Now that financial goals are set, crops selected, and seeds ordered, the next step is simple: follow through with the crop plan. After that, simply keep good records and analyze your crop profitability.
Crop Planning Step 8: Carry Out the Crop Plan
Do the work!
Crop Planning Step 9: Keep Records
As Allan Savory says in Holistic Management, the word “plan” is a 24-letter word: Plan—Monitor—Control—Replan.
Among the many things to monitor are the weather, crop growth, harvest and sales records, client data, and, if you’ve been growing for a while, historical data. Equipped with this information, you should also be prepared to control and remedy issues in the short term.
And finally, as part of control, you should be able to replan based on what transpired in the previous season to make sure you either stay where you are or improve business-wise.
After the season, set aside time to really get down and tear apart your business brick by brick and crunch the numbers. The time you spend analyzing and understanding your data is the most valuable time on your farm. You may discover that you can drop certain tasks and still generate the same revenue.
Crop Planning Step 10: Analyzing Crop Profitability
What determines a crop’s profitability? To really know the cost of production of an item, you’ll need to keep track of all the ways you’re generating revenue from that item and subtract all associated expenses, including labor. Income – expenses = profit.
Notable reading recommendations from Dan Briseboise include The Organic Farmer’s Business Handbook by Richard Wiswall and Fearless Farm Finances by Craig Chase and Paul Dietmann.
There are two benchmarks to determine whether a crop is profitable: space and time.
Profitability in space. This can be determined through a few calculations involving space sales target, yield, and profitability.
1. Set a space target: space target – gross sales ($) ÷ growing area (acres) = target ($) per acre. Here are some sample computations:
$22,000 ÷ 5/6 acres = $26,400/acre
$80,000 ÷ 2 acres = $40,000/acre
$80,000 5/6 acre = $65,000/acre
$80,000 1/4 acre = $320,000/acre
The main takeaway in having these computations is that your scale will dictate which crops will be profitable for you. For farms with larger acreage, succession planting can be completely forgone in favor of extensively farming select crops. On farms with less acreage, smooth succession planting is key.
2. Calculate yield. Computing for yield takes a look at how much you can realistically harvest from your plot of land to sell. Quantity harvested ÷ bed feet harvested = yield. For example, 476 lettuce heads 200 bed feet = 2.38 heads per bed foot.
3. Calculate profitability. This will put your target sales and what you want to grow into context. It shows how profitable your crops are per unit of land, which in this case is bed feet. The formula to compute for profitability is simple: yield (unit per bed foot) x sales price per unit = sales per bed foot. For example:
2.38 heads per bed foot x $2.00/head = $4.76 per bed foot
2.38 heads per bed foot x $2.50/head = $5.95 per bed foot
Yield is difficult to improve; this means that price has a bigger impact on your system. Getting the price right for your crops can really make a difference in terms of the profitability of your operation. For example:
5 heads per bed foot x $1.50/head = $7.50 per bed foot
5 heads per bed foot x $2.00/head = $10 per bed foot
5 heads per bed foot x $2.50/head = $12.50 per bed foot
Dan notes that the difference between having 2.38 heads and 5 heads of lettuce in the same length of bed foot is good weed control. You’ll need pretty good weed control right from the start for better yield.
Crops that are generally…
|Very profitable in space —|
can be cut and will regrow
|Profitable in space —|
small space, don’t regrow
|Less profitable in space||Beans and peas|
Profitability in time. Determining profitability in time is based on the assumption that during one full farm season, one person works for a total of 2,000 hours, where time spent on the farm is divided like this:
20% crop establishment
20% crop maintenance
20% harvest and post-harvest
20% administration and planning
It’s important to note that marketing is where 100 percent of your revenue comes from; it’s the only way you make money from your crop, but it uses 20 percent of your work time. Taking this assumption into consideration, let’s crunch the numbers for profitability.
1. Set time target: gross sales ($) harvest time (hr) = target $/hr
$22,000 800 harvest hours = $27.50/hr
$60,000 800 harvest hours = $75.00/hr
2. Calculate profitability: units harvested x $/unit harvest time (hr) = $/hr
54 carrot bunches x $2.50/bunch 3hrs = $45/hr
54 carrot bunches x $3.00/bunch 3hrs = $54/hr
54 carrot bunches x $2.50/bunch 2hrs = $67/hr
54 carrot bunches x $3.00/bunch 2hrs = $81/hr
The prices on the computations above are dependent on what the current market can bear, and the time spent on harvesting is dependent on the skill of the farmer.
Tips on improving harvest efficiency. The less time you spend harvesting, the more profitable your crops will be. Here are a few things Dan emphasizes to help bring down the time it takes to harvest.
a. Keep weeds under control
b. Come to the field prepared—bring all the tools you need to save time walking back and forth from the storerooms
c. Break harvest tasks into steps—one huge task is less daunting than several smaller tasks
d. Sharpen your harvest tools regularly—a sharp knife can harvest with one cut while a blunt knife might need several
Crops that are generally…
|Very profitable in time||Bunched herbs|
|Profitable in space—small space, don’t regrow||Bunched roots|
|Less profitable in space||Peas|
Crop budgets: income – expenses = profit. Crop budgets paint a picture of what you spend your time on and where you can improve. If you could eliminate every task except planting and harvesting, you’d be the most profitable. That’s the ideal and not necessarily reality, but it’s something to strive for.
Your crop budget can highlight what you’re spending too much time doing—you can’t improve your system if you can’t pinpoint what or where the problem is.
The best thing to do is to focus on the crops you’re making the most money on, or the crops you’re spending the most time on—hopefully, they’re the same crop!
Crop Planning Step 11: Plan for Next Year
After you’ve finished the season, following your crop plan, you’ll need to do everything from the top in preparation for next season. But as you do a second year of planning, you’ll have your first year to compare it with, which will help you make more educated decisions.
“Until you’ve gone through one crop planning cycle, everything’s still a rough draft,” Dan says. It takes a few years to arrive at something that works well, and the more experience you accumulate, the easier crop planning becomes.
We crop plan as farmers so that we can have a good quality of life. We need to make sure that we make a living wage for ourselves and for our workers. On top of that, crop planning also helps maintain and improve our agroecological systems.
Watch Dan’s presentation on Crop Planning for Organic Production.
You can learn more by checking out our podcast with grower Dan Brisebois.
You can also find all our market gardening podcasts at Farm Small, Farm Smart—the longest-running podcast on market gardening in the world.