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permaculture, income, marketing etc...  RSS feed

 
M Foti
Posts: 171
Location: western n.c.
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I haven't seen much on this and I am very interested in what others have to say from their own experience in marketing their product in an economically viable way. I do not put profits over proper stewardship and alot of what we have going on here mirrors that, but to be truly sustainable you also have to be economically viable. To me, this involves not only earning enough money to live on but enough money to pay for things that arise such as farm equipment and new projects but also saving for disasters and retirement. I'm not talking gobs and gobs of money here, but poverty level income just isn't going to do it on the long term and provide for a retirement income when we're too old to harvest 12 hours a day.

My specific interests are, those of you who have a true permaculture or at least VERY close to it and are able to successfully market your products. On our farm we are not a mono-culture but we are also not permaculture. We're somewhere in between. Right now our main products are blueberries, goldenseal, and cherries. These are things that are all still "new" plantings but are done at a scale that I felt was the necessary minimum to actually interest wholesalers and make it worth doing so. Looking at some of the different setups I've seen online, some of these folks are harvesting MUCH smaller amounts of any one thing, but spread out over a longer season. I can obviously see that you will have a similar harvest potential when it's all over and done with but how are you marketing your smaller amounts of any one product?

I do appreciate speculation and new ideas, but ideas are just that and I'm honestly looking for folks who are actually in practice with their operations and can answer some questions about the challenges of marketing smaller very diverse harvests over larger harvests of one or two types of product...
 
Walter Jeffries
Posts: 1091
Location: Mountains of Vermont, USDA Zone 3
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We have a sustainable permaculture on our farm. It is both ecologically and economically sustainable producing virtually all of our family's income - we have no off farm jobs.

Our two main sales products are wood and pastured pork.

The wood is intermittent primarily selective cutting, a little every year, primarily harvesting high quality maple for veneer and cabinetry but also some spruce, white pine, cedar, cherry, poplar and other woods as well as fire wood and biomass which goes to chips mostly for making pellets for pellet stoves. Forestry is a very long term cropping, thinning out less desirable trees so better trees can thrive and grow. It also involves balancing our farm and wildlife habitat goals. The forestry is both sustainable ecologically and economically - it paid the mortgage for a long time before we began pastured pig farming and while we got that going.

Pastured pigs is our main stick, what brings home the bacon for our family. We have 60 breeding sows, five breeder boars and about 400 pigs on pasture. We feed primarily pasture/hay and dairy (mostly whey) plus some pumpkins, apples, turnips, beets, kale, etc which we grow in the winter paddocks. We deliver weekly to stores and restaurants as well as individuals. We don't buy commercial hog feed / commercial grain but instead use managed rotational grazing techniques on about 70 acres of our mountain pastures which over time has resulted in the improvement of our poor, acidic, thin, stoney soils. It's a slow gradual process. Our major inputs are the whey which we get from a cheese maker across the mountain from us and winter hay - our land is not the best place to do haying given the steepness and rocks. I'd rather roll bales than tractors.

Marketing is something that is very slow and gradual. A business doesn't happen over night. It took us years to build up our weekly delivery route of regular standing orders from stores and restaurants within a 100 mile radius. I had carefully chosen our location to put us in the circles that allowed this when I bought our land back in the 1980's. By the way, buy land on the down swings - like now. We don't advertise but we do have a blog (http://SugarMtnFarm.com) where we explain what we do. Word of mouth sells very well. We have limits on how big we want to grow our farm, which is a business, and how fast. We're not Rush'in.

Our biggest challenge is meat processing. That costs us about 36% to 62% of what we sell each pig for depending on what is done (slaughter, butcher, sausage, smoke). To gain a hold on that we're building our own on-farm USDA/State inspected butcher shop so we can do the work ourselves right here. That will not only save that cost through vertical integration but it also means that the offal, the guts, will stay on our farm where we can compost them and return the nutrients to our soils - a very valuable aspect and part of permaculture. That means we'll export less so our soils will build better and faster. On-farm processing will also let us break through the transport bottleneck (limit of 6 finisher pigs a week trip + roasters) and allow us to do more with every pig such as rendering the lard, more interesting smoking, charcuterie, etc.

