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Farmer's market - free market vs managing competition

 
Posts: 7
Location: Ozarks of Missouri
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I think I already posted this, but I can't find it so here goes again.  This is a new account, I'm a ~7 yr lurker and occasional poster who forgot the e-mail associated with his account so I started a new one.  

We are looking for opinions and ideas on an issue as a vendor at a farmer's market.  

We are 2 yrs into permaculture farming in an economically depressed rural area.  We decided to sell at a farmers market and surveyed many markets based on location, attendance, infrastructure, distance, vibe, rules, etc.  We applied to a market that seemed expensive ($650/yr + 3%), but had good infrastructure and attendance and rules that favored true farmers, the downside was the 2 hr drive.   We have small amounts of many things so we listed a wide range of things on our application and were accepted to the market.  According to the rules farmers can sell pretty much anything they produce and while others (resellers, merchandise vendors, bakers, food trucks, etc) have some restrictions of products and numbers of vendors to keep it from becoming a flea market.  

Our mainstay starting and building customers was pastured eggs from our range coop with 90 happy layers along with smaller amounts of pork and mushrooms.    Our bees did really well through the wet spring and summer so we harvested honey and in july started selling honey.  After selling honey for 9 weeks the market manager came by and told us we couldn't sell it anymore as there were too many other honey sellers.

This set off alarm bells, the issue wasn't honey per say, but as a newbie could they veto other product where legacy sellers deemed the competition too high??

After going home and reading the market rules again we wrote a memo to the market manager and the board requesting documentation for the process they were following, that we didn't see how/why they could restrict products a farmer was allowed to sell according to the rules, that it was a financial risk to have products vetoed ad hoc, that we needed something in writing,  and that by-the-way we thought we were the only honey seller that wasn't buying wholesale and reselling.  The market manager responded in writing, they stated that they spoke for the board, and basically said "because we say so" and "it is better if we limit competition at the market" and by the way "you also can't sell eggs or beef".

Eggs are a mainstay and we have significant time and money in fencing, water systems, animals (17 head of cattle) and a multi-species pasture rotation system; not being able to sell beef is a killer.

We requested a slot at the next board meeting.  My wifes inclination is to discuss restriction of individual items, my inclination is to question their authority to restrict a farmer's products.  We are seeing the folly in developing a customer base 2 hrs from home as it is hard to efficiency reach those customers without the farmer's market.

Any feedback, advice, opinions?  
Is it common for farmer's markets to manage what products an individual farmer is allowed to sell?  

Thank you,

Mike

 
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I think you should treat this as high-risk and low reward. Meaning you are unlikely to benefit from fighting this fight, and they seem to control one of the only markets near you. You obviously need to be able to sell eggs, and if they legitimately try to limit a good number of your products I think you should work on other markets. However if its just honey right now, I would in your position look at other markets and maybe try to develop deeper relations with some closer to home but keep selling at the better location.

The other thing I would explain in your conflict with them if they are really resellers is that you have limited honey, and are not really a threat to their business.
 
steward
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Wow Sam that really stinks. (welcome back to Permies by the way!) The way this person is declaring you can’t sell honey anymore to protect the welfare of other sellers sounds like a bias, almost as if the board is partisan or even has vested interest in some of these vendors.  I could understand how a vendor could come in, undercut all the competition by 50% and make their money by selling in volume, and that I think isn’t quite fair to all market sellers as a whole. But if your honey, eggs and meat are the same price as the rest, it’s then solely consumers choice really, at least I think so. I don’t sell at a farmers market, but I shop at one weekly, and I have farmer loyalty. I found nice people, and while they may not have a certified organic farm, they assured me they use no chemicals and their food is safe to eat, and I go back to them every week. There are other vendors at this market that are resellers, selling commercial produce that I could get at the supermarket, and I do not shop at their booths. If the other veteran sellers have customer loyalty, I don’t believe anyone should be concerned with a new vendor. I think it’s important that small farms work together instead of against one another.

I agree with Lucas, and perhaps other avenues for sales may be good to consider.
 
pollinator
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The board can decide whatever they want to decide, cut your losses and find somewhere else to sell. I would make a guess with a table price as high as theirs they have a lot of people who want stands so they do not really care much if they drive off someone who either competes with the vested interest or they simply do not like.
 
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I think it's really frustrating when farmers markets do this. It's bad for farmers and the land because it's encouraging farmers to have less diversity in animals and plants, which means there's also less of a buffer against crop failures or bad years.

