Planning for your CSA


By Amanda Kimble-Evans

The following article is based on a 2011 CSA School session. The CSA School was a one-day workshop offered by Penn State Cooperative Extension exploring decisions Community Supported Agriculture (CSA) farmers need to address in establishing or growing their businesses.

Red Earth Farm (redearthfarm.org) is an all-choice CSA with 550 members run by Mike Ahlert and Charis Lindrooth. Why choice? Mike says when he pushed for launching a CSA program at his former employer, Covered Bridge Produce, the market manager put his foot down. “He said no because at the heart of it you’re forcing people to eat things they don’t normally,” Mike recalls.

When Mike and Charis started Red Earth on rented land nine years ago, they launched it as a CSA. They had 30 members and did two markets that first year. “We did enough to survive, but barely. I wasn’t working off the farm, so what we made was it,” says Mike. “The truth was, I was flying by the seat of my pants and taking some risk.”

But there were a few key decisions Mike believed made the difference between failure, survival and success.

Budgeting

Mike and Charis had $20,000 to spend on launching Red Earth Farm. They rented five acres with a house and outbuildings and purchased a tractor, plastic mulch layer, tiller, hand tools, irrigation equipment and seed.

“We spent every penny of that money and put some on credit card,” says Mike. “But I didn’t run up a lot of credit card bills and when we did rely on the, we paid them off almost immediately.”

Avoiding debt and paying cash for almost everything was a cornerstone of Mike’s approach to mitigating the other risks they were taking. And it was a trend he managed to maintain until 2006 when he purchased their current 14-acre (6-1/2 tillable) property.

Mike also admits he had a distinct advantage starting out. The two markets Red Earth planned to enter Mike had already sold at so he knew what to expect, and he had already run a CSA for his former employer.

“I had a good budget in my head,” says Mike. “I already knew how much I need to fill a box and how much I could charge for those boxes.”

Equipment

Equipment is always a huge budget item, but sorting out what is a “want” and what is a “need” is essential to keeping that budget in line. “I’ve worked with farmers who want the newest, fanciest gadget,” says Mike. “But you have to be sensible about what you invest in.”

Of course, there are a few necessities, and Mike says they’ve always invested in equipment that improves either the quality or efficiency of their operation. Equipment worth the investment for CSA growing? In general, any tools that make beds, control weeds or work ground.

Necessities for Red Earth include:

  • Plastic mulch layer
  • Water wheel transplanter
  • Refrigerated truck
    “We knew this would seriously increase the quality of our product,” says Mike. “It took a few years because it was a big investment, but we knew when we could, this was the purchase to make.”
  • Irrigation
    “I wouldn’t even try to be a CSA farmer without irrigation,” says Mike. “Maybe you could get away with it in a good year, but it is like insurance. Rain or not, if you have irrigation, you’re still farming.”

Employees

Small farmers are often reluctant to employ people. Just thinking about payroll, insurance, and the politics seems like more trouble than it is worth. But, CSAs are so labor intensive, it is hard to maintain without hiring at least some help. According to Mike, employees are really a long-term investment that has allowed Red Earth Farm to grow successfully and smoothly.

“I have a crew of 10 now and I’ve always had a crew,” says Mike. “They have been my most important and best investment. But a crew does require attention. Labor can make you money or it can waste you money if you don’t manage it properly.”

The cost of an employee is about the cost of a tractor, and, like a tractor, employees require maintenance. According to Mike, establishing clear expectations, having a system in place for the work load and keeping the lines of communication open are all essential to managing a team.

Plus, employees can often become your greatest assets. “Some of our employees are now managers,” says Mike. “And with two properties, we need managers!”

Pricing

How to price is often the new farmer’s biggest question. And when it comes to CSAs, there is very little guidance. Mike says he already had an idea of what people were willing to pay based upon the CSA work he did with his former employer. But, he says, other than seeing what other CSAs are charging in the area, the best way to establish a price point it is to work from what you know you can grow.

“Nail down the number of shares you want and what is attainable,” says Mike. “We do 50 shares an acre but that is really pushing it and that’s not growing winter squash. A reasonable expectation is about 25 shares per acre.”

Of course, Mike notes, how much land you need per share really depends on your production method. Farms with horses are structured on single rows whereas farms that rely on hand tools might do three to four rows per bed.

The key is to be specific with your goals. “If you can be really specific, it gives you a framework for planning your production,” says Mike. “That way you can structure your growth.”

Red Earth grew incrementally, according to Mike. They avoided asking customers to absorb huge price increases but did up the fee $10 or $15 each year to reflect cost (about a 5% increase annually).

“When the recession hit, we didn’t raise prices because we thought customers would appreciate it,” says Mike. Although he admits they might not have been able to afford to do that when they were just starting out, Mike believes it made the difference not only between losing or keeping customers that year, but went a long way toward creating customers who were in it for the long haul.

And happy customers are the very best asset CSA farmers have. “Membership is great advertising,” says Mike. “Word of mouth has allowed us to grow every year without outside advertising.”

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