Question about pricing produce

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procyon88
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Question about pricing produce

Post by procyon88 »

Forgive me but I'm a rookie to the farming game but I have a question about how you set prices for selling your produce. I'm growing mushrooms as a hobby and would like to sell to some of the local veggie shops/stands. As of now I'm just growing oysters but I have no idea what price I should sell them at? I'm growing whites and blues, not the common P. eryngii you see in all the stores. Is there a website of common market prices for produce? Thanks for your input.

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DocDoesFarming
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Question about pricing produce

Post by DocDoesFarming »

Zasso Nouka has loads of experiencing regarding this and will chip in with some sound advice I'm sure.
What we did though with our cucumbers was just price it about the same price as everyone else's stuff, also if in doubt ask the local sellers when they're restocking up their produce in the mornings or consult with the manager.
procyon88 wrote:
Thu Oct 22, 2020 12:46 pm
As of now I'm just growing oysters
That is pretty cool, how are you doing that?
Smoke me a kipper, I'll be back for breakfast.

Shizuman
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Question about pricing produce

Post by Shizuman »

Thats very cool! would love to try mushrooms one day! what are you using for a grow medium?
I make bread myself, I have been adding up ingredients and time for each product and setting my price that way, I haven't looked into mushrooms much but would it be doable to calculate it that way?
But as Doc says Zasso is the guru!

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Zasso Nouka
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Question about pricing produce

Post by Zasso Nouka »

A - Make up a spreadsheet and use that to record how much time you spend on each crop, that becomes the basis for your hourly rate (set that at whatever level you consider appropriate remuneration for your time). This first part is the most time consuming and tedious but once you done it the first time you can use it to estimate costs for similar crops.

B - Next you need to calculate the costs of your inputs, ie seed, fertiliser, maybe for mushrooms growing media and anything else you need. Also calculate harvesting and packaging time (again factoring in your hourly rate) and packaging materials

C - Next you need to record how much crop you can harvest from a particular space, I measure the length of a crop and at the end divide that by the number of metres so I have a per metre production value that can be applied to rows of differing length but you can use whatever volume or length you like.

You now have your costs (A + B) and you know how much produce you can make (C) so you can calculate a price that covers (A & B) and gives you some profit on top.

So a quick very simple example. You grow potatoes, you calculate you spend 8 hours in total planting, caring for, harvesting a packing your spuds and you feel 1000円 an hour is a fair rate. Fertiliser cost you 2,000円 and bags and other packing materials were 100円 and you harvested 10kg of spuds which you will sell in 1kg bags so your total costs to produce and pack those 10 kilos is 10,100円 divided by 10 bags is 1010円 a bag cost to you.

Now you have to decide what profit you want to make, don't just cover your costs. I'd suggest around 30 - 40% is reasonable but set it at whatever level you like.

I've seen many young farmers start up and then give up after a couple of years because they are broke. Expect as a small scale producer your costs are going to be higher than a large scale producer. Also retired or small hobby growers often unknowingly subsidise their sales from their pension or other income. I'll give you an example, one of the michi no eki we used to sell at became dominated by retirees and hobby farmers and they started selling at ridiculously low prices (50円 for packs of komatsuna and spinach). That was about half the price in supermarkets, eventually all the full time farmers left as they couldn't sell their produce or compete against those prices.

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Zasso Nouka
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Question about pricing produce

Post by Zasso Nouka »

Some things I wanted to add.

When comparing your prices to others bear in mind that if someone is in JA and a registered farmer there are many grants they can receive depending on the city and prefecture that you may not be aware of. Nagano lettuce farmers in certain areas receive massive grants to keep them on the land, so much so that they basically only have to work 6 months of the year, lettuce doesn't grow well under snow. Some other areas will subsidise their farmers just for cultivating certain crops and in the right area the subsidy makes up to half their income, these regions do this so they don't loose population to other areas.

Also some farmers seem to think living the life of a poor peasant is somehow honest, admirable or more virtuous. You see this very often in the 'organic movement' with folk barely able to scrape a living together or living off their retired parents and having family work for free around the farm and paying for most of the day to day living costs from their pension. I know of several farmers living like this and once their parents can no longer help out or pass on and no longer have that pension coming in they won't be able to make ends meet, then what ?