Getting there is a process. Good things take time. Start small. Build slowly. Ease into things. This way you get a chance to make smaller mistakes.

Cheers,

-Walter Jeffries
Sugar Mountain Farm
Pastured Pigs, Poultry, Sheep, Dogs and Kids
in the mountains of Vermont.
http://SugarMtnFarm.com
 
Jennifer Wadsworth
Posts: 2679
Location: Phoenix, AZ (9b)
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While I have nothing to add to the actual conversation, I just wanted to thank you both for an interesting question and a fantastic answer!
 
Adam Klaus
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Location: 6200' westen slope of colorado, zone 6
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Good conversation to get started, and inspiring response from Walter.

I have a small farm, 12 acres, run exculsively by me and my wife, that provides our full family income. I should note that we are at the level of subsistence living at this point, not yet earning enough for extras like health insurance or retirement. That will come in time, we are 8 years into our project, supporting ourselves, but not banking money. The capital of our farm has grown over the years, and at some point soon, I expect that our net profits will begin to prosper off of that foundation.

I try to be as diverse as possible. Small harvests make me less dependent on any one crop and its sale. I have found that the higher my yield of any one crop at any given time, the lower the price I receive for it. So if I can space out my sales, and diversify my crops, I can command a much higher price with each and every sale. We have about 20 vegetable crops that we sell during the summer/fall. I definitely prefer something like broccoli that affords a succession harvest to cauliflower that is a one-and-done. I market all my product direct, to local natural food stores (not chains), individual families, gourmet restaurants, and farmers markets. Sometimes I may not be able to sell every last green bean that I grow, but I look at the overall net that I achieve, and am content to not sell more product for a lower margin. I also look to grow crops that can somehow be processed, in a value added way, so that I increase my margins. This way, unsold produce gets a second chance, often times at an even higher margin.

I raise pastured chickens. I keep the numbers low enough that they derive a large amount of their feed from the pasture and other farm waste products, like skim milk and cull vegetables. Customers are always clamoring for more chickens, but that would mean raising them in a more factory way, which would mean lower margins for me. So I keep my numbers small, under 200 chickens, and my margins are very good. We hatch our own birds, and butcher on farm, so that our overhead is as small as possible. Our sales are all customer direct so we do not have to hassle with usda plants and regulations. If I increased my numbers of poultry, I would have more overhead and more regulation, and greater supply would imply a lower price. So I try to stay in the sweet spot, with minimal overhead and high margins. The only number that counts is the net profit.

We run a small raw milk dairy. I thought about going Grade A, but again, that wouldnt make sense at my scale. I milk 4 cows, run a customer direct raw milk share program, and again, have very minimal overhead. My startup investment was like 20k, as opposed to 100k+ for a Grade A facility. My product is the best my customers have ever experienced, and they pay a premium for that. If I needed to sell three times as much milk to try and amortize a more expensive facility, then I would surely need to lower my prices to attract more sales. We could milk more cows if we fed more hay, but that wouldnt be cost effective. Hay is our biggest overhead cost for the dairy, so I manage for the least amount of hay purchased possible. At our scale, buying hay for 3 months of the year is more cost effective than buying a hayfield and machinery. But buying hay for 6 months would be devastating to our profits. Its all about the sweet spot.

Niche products are the final piece of the puzzle for us. People spend a fortune on medicine and cosmetics. So we market them herbal products that are a great value compared to what they are used to spending. The herbal products are non-perishable, so we can store and resell them later. Herbal products fill a nice niche at the farmers market where people are looking for gifts or souveneirs. The margins are phenomenal. We continue to diversify in this realm, and I see it as a really good prospect for our farm in the coming years. Every small farmer knows how to grow and harvest lettuce, growing elecampane or hypericum gives me much more marketplace security.

