Analyzing Crop Profitability And Financial Metrics On Flower Farms: Phase 2

View the project report

Commodities

• Additional Plants: ornamentals

Practices

• Crop Production: cropping systems
• Farm Business Management: budgets/cost and returns, business planning

The domestic cut flower industry is growing, yet we lack key financial and profitability metrics. With few references of profitability to aspire to, new flower farmers have no sense of potential yield for individual crops, or sales and net margin goals.. Without this information, flower farmers are making business decisions based on trends and market pull, rather than knowledge of the profitability of their production and marketing systems. 

This project will expand and improve upon my work done in 2022 as a F+R grant to address these problems. Through this proposed Phase 2 as a P+P grant, I’ll work with a cohort of 12 established sustainable flower farms over two years to 1) track cost of production per crop, and 2) compile and analyze key financial metrics. These farmers will learn to make smart decisions for their businesses by identifying their more profitable crops, and will be able to compare their larger financial pictures to that of the other farmers in the study. 

We will produce subsequent case studies and benchmarks and share them widely via conference sessions, journal articles, and a webinar, with the goal of encouraging cost of production studies as well as financial literacy and goal-setting on more farms. We hope that flower farmers at large will be better equipped to undertake sound production and financial planning, and build sustainable farms that improve their quality of life. This will allow the sustainable cut flower industry to strengthen and grow.

Part 1: Support a cohort of 12 flower farmers in a two-year cost analysis project, for three distinct flower crops per farm, using the Know Your Cost To Grow (KYCTG) program (developed by Oregon State University’s Center for Small Farms and Community Food Systems in partnership with Oregon Tilth). Through the process, train the farms to analyze their data and chart pathways to financial sustainability based on refinement of studied production processes and crop choices. This helps farms to prioritize the goals of sound ecological stewardship, quality of life for both the farm owners and their employees, and positive contributions to their local agricultural communities. This will build on the work I began in my 2022 F&R grant, and implement improvements I’ve found through conducting this year’s research as we worked to tailor the KYCTG program - originally created for vegetable farmers -  to flower farmers. 

Part 2: Create a financial benchmarking survey for small cut flower farms (1 - 8 acres), focusing on key metrics such as gross sales per acre, labor hours per acre, and overall net profit, and guide the 12 farms participating in the grant through filling out the survey using their financial records. This will build on the benchmarking we began in the 2022 F&R grant, but will be more extensive and complex. To this end, John Hendrickson from UWISC will act as technical advisor in the construction of the survey and in ensuing reports. The results will help to build a body of knowledge for cut flower farmers on what is attainable from a financial standpoint, which will help to strengthen and grow the domestic, sustainable and regenerative flower farm industry. 

Part 3: Use the results from parts 1 & 2 to compile a research report for both crop costs of production and whole farm financial metrics. These will serve as the basis for the educational materials.