Location, Location, Location: Setting Your Small Farm Up for Market Success

Last August, I shared some thoughts on why small farms sometimes struggle, and among the factors I listed, "limited access to markets" really stood out. It's a common hurdle: small farms often find it tough to reach customers, whether due to remote locations or a lack of resources for effective marketing. Today, I want to dig deeper into that first part – the challenge of reaching your eager customers.

Over time, as I witnessed small farms close their doors, a pattern emerged. Many farmers spoke of the inability to generate enough income to sustain their operations, even with off-farm jobs. A critical observation I made was that often, these farm locations were chosen out of emotional attachment rather than a practical understanding of how they'd integrate into a viable farm business. So, I want to share a methodology that aspiring farmers can use to strategically select their farm's location, with the ultimate goal of fostering a profitable farming enterprise.

The first step in this process is to clarify your farming aspirations. Do you envision yourself as a market gardener, cultivating vegetables, fruits, and nuts for sale? Or perhaps a livestock farmer, raising beef, pork, lamb, or goat? While this might seem like a straightforward question, your answer is foundational. It will directly influence where you choose to set up your farm. For instance, if you plan to be a market gardener, selecting hilly terrain with no flat areas for growing beds or high tunnels would be a clear misstep. Common sense, right?

But here's where many, including Beth and I in our early days, stumbled: how will you sell your product? When we first bought our farm, our vision was purely recreational – a family camping spot, a personal retreat. Over time, however, we recognized the potential for profit, initially considering a tree farm. We imagined planting fast-growing pines in our pastures, to be harvested in 20-25 years for our retirement. Our path ultimately shifted to the animal husbandry business, but thankfully, our initial location choice serendipitously proved to be excellent for our new direction. This highlights the importance of considering market access from the very beginning.

Let's explore the two primary avenues for selling your farm's bounty: wholesale and retail.

Wholesale Methods: Selling in Bulk

For market gardeners, wholesale often means farmers' auctions. You'd grow a substantial quantity of one or more items, harvest them at once, and transport them to the auction for sale. The same applies to livestock farmers: a cow-calf operation, for example, would raise calves to a certain point and then bring them to a livestock auction for sale.

Beyond auctions, both market gardeners and livestock farmers can also sell directly from the farm at wholesale prices, perhaps through a dedicated webpage. Another option is selling to an intermediary – a middleman who picks up your goods and offers a price. Selling directly to restaurants is also a wholesale avenue, though it often involves a bit more nuance, which we can explore in a future post. The key takeaway for wholesale is that your marketing efforts are generally minimal.

Retail Methods: Direct to Consumer

The most common retail channel for both market growers and livestock farmers is the farmers' market. A market gardener would produce a variety of items to sell weekly or seasonally at retail prices. A livestock farmer would raise animals (like beef calves or lambs), have them processed into cuts, and then sell directly to customers at the market.

Farm-direct sales and online sales can also operate on a retail model. The crucial distinction with retail, compared to wholesale, is the absolute necessity of marketing. This is a big topic, and one I'm already working on for our next post, but for now, remember: wholesale operations typically don't require extensive marketing, while retail absolutely does.

Location: Wholesale vs. Retail Considerations

Understanding your preferred sales method – wholesale or retail – is paramount when choosing your farm's location. A farm suited for wholesale selling will likely differ significantly from one geared towards retail.

If you're focused on wholesale, your primary task is to identify all the auction sites where you plan to sell your goods. From those locations, you can then establish a radius to determine the most financially advantageous area to purchase your farm. Generally, with wholesale auctions, you can afford to be further away, as trips might only be once, twice, or three times a year.

However, for retail settings, proximity to your market is far more critical. Take Columbus, Ohio, for example (refer to the map provided). I've shaded an area representing roughly a two-hour drive from the city center. In retail sales, I've found that driving much further than two hours weekly can significantly eat into your overhead – something I generally advise against.

Of course, geographical context matters. On a recent trip to California, visiting my son, I met a sheep farmer at a farmers' market who traveled four hours to get there. While I found this extreme, he explained that this particular market, located near Google's headquarters, was so lucrative that he'd sell out within the first two hours. For him, the travel was absolutely worth it. For me, living in Ohio, anything over two hours for weekly sales would be a considerable challenge.

With a map in hand, you can pinpoint your potential selling locations before buying your farm. For retail, it's not just about the distance to the farmers' market, but the quality of the market itself. Not all farmers' markets are created equal. Many I've attended simply didn't have the purchasing power to support my sales. Conversely, I found great success selling in Athens, Ohio, a more affluent area with a university presence. This is a vital lesson: farmers' markets often thrive near liberal arts universities. The whole food movement tends to resonate more with an educated, affluent demographic. While farmers' markets can certainly exist in less affluent areas, the challenge is that many everyday items can be purchased cheaper at a grocery store. Therefore, I would never consider buying a farm based on a farmers' market that didn't serve an affluent and educated population.

So, to summarize this crucial process:

1. Determine what you want to farm.
2. Decide how you're going to sell it.
3. Use these decisions to strategically choose your farm's location.

In an era where farm prices are soaring, it's more important than ever to make informed decisions – avoiding overpaying for your land and ensuring you're not too far from your market.

I truly hope this helps in your decision-making process as you consider where to buy and what to farm. If you have any questions, please feel free to leave them in the comment section below. In the next post, I'll delve into the marketing strategies we've employed for retail sales and the valuable lessons we've learned along the way. Have a great day!