How profitable is a CSA?

It sounds like the going rate is about $300 per year?  And, for that, how many boxes are delivered?

It seems that every small farm wants to be a CSA, but I cannot help but think that the payback might not even break even.

Who has run a CSA and can tell us?

I'd like to know that too. I've always wanted to do a CSA but there are drawbacks, i.e. finicky customers. You'd have to have ironclad rules and fixed operational guidelines to survive. If you're doing just vegetables it would be easy. That would be the place to start.
Still a lot of pressure to get the product out the door regardless. If you think you'd have to have help but are not sure you'll be able to get any when you need it then best not to enter into this type of marketing option. Best yet, acquire select customers who will help
with farm tasks _when needed_ in exchange for extra produce or lowered prices or even limited wage.

What do others think about CSA's for a small market operation (micro [backyard] to 10 acres for example)?

From what i see, the delivered CSA near big towns(Seattle)n run about 500 to 1000 per year. the little at-farm baskets for 300 per 22 weeks is meager. 3- to 40$ per box is affordable fair and if the farmer is doing it right-things all clean and good quality, then there's no complaint.

I helped run a cooperative CSA pooling produce from a large number of farms. We were 22 weeks at an average of $20 in produce each week. Some of the early weeks were less value, and peak season the value was higher. So a box ranged from $14 to $26. We allowed people to pay in 2 installments so they didn't need to come up with $480 all at once.

It can be profitable to run a CSA. I'm not currently part of one. You have to keep your marketing and distribution costs down to make it work. I agree a $30 - $40 average box is better than a $20 average box for all involved, but in some places the higher cost becomes a barrier for people signing up.

The biggest CSA in NM is $28 a week. They only grow a portion of the food themselves and buy from distributors to fill out the box.

I decided to get my feet wet at running a CSA last year with 9 members. I charged $525 for families and $375 for single shares. I'd say it was definetly worth it for me, and I am planning to expand to 60 to 80 members this year. I've talked to a local farm that did an 80 member CSA their first time and said that they didn't pay a cent through advertising. They simply got coverage in local news media, and got free advertizing via the internet on sites like Kijiji and I think their own website. I've also mulled over the idea of offering discounts if members get friends signed up too. And I definetly echo what was mentioned above about making installment plans available.

Overall I'd say its a viable model but there were some headaches though, for sure. I had a few crop failures that left me scratching my head as to what would fill their place. And plan as you might, it can be hard to grow the right amount of produce without having years of experience to draw from. You also don't really know if people are liking what they're getting or are just smiling politely and telling you what they think you want to hear. I plan to have member surveys for the beginning and end of next season so I can hopefully provide more of what people actually want. Another problem was people not showing up to get their food. If its an On-farm pickup then maybe its not such an issue as they could come the next day but otherwise it could be a hassle. There's also the possible problem of getting your boxes back. Some of mine are still out there somewhere...

A weekly newsletter is a great way to go, and has multiple benefits. The buyer feels more connected and is more informed about their food. Plus you can more easily introduce new foods by giving a background story and/or recipes. It also keeps customers informed as to what week it is, as long as you state that somewhere in the letter.

hope to find out one of these years! i hope to do grains of somekind, along with the traditional vegetable. Base of the food pyramid, you know? thanks for the site and forum!

Someone stopped me on the street in the neighborhood next to mine a few weeks back, trying to sell CSA subscriptions. Twice.

He looked a little desperate and sad. So in his case, I'd say "not profitable enough."

Two problems with his salesmanship might be part of the explanation, though, rather than anything intrinsic to CSAs: He gave me the hard sell, and he didn't seem open to the idea that I already know what a CSA is and had already planned to subscribe in a year or two when I have a more permanent job.

The "community" part is important. It can't be hurried, so make sure you have capital enough to survive while you get to know your customers.

Also, in my particular case, know that a high-end shopping district will occasionally draw in a few people with a (for that neighborhood) very low income. There might also be a generation gap in play: when he was my age, young people earned a lot more, and tended to know a lot less about food and the environment, so the major obstacle really would have been explaining how CSAs work.

paul wheaton wrote:Who has run a CSA and can tell us?

We have a CSA and it definitely works. It is a part of our farm. Like our wholesale delivery route it took time to build up and it is still gradually growing. I think the biggest mistake people make is to go into this, or anything, expecting to achieve high success in their first year. It may take a decade and it is one component of a successful farm, not necessarily everything. Other farmers I know who have CSA programs also sell to stores and restaurants as well.

Also be aware that what a CSA varies greatly. Lots of research to do before trying to create one. We don't sell shares in our farm but rather product. Different CSA work in many ways. See:

http://www.wilson.edu/wilson/asp/content.asp?id=804

Cheers

-Walter
Sugar Mountain Farm
Pastured Pigs, Sheep & Kids
in the mountains of Vermont
Read about our on-farm butcher shop project:
http://SugarMtnFarm.com/butchershop
http://SugarMtnFarm.com/csa

It really doesnt matter what model you use.  It takes good business skill and understanding of costs of production to make any business profitable.  Quantifying the cost of production is the hardest thing for any small diversified farm.  Pricing your product is easy once you figure out your costs.  It can be individual items at a stand or a package sent out to your members.  The organic farmers business handbook has a good plan for new or continuing farms for organizing and understanding whats happening with your inputs and outputs. 