If you decide to keep selling there, one idea might be to have fliers with a web address there to hand out to customers, or an email list for them to join, so you can stay in contact with them and let them know about the eggs, honey, beef, and anything else the market doesn't want you to have on the stall - you might be able to sell with pre-orders instead that they just pick up from you there. This idea also helps if you choose to stop selling at the market, you might have built up enough of a customer base to make a regular delivery or pick up point worthwhile.
 
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If you've already paid your dues for the year, just keep showing up and selling what you want, and challenge them to do anything about it. I'm sure they don't want the type of Gong Show that would ensue if they told me I couldn't sell something. I'd be the first one there every Market Day and would refuse to move my vehicle or my stuff. Challenge them to have you removed and see what happens. Not exactly a capital offense, the rules may have no teeth. The police aren't in the business of enforcing contracts. If you've got a piece of paper showing that you paid, you're allowed to be there. Let them hire someone to constantly watch, to see if you break the rules. Perhaps you could force a position where they would pay damages, to make you go away.

People who are normally powerless, love to join things where there's a committee and they can all gang up on somebody. It's sort of a genteel way of joining a gang.
 
James Freyr
steward
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Dale Hodgins wrote: Perhaps you could force a position where they would pay damages, to make you go away.



I believe this has a lot of merit. This is me thinking outloud here, but perhaps a proposal could be offered to this board that you leave if they - refund the prorated amount of dues for the remaining market days, and, pay lost revenue potential equal to your best day at the market for each market day remaining in the year. Just a thought.

I was thinking about this and it's sounds so strange for an attempt to restrict someones way of earning a living, that I wonder if there is some nepotism going on. How close are these "preferred" vendors and the board - any family relations there?

Nashville has a couple farmers markets, or more like several now. A new one cropped up some time ago and after a year or two, many vendors didn't like how it was being run, and they left that market and started a new one in a church parking lot not hardly a mile away. Apparently this had a negative affect on the first market and they struggled, and after a year or two (I can't remember how long it lasted), terms were reconciled and a new agreement was made and the vendors that left went back to the first farmers market, which is now thriving and growing, bustling with activity and shoppers and everyone is benefitting. I don't know the details about why the vendors walked and formed the new market, but I guess it was bad enough that they weren't going to put up with any shit.
 
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I don't know farmers markets, but based on my knowledge of contracts (and boards):

- Re-read your contract yet again.  I don't mean the rules - I mean the contract.  There may be a noticing provision in there that will solve your problem.  Do you know any lawyers or paralegals that might be willing to give it a read-through for you?  A letter from an attorney can go a long way.

- Always refer back to the contract.  In the end, the contract rules.  

- Don't "challenge the board's authority."  That will just piss them off, and there may be underlying factors you don't know about, fair or not.  Approach it as "I don't understand what's going on."  The manager says she speaks for the board, but the board may know nothing about this.  Playing just a little dumb can help - you'll just have to read the room.  

- Make the eggs the main issue, and make it clear that you wouldn't have chosen that market if you couldn't sell eggs. It's not clear from your post whether you listed honey on the initial application, but if they reserved the right to restrict individual items, and you didn't list it, you're probably out of luck on that front.  Stressing that you're producing it on your own farm could help as the underlying philosophy of the rules seems to favor producers rather than resellers.

- Kiss the board's butt.  Make sure to praise the market and say how much you like being there and that you really want to stay.

Good luck, and please keep us updated

 
pollinator
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This is a VERY common occurrence at farmers markets here. In fact most have lists for joining members stating what they can, and cannot sell due to the others already selling in the market place.

The farmer's markets have to limit types of sales, otherwise competition would kill profits for all farmers involved. That is no good because market farms cannot be profitable at wholesale prices. And it is not like consumers are there for the best deal possible, they are there to help promote local agriculture, and get high quality food. Getting into a pricing war in the same parking lot is not going to do anyone any good.

I do think you got the raw end of the deal somewhat because they did not give you a list of what can, and cannot sell before joining, but I am sure it is just a matter of them assuming you were selling x, y and z, and when you included honey, they had to step in and inform you could not do that.

We live in a free market society, and farmer's markets are part of that system, but it is the equivalent of being in a labor union. In this case you pay in to get the benefits as a member. But so have others who have more seniority, and who have been paying in for a long time. But no one is saying you cannot sell your honey, or start your own farmers market, they are just saying you cannot sell your honey at the farmers market they control.
 
pollinator
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My take is their market, their rules. Challenging a long established organization as a newcomer just seems silly and a good way to get a reputation with the other farmers markets around the area.

But still trying to get my arms around this:

We applied to a market that seemed expensive ($650/yr + 3%), but had good infrastructure and attendance and rules that favored true farmers, the downside was the 2 hr drive.



