Bringing the Retail Dollar Home- Increasing Profitability of Small Scale Meat Production Through Direct Marketing

2007 Annual Report for FNC06-611

Project Type: Farmer/Rancher
Funds awarded in 2006: $5,938.00
Projected End Date: 12/31/2008
Region: North Central
State: Illinois
Project Coordinator:
Beth Osmund
Cedar Valley Sustainable Farm

Bringing the Retail Dollar Home- Increasing Profitability of Small Scale Meat Production Through Direct Marketing

Summary

WORK PLAN
Action steps as detailed in grant proposal:
I. Research and develop market outlets and produce marketing materials for farmers’ markets and CSA box delivery.
II. Conduct marketing outreach meetings to promote CSA
III. Determine best configuration and prices for freezer-trailer storage and delivery equipment.
IV. Purchase and assemble storage and delivery equipment
V. Sell meat at farmers’ markets and deliver CSA shares.
A. Keep records tracking sales and profits
B. Compile documentation on consumer preference for cuts and pricing guidelines
VI. Produce written business guide, salesmanship and marketing DVD and presentation.
VII. Disseminate business guide and DVD to other farmers through presentations to local farmers, a CSA conference, and field days at our farm.

Action Step I – Research and develop market outlets and produce marketing materials for farmers’ markets and CSA box delivery:

In early January, we decided we would sell meat at two weekly markets (Logan Square Farmers Market in Chicago, IL and Ottawa Farmers Market in Ottawa, IL). These markets would also serve as delivery points for our Community Supported Agriculture (CSA) meat shares. Beth developed a monthly share of meat (beef, chicken, and pork) and eggs that would provide 12-15 meals for a family of four. We decided to price shares at $80/month with a minimum commitment of three months — collecting a total of $240 to start a share. Once we’d determined our share price, we developed a brochure that listed our offerings (freezer beef & pork, retail eggs, retail chickens and retail holiday turkeys). Brochure Document is attached. [Editor’s Note: To see a copy of the brochure, please contact NCR-SARE at ncrsare@umn.edu or 1-800-529-1342.]

Action Step II – Conduct marketing and outreach meetings to promote CSA.

Following is a list of marketing and outreach presentations that we conducted:

A. House Parties — in this format, friends, members and current customers of the farm opened their homes to us and invited their friends and acquaintances to meet us and learn more about our farm and products. We showed an animated DVD produced by the Sierra Club, The TRUE cost of food. This opened up the topic of sustainable farming practices and led into a discussion of our farm’s practices, philosophy and products. We conducted two House Parties.
B. Community Outreach Presentations — For the Community Outreach Presentation we began by showing The TRUE cost of food, then we presented a PowerPoint presentation about our philosophy and practices. The audience was engaged in a discussion of the presentations. Finally, we distributed brochures and made our sales pitch.

We presented Community outreach programs at libraries, civic group meetings, churches, an Earth Day program at the Midwest Museum of Natural History, and at Illinois Valley Community College.
C. Family Farmed Expo — In addition to marketing CSA shares at the Family Farmed Expo, we took meat for retail sale. We were able to test a market freezer cart which we borrowed from a neighboring farm that sells beef directly to the public at several Chicago farmers markets. The test was a success and we sold enough meat at retail to cover the cost of attending the conference.
D. Chicago Green Festival — Contacts we made at the Family Farmed Expo resulted in an invitation to exhibit at the Chicago Green Festival at McCormick Place. Both of these large events helped us introduce ourselves to many hundreds of potential members and we hope to secure partial scholarships once again in 2008 to defray their high costs. They will be even more important in the coming year as we expand the number of delivery sites for our meat CSA.

Action Step III — Determine best configuration and prices for freezer-trailer storage and delivery equipment:

Our experience using the borrowed freezer cart in March helped us decide on this as our freezer storage while at market. The freezer cart would allow us to transport and store our meat inventory for market sale without needing electrical hook ups or a generator (saving the cost of a generator and customizing the cargo trailer). The cold plate refrigeration (plugged in 24 hours ahead of loading) will keep frozen goods cold for up 18 hours – much longer than the length of our market day including travel time. Our research (considering price and reliability) led us to purchase from a Canadian manufacturer.

For additional freezer storage, we purchased two 25 cubic foot chest freezers. We solicited quotes from local vendors as well as from ABT in Glenview. ABT gave us the best price per cubic foot.

For transporting meat from the processors we determined we would need ten additional 100 quart max cold coolers. We priced similar coolers at local vendors, big box retailers and online vendors. The best price including shipping was with an E-Bay merchant.

To transport our market cart and farmers market materials to and from market we chose a 6’ by 16’ cargo trailer with ramp. We shopped at local dealers and on line for our cargo trailer. When travel and transport costs were considered, the local dealers were competitive. We chose to purchase from a local dealership with its own shop and service department. The cost was within $50 dollars of the other dealer that doesn’t service the trailers it sells.

Action Step IV — Purchase and assemble storage and delivery equipment:

We ordered our market cart to arrive in time for our first farmers market on May 19th. The market cart cost including shipping was $3,238.99
We purchased one chest freezer in May and another in July with the total cost of $1,015 including delivery.

The max cold coolers were purchased online through E-bay in June. They cost $54 each including shipping for a total of $540.
The cargo trailer was purchased in May with a total cost, including tax and licensing, of $3,480.

Action Step V — Sell meat at farmers’ markets and deliver CSA shares.
A. Keep records tracking sales and profits
B. Compile documentation on consumer preference for cuts and pricing guidelines:

A: We tracked sales (CSA, Farmers Market, on farm, & freezer meat) throughout 2007, and we are calculating net profit numbers.

Farmers Market Retail Sales – $22,270
CSA Meat Sales – $18,720
Freezer meat sales – ($6,460 M&M15 quarters + $1872 four beef quarters + $673 five sides of pork =) $8995
On farm sales – $600
Holiday Turkey Sales – $6284 (125 birds)

B: Attached is our retail pricing sheet – Beef liver and heart are the only cuts that we have accumulated inventory. We are exploring the marketing these to pet owners who make their own dog and cat food.

Action Step VI – Produce written business guide, salesmanship and marketing DVD and presentation.

We are working on a business/marketing guide document with a goal of having it ready for the Midwest Organic Production and Marketing Conference in Champaign, IL January 17 & 18, and have purchased a video camera for producing the salesmanship DVD.

Action Step VII – Disseminate business guide and DVD to other farmers through presentations to local farmers, a CSA conference, and field days at our farm.

OUTREACH
We have participated in two Farm Beginnings panels on production and marketing including our Meat CSA. We will be presenting at the 2008 Midwest Organic Production and Marketing Conference, and are scheduling other outreach activities and field days.

RESULTS
In conclusion, we have found retail meat sales to be a viable and rewarding enterprise for our farm. So much so, that in 2008 we will be focusing exclusively on meat production and sales.