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Unit 2: Marketing Opportunities and Strategies for Sustainable Farm/Ranch Businesses

Topic 6: Pricing Strategies

The Bishop farm has undergone constant transformation. Starting as a dairy and vegetable farm, the Bishop family planted its first fruit trees in 1909. As they expanded their orchard acreage, they sold more of the harvest to wholesale markets. The family also set up a seasonal roadside stand where customers paid for fruit on the honor system. The farm is situated along Interstate 95, at an exit only 15 miles from New Haven. With so many potential customers practically on their doorstep, the Bishops decided to establish a small retail outlet on the farm in the 1960s and shifted their sales efforts to market more directly to consumers – a decision they did not regret Today, to keep up with and stimulate demand, the Bishops have expanded their store four times. Now open year-round, the space encompasses 5,600 square feet and contains an in-house bakery. The market is stocked with an ever-widening variety of baked goods, produce, cider and other products that come from local farms and around the world. There is also an interactive computer kiosk where customers can place orders, seek nutritional information and recipes, sign up for customer loyalty rewards program and link to the farm’s website. Learn more at  Jonathan Bishop: New American Farmer profile and Bishop’s Orchards Farm Market and Winery

(Photo by Jackson's Orchard, CC BY 2.0)
In sustainable agriculture, pricing takes on a whole new meaning when compared with commodity production. Most sustainable farmers and ranchers are not thinking about forward contracts or futures prices. Instead, because they have something unique to offer, they might need to develop a pricing strategy that takes into account such concepts as:
  • prevailing market prices
  • competition
  • product quality and uniqueness
  • consumer tastes and preferences
The best place to begin when developing a pricing strategy is by calculating the break even price for products and services. If you can’t at least break-even on the product, it’s probably time to go back to the drawing board and begin brainstorming business alternatives.
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