Food Hub in Woodinville, and from there will deliver to local buyers. The food hub has been in testing mode for the last few years, and this year is the first year it's being rolled out on a larger scale. For the first year, everything is free for buyers and sellers, except for a 3% fee on credit card sales.
We don't have a lot of inventory, but we had one sale earlier in the month, and a second sale today. It was for 20 pounds of carrots and 10 pounds of mixed snap beans from the San Juan Food Co-op (Thank you!). It was a small order and it was easy for me to capture all my time, so I thougt I'd use it as an example of the economics of selling produce.
Since this kind of purchase is essentially wholesale, we reduce our prices to reflect the fact that we don't have to account for the time at the farmer's market and the fees paid to farmer's market. With the reduced price, we sold the carrots for $1.25/lb and the beans for $3/lb. That's a discount of .25 cents/lb for the carrots and $.50/lb for the beans. So, the total for the sale was $55. The 3% charge takes us down to $53.35. It took me exactly three hours to harvest the carrots and beans, wash them, and package them up. After I packaged them, it took me about 15 minutes to get the car loaded, drive the 1.5 miles to Bow Hill Blueberries, drop everything off and fill out the paperwork, get distracted for a few minutes talking to someone I knew, and then drive back home. Oh, and it cost us about a $1 for the packaging, which we could probably get for less money if we could buy in larger quantities (which we can't because we don't need larger quantities right now).
So, thus far, we're at $16/hour. Not bad, but there was a lot of other work that happened before today. I planted the carrots and beans, cultivated them several times, watered them on a few occasions, and plowed and prepared the soil in the spring. It's difficult to figure out how much of that time to attribute to the produce sold today, but it was at least an hour. Probably more, but we'll stick with an hour. We're at $12.32/hour.
There were also unaccounted expenses. Those seeds cost me money. Probably about $4 for what I picked today. I also need to pay for the land. I'm figuring I needed about 0.17% of 4 acres, which comes out to about $4.80. I can't use my agricultural well water to wash the produce, so I need to use our city water connection, so add in about $.50 for water. I also burnt about $.40 in gas just driving 3 miles, we'll round up to $.50 to account for wear and tear on the vehicle. There's also depreciation on the pipes, washing area equipment, tractor, planter, implements, and tools I used, etc. Also fuel used in running the tractor to do the cultivation and plowing, insurance costs, licensing fees, etc. Let's just ignore that, but there is some cost there as well.
So, altogether, I calculate I made $42.55 after expenses, and it took me 4 hours and 15 minutes which comes out to $10.01/hour. That's about $5 under my goal hourly wage.
There are certainly some things I could invest in to make harvesting/washing easier and faster and make planting and cultivation easier/faster, but those that takes money. With another year's experience, I might also be able to make myself slightly more efficient with my existing equipment, but it's not going to increase my profit by more than a couple dollars/hour at best.
In the end, I'm happy to have made a sale and be making money. I would be happier and more likely to stick with farming long term if I saw a path to greater hourly profits.
We don't have a lot of inventory, but we had one sale earlier in the month, and a second sale today. It was for 20 pounds of carrots and 10 pounds of mixed snap beans from the San Juan Food Co-op (Thank you!). It was a small order and it was easy for me to capture all my time, so I thougt I'd use it as an example of the economics of selling produce.
Since this kind of purchase is essentially wholesale, we reduce our prices to reflect the fact that we don't have to account for the time at the farmer's market and the fees paid to farmer's market. With the reduced price, we sold the carrots for $1.25/lb and the beans for $3/lb. That's a discount of .25 cents/lb for the carrots and $.50/lb for the beans. So, the total for the sale was $55. The 3% charge takes us down to $53.35. It took me exactly three hours to harvest the carrots and beans, wash them, and package them up. After I packaged them, it took me about 15 minutes to get the car loaded, drive the 1.5 miles to Bow Hill Blueberries, drop everything off and fill out the paperwork, get distracted for a few minutes talking to someone I knew, and then drive back home. Oh, and it cost us about a $1 for the packaging, which we could probably get for less money if we could buy in larger quantities (which we can't because we don't need larger quantities right now).
So, thus far, we're at $16/hour. Not bad, but there was a lot of other work that happened before today. I planted the carrots and beans, cultivated them several times, watered them on a few occasions, and plowed and prepared the soil in the spring. It's difficult to figure out how much of that time to attribute to the produce sold today, but it was at least an hour. Probably more, but we'll stick with an hour. We're at $12.32/hour.
There were also unaccounted expenses. Those seeds cost me money. Probably about $4 for what I picked today. I also need to pay for the land. I'm figuring I needed about 0.17% of 4 acres, which comes out to about $4.80. I can't use my agricultural well water to wash the produce, so I need to use our city water connection, so add in about $.50 for water. I also burnt about $.40 in gas just driving 3 miles, we'll round up to $.50 to account for wear and tear on the vehicle. There's also depreciation on the pipes, washing area equipment, tractor, planter, implements, and tools I used, etc. Also fuel used in running the tractor to do the cultivation and plowing, insurance costs, licensing fees, etc. Let's just ignore that, but there is some cost there as well.
So, altogether, I calculate I made $42.55 after expenses, and it took me 4 hours and 15 minutes which comes out to $10.01/hour. That's about $5 under my goal hourly wage.
There are certainly some things I could invest in to make harvesting/washing easier and faster and make planting and cultivation easier/faster, but those that takes money. With another year's experience, I might also be able to make myself slightly more efficient with my existing equipment, but it's not going to increase my profit by more than a couple dollars/hour at best.
In the end, I'm happy to have made a sale and be making money. I would be happier and more likely to stick with farming long term if I saw a path to greater hourly profits.
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