Permaculture instructs us to have very low inputs through ecological resource management and nutrient cycling. Balancing supply and demand gets us top dollar prices. The end result is a high profit margin.

Hope that helps, thanks for the discussion!

 
M Foti
Posts: 171
Location: western n.c.
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awesome, I didn't expect so many replies so soon

we have a pretty decent sized small farm 30 acres, mostly wooded. We are "new" in that our entire farm is only a few years old and we haven't had any product yet since all of our products are long term things such as blueberries, cherries, goldenseal etc...

we too are looking at value added products, my winter project is to rebuild an old homestead on the property into a really fancy cannery, north carolina is really awesome with their cottage industry laws so we are able to do this on the cheap without a huge investment in equipment.

Our ESTIMATED blueberry harvest when mature should be somewhere from 5-20 tons and our cherry harvest will be from 5-10 tons... I guess, I should say 0 tons at the low end since we all know things can happen. With this large of a harvest and since we're operating somewhere between a monoculture and a permaculture we're mostly looking for lower dividend wholesale markets, but with the value added products we can have a little more time and breathing room to market those direct market or at the very least directly to retailers. We're thinking of jams, spreads and juice concentrates right now, but we try to remain flexible and open minded as to our products. We do have wholesalers lined up and chomping at the bit though, so that's a good thing for us.

Right now aside from equipment (into which I group most tangible items) our only real off farm inputs are sulphur and lime. I can't see an easy way to get away from this, and don't really care to either.

Our cherry orchard is the main point for this discussion, after seeing some videos posted on here about a permaculture orchard and since the cherries are not in the ground yet (this will be happening spring of 2015) I was curious to see what type of marketing models other folks have to see if it is something that I am interested in pursuing. The orchard space will not be large by "real farm" standards, so that is why I'm still on the fence about getting too diverse in there. My big fear is going through all the effort and expense AND TIME to grow these things and then end up with amounts that are too large for us to use, yet too small for us to attract buyers for.

We are going to pursue direct marketing with a cautious approach, the wholesalers will take all that we have any time we have it provided we have enough to make it worthwhile and I don't want to leave that security behind, but the higher profit margins are tempting. Some of our products will be direct marketed alongside our wholesale approach, the shelf stable items for example such as the goldenseal or "jam" that we produce would be ideal for this.

We have some things going for us and others that are not... As per the forestry comment, that would be awesome, but in our area there is no desire for veneer since no one produces it here, most of our wood is bought by log yards in bulk and the prices are shockingly low, they hit 8 dollars a ton this summer. Anyhow, 30 acres is no where near enough to be considered a harvestable forest We are however 2 hours from 4 major cities, one of which is asheville n.c. and has a very high population of alternative living folks. I'm sure properly marketed wholesome products can find a home there and 2 hours isn't too far to drive provided we have a vehicle that doesn't take a fortune in fuel to do so...

We have other sources of on farm income that are in the works, but they do not fall into the scope of this post, so I'll leave them out. anyhow, we are still firmly "in the red" in regards to the farm, but I don't think it'll be over 5 more years until we start seeing some income, in the meantime we have other projects in various stages that can still be re-designed and that is the purpose of my asking these questions.

I am very envious of the poster with the nice animal operation, that is really awesome to have your off-farm input so low for a large animal farm. We all know animals take space, I'm afraid purchasing more land just isn't really feasible for us right now but I do like hearing about other successful operations and how they are run.

Adam, while we are within 2 hours of 4 major cities, I have to admit I'm afraid to go too small on things. No one around here is going to pay for produce, if it isn't for sale in the store, then it had better be cheaper than the store. maybe the thinking on that will change, but for now that is the general consensus here. I could market specific things to restaurants, but they require more of an assurance of product delivery and quality than I can provide for them at this point. If we could grow "just the right amount" whatever that is, we could open up some direct to consumer things in the surrounding farmers markets (each of which would be 2 hours at least). Our local farmers market is ok for garden size products, but a hundred bucks worth of sales in a day is unheard of there so going with several bushels of anything would only accomplish leaving those things out in the sun for the day haha... how far do you travel for your markets? it seems like aside from our 2 large products, we have quite a bit that is similar. I wish we had more folks around here that would appreciate a better product, but we live in an area where Kraft macaroni and cheese is considered a vegetable... Don't get me wrong, we do have a very open minded smaller community directly around us, and I think our smaller very diverse garden can generate some income through our local farmers markets but to generate the kind of income that we want I'm still of the mind that our larger crops are the way to go for us with the ability to turn it all into a value added product in the event of wholesaler shenanigans...