I think profitability depends greatly on the scale of the CSA...I think a CSA share should cost no less than $25 per week for a box sized to feed a family of four...profits are realized when you have amassed all the tools and equipment you need to operate the CSA, including hoophouses, tractors/tillage eqpt. and stuff like cold storage and irrigation...so if you are building your farm's infrastructure via CSA revenue, it will take a few years to see profit (and you may not want to factor in labor hours at first).  A good big successful CSA could be developed sooner if you have interned on a high quality CSA farm for a couple of years first, and start on good fertile ground...and have the clear thinking required to plan and run a very complex system that requires many months of succession planting to keep supply up.  I didn't do it that way!  I made lots of beginner errors, and after three seasons of sticking with it am finally seeing the light at the end of the tunnel in terms of being able to produce a good box of food every week in a crazy tough climate on sad soil for almost five months!  I started out all dreams and ambition, and ate alot of humble pie over and over the first couple of years...thankfully, as fate would have it, I was never able to fill the target number of shares (20) those first couple of years...I started with five, and doubled it the second year, and was quite overwhelmed even with that!  I come from a food service background, so finding that what I was producing was disappointing my customers became a huge source of stress and anxiety...not fun!  My strategy currently is to produce alot of the staples that people are familiar with cooking, and minimizing the oddities that us growers are fascinated by...this has increased my customer satisfaction a ton.  All that said, I receive on average more of the food dollar compared to the value of what I grow this way than selling wholesale...but I make more of that dollar doing farmers markets, though CSA is very close.  My thoughts are that I am not trying to short sell what I grow by selling with CSA...but I'm willing to give those members around a 10% discount over market price since they pay up front, and they also share my weather/pest risks...and if I have a bad week or two like this year because of weather events, I try pretty hard to make that up later.  I also love the fact that my CSA income is a large chunk of cash up front.  It allows me to buy infrastructure stuff in cash, rather than financing stuff that costs alot, or scraping together the money over many months.  I think my goal is 125 or so families...at that point, my family could feasibly be supported by the farm, as in we could pay our bills and cover the necessities.  Other sales from markets or to restaurants would be additional income...as well as offering a winter CSA, which I hope to be able to do in the next couple of years.  I have worked off farm though for the first couple of years...and this year still have some off farm income coming in, and my partner works a full time off farm job, mainly because the quality of our soil is not good enough to allow us to get big fast...we have to make fertility wherever we want to grow produce, and have done much of that so far by hand...super taxing and inefficient...though it works...and we've had to make sure to cover the mortgage!  One last thought...my CSA customers LOVE the quality of the food...and the happiest of those customers are the KIDS!  Now that is priceless...

Thank you for that inspiring story, Allison! 

great thread, very helpful to me.

if the number one problem for many people is the cost of land, it seems the CSA model provides stability albeit at the cost of full market value.

attacking the unique and rare market (chefs, restaurants) is an added cost at best, and at worst, an inconvenience to CSA members.

personally, i've been blessed with free land in my family very near washington, DC. im weighing the CSA model (on a super small scale) to help me with my costs of earth moving and greenhouse building. As this is now march 11, and would be my first year, not only may I be putting the cart in front of the horse for practical reasons of skill, experience, timing, infrastructure, Im now thinking that the CSA need not contain intimidating, alien products like old world carrots and herbs (something Im totally into). Given my limitations, I do want to attempt to grow enough for 5-10 members of one set of crops, and then a whole other batch of weird stuff for local markets and chefs.

does anyone else find this distinction of crops being made? do CSAs mostly consist of high producing, conventional crops?

I hated the CSA model, because it put me in debt. I really really don't like owing things to people. I was responsible for a great box of vegetables once per week regardless of weather, family duties, health, or crop failures. I hated all the food that people wasted because they didn't like what I grew, or I gave them too much, or they were too timid to try a purple potato, or whatever. I hated the CSA model, because it put me in debt.

In my market, conventional crops in conventional colors and shapes are easy to sell. Exotic crops or exotic colors attract a certain clientele, but they're basically just skipping the conventional to get some exotic... They don't seem willing to pay higher prices for exotics. One lady only buys yellow tomatoes from me, but that's one lady and $1 per week. Not worth the effort financially, but socially it works for me.

Colin, I have to say that your post pretty well explains why there is an entire industry dedicated to market research. Metro DC is not the same market as NYC, nor Chicago, nor Memphis and on and on. If you design a market basket based on some kind of national average, my guess is there is no market where it would be well received

It takes some experience to be able to make sound estimates of what you can produce and when - and you need to know that in order to provide a conventional CSA. And by conventional CSA I mean a weekly "basket" of produce over a specified season, made up of whatever works for your market and your production capability.