Farmers Often Undercharge at Markets – New Data Could Help Set Better Prices

By Catherine Wheeler. St. Lawrence Valley Reporter. NCPR.

The Potsdam Farmers Market is bustling on Saturday mornings.

Farmers staff their booths on the edges of Ives Park. They're stacked with vibrant greens, colorful peppers and juicy tomatoes. Each item has been painstakingly grown, by hard labor, against the odds of weather, pests and disease. Farmers then have to put a price on that work that consumers will pay.

Greg Hargrave owns Brandy View Farms near Madrid and sells vegetables. He said he looks at a couple of sources when he’s setting prices.

"Usually, I talk to the other vendors. I almost hate to say it, but I'll go to Walmart and see what their prices are, too. I do have to be competitive on things. But I'd like to think we have a better quality product than Walmart or whatever," he said.

It’s taken years to figure out, Hargrave said.

"It's been bumpy. No doubt about it. A lot of the stuff is really labor-intensive. And it's tough trying to figure everything out [and] striking that balance, I guess," he said.

Farmers weigh a lot of factors into their prices: what it costs to produce the item, the time and energy it takes to run a market booth, making a living, and competition with grocery stores and other farmers.

Matt LeRoux, a Cornell Extension associate, said that often leads farmers to undercharge for their goods.

"Farmers think about buying groceries for their own household. So they can be nervous about setting the prices up where they really need to be," he said.

LeRoux and other researchers are now creating weekly pricing reports based on how much fruit, vegetables, meat and dairy are selling for at farmers markets around the state. These reports are the first of their kind in New York, LeRoux said.

"The goal with all these price reports is to serve as a reference point for farmers who might be struggling with price setting," he said. "[It's] seeing what's going on out in the marketplace, seeing what the prices stores are seeing, what's happening at other farmers markets in the state and using that to inform pricing."

LeRoux said the team uses data from the point-of-sales system Square. Farmers don’t have to send data in weekly. The researchers connect to farmers’ accounts and create weighted average prices for each item sold, like broccoli, apples or ground beef. They don't see customers' personal information.

"It's only based on units that are actually sold," LeRoux said. "There's a weighted average price, which tends to skew towards the volume of sales at a given price, so it's a more accurate reflection of what's going on in the marketplace."

The pricing reports are then posted on an online public dashboard.

Farmers aren’t typically making the bulk of their money at farmers markets, LeRoux said. That usually comes from selling wholesale to local businesses or CSA programs.

While the markets take a lot of time and work, they are good for community connections. Better pricing could make them more financially beneficial for the farmers, LeRoux said.

"Farmers markets offer additional value that isn't measured, like getting customer feedback," he said. "Customers tell you, 'I don't like my eggplants this is big.' That's a valuable lesson for direct consumer marketing."

Farmers say this could be a useful tool.

Morgan Leeson, a certified organic farmer, sells produce at the Gouverneur and Potsdam farmers markets. She said she’s cobbled together her pricing from online research and talking with other vendors in the region.

"I think that would be really good to have a central place like that to look at," she said. "This year I've changed a lot of my prices because I found out I was actually undercharging. For example, I was selling a really big bunch of radishes, and talked to another farmer near me, his bunches were smaller, but he was charging twice as much. And I was like, 'Oh, oops. I've been not charging enough.'"

Leeson has only been selling at markets for a few years, so she said the reports are a valuable insight into what more experienced farmers are doing.

LeRoux said they have farmers from Long Island to Buffalo who are contributing to the program. But they’re still looking for more.

"Our goal is to recruit so many farms that we can start to break the reports up by region. Right now, we're just doing a single New York State report because we need more farms," he said.

LeRoux said that could help with differentiating prices between rural places, like the North Country and New York’s urban hubs.

He said when farmers participate, they’re paid $25 for each week they generate reports. LeRoux said some farmers have made around $500 since June, another way to generate some income.