Market-First Farming, Part II: Setting Your Prices

In part 1 of this series, I introduced the market-first concept of farming: getting into farming by first starting on the marketing end, then working your way back to the farm.

In part 2, we’re going to talk about the most important thing you’re going to do as an agribusiness entrepreneur: set and tune the price of your products.

If you go to your local farmers market and survey twenty of them, there’s a very good chance that not a single one will be able to tell you how much of that $4 for a pound of tomatoes is going toward paying that farmer to be at the farmers market. Most farmers don’t base their prices on the actual cost to produce and sell their products; they price them to be competitive with everyone else’s products. They’re selling chicken breast for $10/lb because that’s how much the guy three stalls down is selling theirs for. No judgment here; I’ve done it, too. When you’re running the fields and staffing the market and doing the bookkeeping and deliveries and pickups and doing everything you can to avoid burnout, it’s pretty hard to find the time to a.) collect the raw data needed to determine how much money you’re spending to market your products, and b.) analyze that data into something you can actually use.

The problem with imitating other farmers on price is pretty straightforward: most…