How to best calculate the real costs of production? This was an interactive workshop looking at different scenarios; field-scale production for wholesale/packers, CSA schemes and growing for veg boxes/direct marketing.
Susanne Padel (ORC): Chair
The session discussed the notion of profitability and split into groups according to sales outlets to establish the highlights and concerns for profitability.
The groups were organised by sales channels (CSA, box scheme, wholesale/farm shop), with each group discussing useful recording tools. The groups would report back, for ORC to use in future research/publications. Each group was asked to bring back 3 points for the rest of the audience.
Community Supported Agriculture (CSA)
- You have to grow everything for CSAs, which makes it a very labour and time intensive activity. There is an app to record sowing times, or tasks such as harvesting, weeding, that can feed into databases in Access. This is specific to CSAs, who use a lot of volunteer labour. It also links to Sage accounting system.
- It would be useful to be able to measure fixed costs of producing certain/average crops. Things like irrigation, electricity, etc.
- We’d like to measure the social gains of several crops, such as squash, pumpkins – both for the growers and for the consumer.
- Viability is more important than profitability. There is great demand for a robust handheld device and app.
- Crop reporting varies, as wholesale is just one of the avenues, and there were different views.
- Planting times/duration for different crops. It varies with the level the skill. Time seems to be the big issue, as too much labour can make the crop unprofitable. Lastly, there should be recognition of the carbon-profit.
- Growers record data anyway, routinely, and there should be easy to collect the needed data to establish profitability aspects of selling through a box scheme.
- Should we be looking at crops or at jobs for profitability? Both, as we can decide what not to grow and what we need to buy in. But we also need to know about Box profitability per unit, as this is what we sell.
- Measuring profitability in terms of space. It is necessary to devise the farm/garden areas into low-medium-high profitability.
- Case-studies can be useful and will enable growers to look at bench-marking for time (i.e. hand-labour vs mechanised).
- Access to current wholesale prices information is very important. Where do you look? Competitors? Supermarkets? Wholesales?
- Choose the market by their location. Leave the market, if it is not profitable.
- Quality and consistency are paramount. Irrespective of the weather or mood, the grower needs to be there with a goo looking stand.
- Standard work rates – for harvesting per hour – 70 euros retail sales per hour of harvesting (unknown source).
Individual speaker presentations and abstracts
Roger Hitchings: Profitable fruit and vegetable production (1.39mb pdf file)
A true profitability analysis can be expressed as: gross sales – expenses = profit. This is a disarmingly simple equation that requires a huge amount of information in order to produce a valid outcome. It can be reasonably easy to work through for single crops grown on large areas but can be particularly difficult for growers running a box scheme or supporting a CSA. A group of American organic growers in a project in Wisconsin worked on the basis of net cash income which meant knowing ‘how much cash they had at the end of the season to provide for themselves and their households—and perhaps take a vacation.’
Group facilitation: Roger Hitchings (OGA), Ben Raskin (Soil Association) and Tony Little (OCW)
This exercise will open with a brief presentation to cover available resources and a first attempt to identify the critical points in the production process. Two approaches to the assessment of profitability will be discussed – these are profitability in space (does the return from a given crop justify the space) and profitability in time (does the return justify the time required). There will be many questions to chew over in the interactive group discussions that will take up the majority of the time. Participants are invited to bring information and experiences to share.