Kentucky Ag News
Pricing products for farmers' market sales
University of Kentucky College of Agriculture, Food and Environment
LEXINGTON, Ky. - Pricing products for your farmers’ market booth can be a challenging part of selling directly to customers. So, where do you begin?
The Center for Crop Diversification has been compiling price reports for farmers markets and produce auctions around Kentucky since 2005. Our goal in sharing price reports with the public is to help farmers learn about prices that are being charged at farmers’ markets or produce auctions for common products in order to better understand how to set prices that support profitability of their farm and, at the same time, are fair to consumers.
Price and sales information is helpful to producers who are selling through markets such as farmers’ markets, produce auctions, and terminal markets. Farmers’ market prices are collected on a weekly basis, and these reports are published as a service to the farming community to expose producers to the range of prices that are being paid for the products they grow. Producers tell us that it’s helpful to see a range of prices that other producers are selling products for across the Commonwealth.
Dedicated volunteers provide price reports from several markets across Kentucky, and then those reports are aggregated into a weekly report. The weekly report showcases the common crops that are in season across the Commonwealth, so producers can continually find this information useful. These reports are very useful for new producers who are starting to market their products through various channels. But still, how do you start pricing your products? Here are a few tips to get you started:
- Keep track of your production costs and calculate how much you need to make from that item.
- Think about seasonality – is this crop a little early or later than usual? Are you the only vendor with that crop this week? You can often command a more premium price if you are the only one selling a particular crop.
- We do notice average price differences, sometime significant, between rural and urban markets. Not every vendor has a choice of where to sell, but in some cases, prices may justify a longer trip to market. Prices tend to reflect both the market demand in a particular community and also the available supply to the market.
- Use price reports that are available to you. Kentucky has Farmers’ Market Price Reports available at www.uky.edu/Ag/CCD/price.html. The USDA’s Agricultural Market Service also provides price lists for specialty crops on a wholesale basis. These reports can be found at www.marketnews.usda.gov/mnp/fv-home. Also, for organic growers, the Rodale Institute provides organic price reports (again, mostly wholesale) at http://rodaleinstitute.org/farm/organic-price-report/.
- Finally, talk with the other farmers at your farmers’ market. Try to avoid excessive price gaps between vendors; this will help you and the other farmers work together to understand how much to charge for items.
This article was written by Miranda Hileman Combs, agriculture economist at the University of Kentucky College of Agriculture, Food and Environment. The article first appeared in the April 27 edition of Economic and Policy Update.