The Farm Business
Finances
Expenses
The nature of a farming operation means that many expenses are capital purchases, as described under Infrastructure and Equipment. Other expenses that Adam and Laura have incurred since start-up include seeds and fertilizer; equipment fuel, repair, and maintenance; land rental or mortgage payments, interest, and property taxes; advertising, marketing, and continuing education costs; employee wages; insurance; utilities; and a wide range of supplies. A summary of their annual expenses is provided in Table 9, modified from Schedule F of their income tax return.
| Farmer’s Perspective: Lessons Learned Establishing a Reputation Adam and Laura feel strongly that supplementing CSA boxes with produce grown by other farmers is crucial to beginning CSA farmers. Beginners do not have to rent land and have “built-in” mentors as Loon Organics did, but they can network with nearby farmers and negotiate arrangements for supplemental product. Even experienced CSA farmers make these arrangements when time or land availability is limited. |
One of Laura and Adam’s most noteworthy expenses in the first few years was the purchase of product for re-sale. Produce was purchased from Gardens of Eagan and other farms at wholesale prices between 2006 and 2008, as shown in Table 9. They purchased land-intensive crops (such as sweet corn, watermelons, kale, broccoli, cauliflower, and cabbage) that they didn’t have room to grow on their rented land (Figure 53). The items were used to supplement their CSA and farmers market offerings as they switched to an emphasis on direct marketing. |
 Figure 53: Laura and Adam purchased certain land-intensive crops, such as watermelons, for re-sale in order to provide complete CSA boxes in their early years. |
Although the purchased items were an additional expense in their first years, they saw it as an investment in the Loon Organics brand. They also considered it a substitute for hiring labor, which they would have had to do if they were growing all the crops and farming more land. They feel that having offered CSA boxes that were consistently full of high-quality product was crucial to their early success. They also didn’t have to learn how to grow dozens of crops all at once. |
They could focus their own growing efforts on shorter day-length crops (such as salad mix, beets, greens, carrots, roots, heirloom tomatoes and peppers, herbs, cucumbers, and summer squash) that have high yields on small amounts of land. They were very up-front with customers about where all the products came from and got only positive feedback about the quality and variety of the produce they sold.
| Educator’s Perspective: Resource Tip Produce Handler’s Licensing Minnesota law allows farmers to sell the produce of their own operation, from land "occupied and cultivated" by themselves, without any licensing. However, if product is purchased from another farmer or entity for re-sale, farmers are required to have a produce handler's license. MISA has a fact sheet entitled Providing Safe Locally-Grown Produce to Commercial Food Establishments and the General Public that provides further information. |