The CSA can be a slippery slope in terms of marketing. The goal is for the farmer to earn a season’s worth of money upfront before he or she has to purchase seeds, equipment, and the like. In order to do that, however, farmers often entice patrons through discounts and giveaways. But if these incentives are not covering the labor involved in growing the food, then it quickly become a less sustainable marketing approach.
That said, I still believe the CSA can be a viable and important marketing model, but it comes down to design and execution, especially of the pricing. You need to effectively price your CSA so you can continue to feed your customers without breaking the bank.
Set Your Personal Budget
I wouldn’t mention budget in nearly every one of my articles if I didn’t think it was vital to farming. Indeed, if you don’t know how much money you need to make, how can you know if you are making a living? Sit down and take a day to figure out all of your expenses in a year, including general bills but also personal expenses, salary, savings and emergency funds. The final number will be your budget. This is the minimum amount of money you need to make to support your farm and family.
Employ The CSA
It helps me to think of different market outlets as employees. By that I mean, decide how much of your budget you want the CSA to be responsible for. Some farmers do all their business through a CSA, but others use it for a third to half of their income. I think having a balance of markets is a smart idea. Making part of your sales through a CSA, part through a farmers market, and the remaining portion from a restaurant or retail is healthy. That way, your eggs—literal or proverbial—are not all in one basket. Of course, if the CSA isn’t effectively meeting your income demands, it may be time, like with any employee, to reevaluate the position.
Determine A Price
Now that you know how much money the CSA needs to make, start playing with numbers. If, say, you want the CSA to gross $20,000, see what it would look like with 40 members. This particular situation would mean that each share would be $500. That’s $25 per week for 20 weeks; about $22.75 per week for 22 weeks; et cetera. Obviously, it can be broken up, doubled, cut in half or whatever you need to meet your budget and production potential.
Does 40 baskets at that price sound like something you could manage? Great. If that’s too many shares, recalculate with less. Assigning an arbitrary price to the CSA is a great way to fail your budget, so really think about it. If you’ve done this math and feel like you could serve more CSA members, allow the CSA to be responsible for a larger swath of your budget and recalculate.
Early-Bird Discounts
The CSA can sometimes be a hard sell without incentives, especially for new farms. Any discounts you give should be figured into the budget. In the above situation, it would be worth advertising a discount for early-paying members, so long as you account for it and add one or two more spots to ensure you make your budget. Don’t just take the loss to get the early money. Make the money you need to make. But also, don’t take on an extra 20 members to make that money. The goal should always be to work sane hours and make a living. This may take a few years of trial and error, but be diligent and always consider your budget.
Execution
Finally, ensure you’re able to provide the right the amount of food in each share for the price you’re asking. Giving too much in each box will not only cost you time and money, but we’ve found that heavy-handed boxes will actually drive away customers who want to limit waste. On the flip side, giving too little will drive customers away who are not getting enough. You must strike a balance, but pricing your CSA accurately is the best way for both the CSA member and farmer to get out of it what they expect and need.
