The original purpose of farmers markets was to connect consumers with agriculture, providing a source of fresh and local foods. That remains the same today with an added twist.
With the addition of processed and prepared food vendors, artisans and entertainment, they have become more than just a place to buy fresh produce. Market managers and vendors have seen the benefits of this evolution as markets continue to grow, generating higher sales and profits.
Markets across the country became even more consumer-friendly when they began offering customers the convenience of paying for purchases via the Electronic Benefit Transfer (EBT) system that accepts food share benefits and credit cards.
Carol Reed, a former UW Extension agriculture educators’ assistant, has seen it all over the past 16 years as manager of the Wisconsin Burlington Farmers Market. Her presentation at this year’s Wisconsin Fresh Fruit & Vegetable Conference included tips for selecting the best farmers market for your operation.
“There are different types of markets,” she began, referring to traditional producer markets and combination producer/resale formats. She pointed out how the resale model can expand the product mix offered and is especially helpful in smaller communities with access to fewer vendors. Resale vendors might bring in items they did not produce themselves, such as produce out of season, for example.
“Some markets have decided to allow a percentage of product sold to be resale,” she said, “usually about 20%.” It can be a balancing act for market boards as they continue try to provide the best selection for consumers while staying true to their market guidelines.
Choosing the Right Market
“All markets are not for every vendor,” Reed emphasized. “Check out the market you are going to attend and meet with the market manager.” She encouraged shopping the market and talking to both customers and vendors. Take note of the market’s demographics while there.
Reed suggested a few additional considerations to include in your decision-making process. Does the market’s pricing fit in with what you need to charge for your product? Is there adequate parking for customers and/or public transportation available? When it comes to product mix, does the market offer high quality along with unique products? Are there special events scheduled to generate higher market attendance? How is the market promoted?
A good example is how her Wisconsin market connects with the public through their website and social media, offering direct links to vendor websites. Vendors are also encouraged to update their own online media and feature what they are offering at market that week. While season vendors attend May through October, additional weekly vendors are added throughout the growing season. A detailed map is published on Facebook each week, showing the locations of all attending vendors.
Even with all of their current promotion efforts, however, she added, “Word of mouth is still the very best advertising there is.”
Pricing for Profit
How do you set pricing for your product? University of Wisconsin Department of Agriculture and Applied Economics Professor Paul Mitchell spoke about determining what to charge at farmers market and direct farm sales. Director of the UW Renk Agribusiness Institute, one of his areas of research includes the economics of crop production.
“You might both be vegetable farmers with eight acres selling at the same farmers market and doing a lot of the same vegetables,” he said, “but your cost of production will most likely be different.” Variable expenses like crop inputs and labor often make the difference. Labor expenses continue to rise and labor shortages add to the problem.
Veggie Compass is an online farm management tool for diversified fresh market vegetable growers. Created at the Center for Integrated Agricultural Systems, UW-Madison, the program helps growers better define their cost of goods sold and apply them to individual items they sell. The toolkit with free downloadable spreadsheets helps farmers actively manage and understand individual product costs, identifying break-even points. Farmers can then make decisions to adjust pricing, reduce their costs, drop less profitable categories and expand production of those that are more profitable.
Mitchell explained how data are incorporated into the program. Just like tax preparation, time needs to be set aside for gathering and entering your crop information. “The key about it is that it makes it easy-‘er’, not easy,” he emphasized.
Future toolkits are in development for fruit and nut growers. More information on this farm management tool for fresh market vegetable growers can be found at veggiecompass.com.
by Gail March Yerke