I think I have to make an unpleasant choice. It is a choice that I don’t want to have to make. It is a choice that I think it is unfair that I feel the need to make. I need to choose between feeding certified organic grain and conventional grain. I need to make this choice because I do not see how it is possible for me to become a full-time farmer as long as I am feeding organic grain. I feel that as long as I am feeding organic grain, my prices will be too high to sell enough at a high enough profit to ever have an income high enough to permit me to quit my off-farm job.
At the farmers market this past season, I estimate that eight out of ten people that were interested enough to stop and look at my price sheet walked away because of my prices. One out of ten of those actually scoffed at the prices under their breath. Only about two out of ten, twenty percent, of people at the market were willing and able to pay organic prices.
In my conversations with potential customers, it was clear that very few of them cared about organic feed. They cared about the humaneness of how the animals were raised, and they cared about hormones and antibiotics.
If I had lower prices and captured just half of the eight out of ten that I lost, my sales would triple.
My friends at the vegetable farm sell my eggs for me. They retail at $4.50 per dozen, which is what I sell them for at the farmers market. Their on-farm store is very busy. On average, five dozen of my eggs sell per week. Five dozen. They offer eggs from free-range hens fed conventional grain from two different farms. One sells about forty dozen per week at $2.75 per dozen. The other sells between twenty and thirty dozen per week at $3.00 per dozen. If I were one of those conventional farms, my egg sales would increase by six times.
Furthermore, I have spoken to a number of stores in the immediate area, including my friends at the vegetable farm, about carrying my pork. None of them think they would sell enough at the prices they would have to charge to make it worthwhile. So far the only store that is willing and able to pay organic prices is the one store over in Albany. If my prices were lower, I could probably sell two to three pigs per month at stores within fifteen miles of my farm.
Volume is not the only consideration, however. Profit margin is the other. Currently, I am working my ass off just to break even, and this year I am not even going to break even, and that is without any of the major capital investments usually necessary when starting up a business. I am just breaking even because even when I can find someone willing and able to pay organic prices the organic prices that I am able to set are not high enough to provide a reasonable profit.
My feed costs are two to three times as high as a farmer feeding conventional grain. Yet my prices are only thirty to fifty percent higher. For example, a neighbor pays $330/ton for broiler mash. I pay $900/ton. He charges $3.50/lb for whole chickens. I charge $4.50/lb. That same neighbor pays about $275/ton for layer mash. I pay $750/ton. He charges $3.00 per dozen. I charge $4.50. I have a price sheet from a farm that attends the busiest market in the region. Not only does he feed his pigs conventional grain, but they are raised indoors. Yet his prices are only 40% lower than mine. And, amazingly, he charges $0.25 more per pound for a whole pig than I do!
If I am able to break even, or come close to it, with my current organic costs and prices, then those conventional farms are making a profit, a real, sustainable, potentially full-time profit.
So, what are my choices?
1) I could continue feeding organic feed and hope that within a few years I can cultivate a large enough market willing and able to pay prices that provide a sustainable full-time profit.
2) I could switch from organic feed to a locally grown non-GMO feed that would enable me to lower my prices, thereby substantially increasing both my sales volume and profitability.
3) I could run a mixed farm. I could raise 80% of the animals on conventional feed and 20% of them on organic feed. Making this work would require that I have the complete trust and confidence of my customers, and it would preclude ever becoming certified organic. It would cause stress and headaches that I can only imagine.
4) I could stop raising animals that require grain. I could give up pigs, chickens, and turkeys, and only raise grassfed beef, lamb, goat, and geese. (I could just give up chickens and turkeys and continue raising pigs, but find ways to eliminate or substantially reduce the amount of purchased grain I feed them. However, in this area, none of the by-products that I would need to use in order to do this like whey, cheese trim, out of date dairy, or brewers grain are organic, so making this choice would be the same as choosing to abandon organic)
Which choice will I make? Which choice should I make? Which choice can I make?
November 19, 2008 at 8:38 am
Wow. I wish you were at my farmers’ market.
Maybe you need to access new (distant) markets with less price sensitivity. I am in the Triangle region of NC, and we have great consumers here with good disposable income and little price sensitivity. Granted, there are costs associated, e.g., sharing the profits with distributors, the actual cost of distribution, etc. Just a thought.
The other thing is to educate your consumers. In your case, educate about the true costs of conventional meat (read Michael Pollan), and encourage them to eat less of it, but better. We have done that selling our premium coffee.
Good luck, I hope you can figure out a way to make it work organically.
http://www.muddydogcoffee.com
November 19, 2008 at 2:24 pm
You should switch to the locally grown, non-gmo feed. The beautiful thing about direct marketing (and a short supply chain) is the fact that you can get people’s attention long enough to explain something more complex than “certified organic.” People care about price, especially in this day and age. I think it’s more important to produce a reasonably pure product that’s a good value than an absolutely pure product that nobody can afford. We live in a transitional time, and we need transitional foods. And you don’t have to think of it as an unpleasant choice: you can think of it as part of the existential freedom that you’ve earned by taking the step of working for yourself.
