U.S. Department of Agriculture publishes current lists of wholesale prices.
these by 10 to 20 percent. To get more information about what's available, look in the phone book under United States Government listing and your state offices for the Agriculture Department, and call them. You may also want to call your local county Extension Service agent, who can be a big help.
You are going to run across some unfamiliar units of measurement. We backyard gardeners think of lettuce in terms of heads, and count things like carrots as individual items. But buyers in the food business think of vegetables in terms of flats, lugs, cases, and hundredweights. Some items are sold by the pound, while others are sold by a unit of volume such as a packing crate. The size of the item will determine how many fit into a crate. Therefore the price per head can change drastically, depending on how many fit into the crate. Be careful when you hear that lettuce is forty-nine cents a head. Those may be very tiny heads, packed twenty-four to a crate, while yours may be large enough to be packed twelve to a crate.
To further complicate the matter, terms are different across the country, so a flat or crate is not always the same. Learn them in your area.
The food business also has a complete vocabulary to describe the size and quality of produce. Quality in this case refers not to taste, but to looks. Sometimes they go by Grade A, B, or C, or Premium, Best, and Standard. Jot these terms down as you hear them, and don't be afraid to ask about unfamiliar ones, so you'll know how to compare your "perfect produce" with the trade standards. Keep in mind that yours may not always look as uniform as the commercial varieties, but it sure is going to taste better.
The rapid expansion of supermarket produce departments, coupled with the demand for perfect-looking fruits and vegetables, has pressured the American farmer into producing a vegetable that ships well and looks good. Unfortunately, taste has had to take a back seat. We have no one to blame but ourselves, as we customers want only the best-looking produce. We don't want blemishes or soft spots, so the outer surface has to be tough enough to withstand mechanical picking, rolling along conveyor belts, tumbling into containers, shipping cross-country, and being stored for long periods of time, all without dents or bruises.
Keep mentioning to your buyer how good your vegetables taste, how fresh they are. Just think, they will be in his restaurant cooler within an hour or two of harvest. Absolutely no one, not even the local farm stands, can offer that. If you need an extra sales pitch, talk up the fact that you have something unique and different, something no one else has.
By keeping a monthly list of supermarket, farm stand, and wholesale prices, you can take advantage of any out-of-season produce you have. The law of supply and demand still prevails in the marketplace. When every home gardener has tomatoes coming out of his ears, he won't buy them at the supermarket. Local farmers will also have plenty at this time, and what's the result? Prices drop. Conversely, at the beginning and end of each season, the supply is low. Since the demand is still there, prices go up. If you work to have a small harvest atthe beginning and end of each season (see chapter sixteen), that extra work will pay off with higher returns.
What if your buyer refuses to pay more than he does to the restaurant supply house? This is what you hoped toavoid, but all is not lost. First, ask for a copy of the supplier's current price list. If necessary, photocopy it and return the original. Then ask for a little time to think it over. This will give you a chance to find another customer before you decide to take less than farm stand prices.
Farm stand prices are usually 10 to 20 percent above supermarket prices. A good part of the country doesn't have farm stands anymore. Most people live in the suburbs, with little open space devoted to agriculture. So even if you live in the city, don't be confused when I mention farm stand prices. They are the slightly higher prices that people are willing to pay for farm-fresh produce. Most people assume that farm stand prices should be cheaper— after all, they grow the produce right there, and how much does it cost to pick it and put it on the counter? But unless thefarm stand is just a sideline for the family, you will find the owner charging whatever the market will bear. And you'll probably feel the same way when you start raising and delivering your own home-grown produce.
What if you can't find another restaurant to buy your produce at farm stand prices? What financial loss will you be taking if you go back to your original customer? Since the restaurant supply house buys wholesale and has to make a little profit, it is selling somewhere between wholesale and retail. Because of the high cost of delivery, stocking large quantities of everything available, and the expense of taking phone orders and delivering the next day, the restauranr houses usually charge between 10 and 20 percent below retail level. If farm stand prices are 10 to 20 percent above retail or supermarket prices, you wouldn't be losing out completely.
For example, at a retail $1 level, the farm stand would be $1.10 to $1.20 while the restaurant supply house would charge between eighty and ninety cents. So if you had to settle for the lower prices you would be getting an average of thirty cents less on a $1 item. Although that's a big difference, it's not as bad as running a wholesale business at the fifty-cent level.
So there's your choice. Sell at wholesale in large quantities at fifty cents; deliver at restaurant supply prices at eighty-five cents; sell at retail of $1, or try for the top dollar of farm-fresh at $1.10-$1.20. Assuming your costs to raise and deliver will vary from fifteen to twenty-five cents, here's a chart on your potential profit.
Keep in mind your main selling point is fresh, home-grown. You might even ask to look at what is being delivered so you can show how much fresher and better looking your harvest will be, and how much less waste there will be for the restaurant owner.
As a final argument, you might suggest to the owner or chef, "Let's try it at farm stand prices, and if, after a month or so, you don't feel you're getting full value, we can talk about some adjustments."
It's very much in your interest to start at the highest price possible.
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