by “Charge what you’re worth.”
It’s one of the first lessons you learn as a small business owner — but also one of the most challenging.
As a farmer, you work constantly to plant, harvest, and raise the freshest, highest-quality produce and meats. And after all this hard work, your next step is to set prices that offset your costs and generate a profit.
In this blog, we’ll explore the fundamentals of pricing farm products and share four strategies for setting prices that appeal to customers and reflect your farm’s value.
Pricing Farm Products: The Basics
How much should you charge for your farm products? Unfortunately, there isn’t a cut-and-dry answer.
Your farm’s pricing approach should depend on several factors, including operating costs, customer preferences, nearby competition, and more.
But as a local farmer, you have a significant advantage: You offer premium products, so you can charge premium prices.
This means that customers don’t come to your farm looking for the lowest prices and best deals. Instead, they want fresh, delicious, responsibly farmed produce and meats and the opportunity to support you.
Let’s explore some specific strategies you can use to keep your customers happy while charging what your products are actually worth.
1. Know Your Expenses
Turning a profit depends on your revenue outweighing your costs — which is why an accurate understanding of your farm’s operating expenses is critical for setting the right prices.
Before selling a single pound of beef, calculate how much it costs to produce. Include the price of feeding, sheltering, and processing the cow, as well as indirect expenses like leasing your grazing lands, paying your farmhands, and running your farm shop.
Once you know your overhead costs, you’ll know your minimum breakeven price, and you can mark it up to turn a profit.
2. Adopt a Weight-Based Approach
Take a look in your farm’s freezer and compare two steaks. Chances are, they’re completely different in size and shape. So why would you sell them for the same price?
A weight-based approach is non-negotiable when pricing farm products like meat and produce. Here’s why.
- Consistency: Pricing products by weight helps you provide customers with a consistent product every time they order from your farm store. Instead of receiving varying portions, they’ll always get exactly what they ordered.
- Choice: Some families don’t have the space or budget to purchase a half or quarter of beef, so offering flexible sales by weight can expand your customer base and make your farm-fresh products more accessible.
- Accuracy: Tracking and selling products by weight takes the guesswork out of counting your inventory, simplifies the order packaging process, and makes it easier to keep accurate stock levels.
- Sustainability: A weight-based approach helps you avoid unsellable scraps, minimize waste, and turn every last ounce of meat into profit.
To reap these benefits and implement a weight-based pricing approach, you need two essential tools: farm inventory software and a reliable scale.
These tools will help you keep accurate inventory records, portion out orders, and ensure pricing accuracy.
Related read: Selling by Weight: The What, Why, and How
3. Understand Demand
Crafting a farm product pricing strategy isn’t a one-and-done task. Instead, it should be an ongoing process of learning about your customers and experimenting with different prices and promotions.
For example, let’s say your farm inventory software’s reporting feature reveals a spike in ground beef sales but a dip in steak sales. This should alert you to a change in your customers’ wants and needs and prompt you to adjust your pricing strategy.
Whether your customers are cooking with more ground meats or the price of traditionally cut steaks puts them off, there are a few different ways to respond to this shift in demand, including:
- Increasing steak turnover: If you’re concerned that falling demand for steaks will eventually lead to spoilage, you might offer a discount to encourage steak purchases.
- Capitalizing on ground beef demand: While it might sound counterintuitive, you could also run a promotion on ground beef to make the most of the rising demand and show customers that you understand their wants and needs.
- Encouraging diverse purchases: Entice customers to purchase ground beef and steaks by offering a bundle discount when they buy multiple cuts of meat from your farm.
We suggest experimenting with all of these farm product pricing strategies as you get to know your customers and learn which promotions appeal most to them.
4. Offer Subscription Pricing
Subscription boxes are trending in the farm to fork world — and they’re a smart farm product pricing move.
When customers order from your farm store, give them the option to “subscribe and save.” They’ll receive a flat discount (usually between 5 and 15%) and enjoy recurring deliveries of farm-fresh products straight to their door.
In return, you’ll receive a steady flow of revenue from satisfied, loyal customers — an essential ingredient for farm profitability.
Offering farm subscription boxes is easy with the right farm e-commerce platform. Simply choose one that makes it easy to offer subscriptions and manage recurring deliveries.
Take a Fresh Approach to Farm Pricing With GrazeCart
Ready to harvest higher profits? Then you need powerful software to help you put these farm pricing tips into action.
GrazeCart is an all-in-one software solution designed to help you attract more customers, sell more farm-fresh products, and grow your revenue. With GrazeCart, you can build an online store for your farm, list products for sale by weight, manage inventory in real time, track and fulfill orders, and build relationships with your customers.
See GrazeCart in action by launching your free, two-week trial today.