November 19, 2008 at 6:35 pm
We were faced with this same question and decided that we didn’t need to bother with organic certification. We are Certified Naturally Grown (CNG) instead which has basically the same, based on the USDA Organic standards, but with some additions for humane animal handling. CNG is better than Organic and we explain that to consumers as well as providing them the link to the CNG web site (http://NaturallyGrown.org) where they can read about the program themselves.
Ironically, most of our feed does qualify rationally as organic: pasture, hay and Organic dairy. We don’t use pesticides, herbicides, etc, etc because that is how I want to farm. I have to live here, raise my children and eat this food. But the USDA Organic standards are so poorly written that if we feed Organic whey to our pigs then we can not be Certified Organic. Pretty bizarre but that’s government for you.
Another thing to do to cut downon the feed bill is to grow a lot of things yourself. We produce a lot of veggies organically on our farm. This solves a lot of problems and gives you advantages of vertical integration.
Consumers know that Organic has been scammed by Big Ag. Instead of depending on Big ‘O’ certification, explain how you raise your pigs and why you do what you do. We have brochures, posters and product labels that make all this clear to the consumer.
By the way, our prices for our Certified Naturally Grown Pastured Pork are almost the same as your prices. We’re slightly less for whole pigs and slightly more for half pigs. You can sell at the prices you have. One of the things we learned was to divide our market in to high end A stores & restaurants vs the B and C’s. The A’s care about the higher quality and want the more special cuts of meat like loin, tenderloin, butt, bacon, smoked ham, etc. They’re willing to pay the price and get served first. We also make hot dogs, ground, kielbasa and such that go to both the A’s and the B’s. B’s tend to also buy ribs in season. We don’t serve C’s because they sell purely on price. I don’t compete with Smithfield and Tyson. The big boys like them are all to good at losing money and I have no intention of imitating them.
Cheers,
-Walter
Sugar Mountain Farm
in the mountains of Vermont
http://SugarMtnFarm.com/blog/
http://HollyGraphicArt.com/
http://NoNAIS.org
November 20, 2008 at 5:16 am
Bob:
You said: “In my conversations with potential customers, it was clear that very few of them cared about organic feed. They cared about the humaneness of how the animals were raised, and they cared about hormones and antibiotics.”
Nail on the head. I think this is the reality of the current market and the only model that is currently within reach of a reasonable cross-section of the public. Sure, there are locations where you could get away with the full organic model, but that’s just not the Capital Region and you’ve already mentioned you’d rather not sell in NYC.
Personally, I’d love to be able to afford healthier, tastier meat; I’m less concerned about the entire organic chain. Should I be? Maybe. Probably. But, I’m also forced to look at price and what will fit within my budget. I AM willing to spend more on quality food, but I’ve got to draw the line somewhere.
Based on your current model, you cannot even begin to reach the general public. Instead, you’re forced to sell to a small, rather narrow demographic. Is that a problem? Well, it allows you to stay truer to your farming philosophy/principles, but what’s the point? Sure, you’re doing the right thing, but it seems to me without reaching a broader cross-section of the community there really isn’t much hope for changing our currently unsustainable agriculture model. Doesn’t this movement need to serve more–and be more–than a niche market? What would it take to begin reaching the general public? What concessions have to be made?
November 20, 2008 at 6:01 am
Thank you all for your comments. I have followed up on them in a new post.
(Walter, for some reason your comment was marked as spam, which is why it didn’t show up right away)
November 22, 2008 at 4:23 pm
Ah, probably because I provided links. My NoNAIS.org blog also uses wordpress, which you use for your blog, and one of the settings is to consider high link comments as spam.
December 9, 2009 at 11:58 am
I love Joel Salatin’s quote “You think Organic food is expensive, have you priced out cancer lately?”
Walter, with all due respect. CNG is not the same as Organic. I know because we have been involved with both CNG and Certified Organic. We are now a certified Organic farm.
Too bad you felt you had to make that choice. You are feeding your pigs a feed that has pesticide residue that is proven to be harmful to your customers health. Did you know that Monsanto recently successfully lobied your government to more than double the allowable pesticide residues in human grade food? This was so that they could market their round-up ready grains. Did you know that the grains you purchase are dessicated with pesticides immediately prior to being harvested so that they are uniformly dry to speed up the combines? Most people don’t.
Your solution is a difficult one…I can empathize with you. My choice is always to market harder and find better customers who understand that good food is worth paying for.
Good luck to you and yours! Happy Holidays.
December 23, 2009 at 12:27 pm
I would elan towards #2 solution, but also #4.
http://dailyhike.wordpress.com/