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Important Considerations Coming

written by

Ben Simmons

posted on

October 28, 2021

Transparency! Defined by Webster as free from pretense or deceit. I like it to being open, honest, and truthful.

That's what today's newsletter is about. So, here goes.

As a seller, we do not like price increases. Simply put, I am not farming to make a lot of money. But, you have to make money to stay in business.

Our costs have increased and will probably continue to increase. My professional experience (8 to 5 job pre-farming) was Global Sourcing Director and was a Certified Purchasing Manager - kinda like a CPA!

So, the first thing I look at is cost of business and what can be done there to improve the businesses bottom line.

A "GLARING" expense to our farm is credit card fees. When I have mentioned this to folks they seem surprised that we are charged a fee for them to use their credit card. Well, last year it cost us more than $6000. And as of last week the report says we are 22% ahead of last year in fee charges.

So, what to do? Raise product prices to include the CC fee - but then that negatively impacts customers who pay by cash or check. Many companies I do business with are charging back the cardholder the fee for their convenience to use the card.

I have also looked at product prices as compared to other farms selling similar products. I was surprised how much LOWER our prices are. Here are some examples:

Whole chicken- we have our chicken priced at $4.15/lb. Two farms that I sell feed to are priced at $5/lb. My friend (MCM) in Sylacauga sells wholes for $5.75/lb. and his chicken breast are $15/lb. The average price of all reporting farms in North Carolina last month was $5.78/lb. for whole chicken and $14.28 for breast.

Eggs- we sell a dozen large eggs for $4. MCM sells the same egg for $7. The average in NC was $5.87. A friend in Foley sells his for $5.

Bacon- we sell for $9.57/lb. MCM sells for $15 and the average in NC is $12.13.

Beef- we sell boneless ribeyes for $14/lb. MCM price is $25/lb. The average in NC is $18.87. Surprisingly, cuts like flank, skirt, and hanger are priced between $13 to $14.80/lb vs. NGF price of $7.50.

Those are a few examples. As I review the better prices from other farms we are 20% plus lower.

I do know that to stay in business requires you to make money and be able to pay a living wage to folks that help you, And what we do is important for the families that depend on our products. I am confident this will be even more true in the coming months and years.

Lastly, some big ticket needs the farm has are: 1) our cow herd needs to increase to effectively utilize our pastures and supply beef for sales 2) I would like to add a herd of sheep and goats that would not only provide a source of revenue, but also help clean our pastures of stuff the cows don't eat.

Again, as sellers, we do not like price increases. However, our cost are rising and we have no choice if we want to continue serving our customers needs.

Thanks for listening.

As always, we thank you for rewarding our hard work with your trust and support.

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