How could that be profitable or sustainable? A 2 hour drive, (4 hr round trip) is going to be something on the order of over 200 miles, or 6 gallons of gas. Per diem  compensation that allows for fuel, maintenance and wear and tear stands at .58 cents per mile, so 200 miles = $116 per round trip. That doesn’t factor in your time (a day away from your projects) that could be conservatively valued at $100 for the time prepping the goods for sale and packing the vehicle, the round trip drive and the time selling, assuming a single person. That leaves us the costs of growing the food, inputs, time to plant, maintain & harvest. A more difficult metric to quantify, but for the sake of this argument, let’s put that at $20 total for what you lug to the market and sell. Does the market require liability insurance (the market 10 minutes from us requires “proof of $100,000 liability insurance naming SFMA as additional insured”), so starting around $300 annually there.

Annual costs assuming 50 market days.
Fees:                    $650 (annual)
Insurance:            $300 (annual)
Marketing labor: $5,000 ($100 per market day)
Vehicle costs:     $5,800 ($160 per market day)

          Total:    $11,750 or $230 per market day based on above assumptions and 50 market days. The 200 mile round trip (or is it 100 mile round trip?) is killer to any profit margin and other than gas costs, the wear and tear on the vehicle can be a hidden cost that is easily left out of a rosey scenario accounting exercise. Plus the distance involved likely means cancelled market days due to snow or severe weather.

That’s a lot of eggs meat and honey to just break even. I guess the question is, is the juice worth the squeeze?
 
Sam Thumper
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James - Yeah you are probably right.  Actually 280 miles round trip.  16 gallons of gas (pulling a trailer with freezers).  No insurance requirement...but you are probably right on the other costs.



 
Sam Thumper
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Location: Ozarks of Missouri
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Elizabeth - thank you for the inputs and ideas.  I did go back and re-read things and under a section for "resellers" I found a criteria that if a true farmer starts selling a new item that resellers are selling the market management is supposed to notify the resellers to phase out their product.  They actually did the reverse with us.  
 
Sam Thumper
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Travis - thanks for your inputs.  Yeah I was trying to figure out whether I should be thinking of the market as a "free market" or as a guild or union of a sort.  I was also struggling with the idea of price and competition and financial sustainability for farmers.  I can't help but think that limiting competition which keeps prices too high ends up making food unaffordable for the masses (at least unaffordable after they pay their medical and electronics bills) and shrinks rather than grows access to good food.  hmm..
 
Sam Thumper
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Location: Ozarks of Missouri
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Dale/James - your approach was my initial reaction which was to challenge what was going on.  We're going to give it an initial shot.  We got on the agenda for the next board meeting for the farmers market.  I'll basically read their own rules back to them and see what happens.  I think if they insist that they don't need to follow the market rules to the detriment of the vendor then it is a breach of contract...I'll have to figure out how to play it.  The meeting is on 8 Oct.    In the interim we have not been selling honey but we have kept selling eggs.  After what we eat and sell to neighbors we take about 40 doz to the market each week.  Seeing those go to waste was just too painful.  They haven't re-challenged us on it.  
 
Sam Thumper
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Location: Ozarks of Missouri
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Lucas, et. al.

Thanks for the idea.  We know we need to develop other avenues for sales, we've just not dug into it like we need to.  This incident really pointed out the drawback of selling so far from home as if we pull out of that market the distance will make it logistically tough to reach customers that we've built up.  Our local area is really economically depressed.  When I go to the local small animal auction (goats, sheep, fowl of all kinds, guns, farm equipment etc) they usually start by auctioning eggs which usually go for <$1/doz.  At the local farmers market the big egg producer sells egg from confinement chickens @ $2/doz.  I figured if we set up at the local market and sell at $3 or $3.50/doz we wouldn't do very well.  ...one way or the other we'll figure it out.

   
 
Travis Johnson
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Sam Thumper wrote:Travis - thanks for your inputs.  Yeah I was trying to figure out whether I should be thinking of the market as a "free market" or as a guild or union of a sort.  I was also struggling with the idea of price and competition and financial sustainability for farmers.  I can't help but think that limiting competition which keeps prices too high ends up making food unaffordable for the masses (at least unaffordable after they pay their medical and electronics bills) and shrinks rather than grows access to good food.  hmm..




I hear you, and it is sad.

On my farm, I chased the higher prices for awhile myself, and quickly learned that my efforts were better served trying to reduce how I produced my lamb, and sell at wholesale. It sucks, but there is something nice about making a call today, and getting a check today. I just had to figure out how to raise sheep cheaply.

There is another topic on here about giving up on pigs, and it is all about marketing too. We are farmers, and generally we do not do that well on that aspect of things.
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