our medicinals are one thing that we can certainly go extraordinarily diverse with and that we plan to do, since the profit margins are exponentially higher with rare medicinal herbs as opposed to produce, in my opinion we can afford to have smaller more diverse harvests and since we're not having to worry about spoilage with them, we do not have to worry about how quickly they sell... I guess that is another concern for me regarding our fruit operation, is that if we are too diverse and we cannot sell our stuff quickly enough, then we are sort of stuck... I'm hoping our organic low sugar value added products will find a market though and if that is the case, then my concerns would be invalid at that point

thank you for the wonderful replies so far!
 
M Foti
Posts: 171
Location: western n.c.
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I wanted to add, that in addition to satisfying my own curiosity, the other point of me making this post is for others to be able to find it and read so they can get an idea of scale for their farms that may still either be in the planning or dreaming stages. I run across lots of folks either through our WWOOF endeavors or just through social situations that want to start a farm and while there is certainly no 'one true right way' to do it, I do feel like most folks do not understand the size an operation has to be before it becomes self sustaining... However, on the other hand, once you grow past a certain variable point in size I think that it starts to be detrimental as well... take for instance a thousand acre farm. Their needs for hired hands, very large equipment, and off farm inputs such as fuel become ridiculous and just that amount of money that is going out and away from the proprietors would quite probably be much more than they are keeping for themselves. So, I am also gauging the scale of the farms that reply to this post an comparing that to economic viability and marketing approach. I feel that this is the issue lots of farmers face, they try to compete with "factory farms" and just can't do it, the corporate farms operate at levels that are beyond most of us and that's when the auctioneer shows up. Marketing a product from our smaller farms is the only way we can "compete" and by "competing" I mean playing a whole different game.

I now feel the need to add a shameless plug for an organization that I have no vested interest in other than the interest of all small scale farmers on the east coast... https://attra.ncat.org/ ATTRA is great as well as ASAP http://asapconnections.org/ These are both great organizations and if you aren't acquainted with them, I suggest any farm that is actually trying to sell a product get acquainted. While they may not serve your specific area, the information is good for anywhere. ASAP is specifically goal oriented in helping small farmers market their products!
 
Walter Jeffries
Posts: 1091
Location: Mountains of Vermont, USDA Zone 3
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M Foti wrote:take for instance a thousand acre farm. Their needs for hired hands, very large equipment, and off farm inputs such as fuel become ridiculous and just that amount of money that is going out and away from the proprietors would quite probably be much more than they are keeping for themselves.


Uhm... I think I should take offense at at that. Not quite sure... You see, I have a thousand acre farm. We have no hired hands, no very large equipment, minimal off farm inputs, very, very low fuel usage... Careful of generalizations.

(Our total farm is about 1,000 acres, a bit more depending on what survey you look at. About 70 acres is pastures, about 70 acres is marshes, about 30 acres is power lines and the rest is forest - a very long term and sustainable crop.)
 
M Foti
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well, that was not meant to offend. I'm glad that you're able to do that, however you said that you have most of it in forestry, so that really isn't what I was referring to anyhow
 
Adam Klaus
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Location: 6200' westen slope of colorado, zone 6
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M Foti wrote:
We are going to pursue direct marketing with a cautious approach, the wholesalers will take all that we have any time we have it provided we have enough to make it worthwhile and I don't want to leave that security behind, but the higher profit margins are tempting.


My experience here is that wholesalers will always tell you that they will buy all of your product. This way, they really get you lined up over a barrel when it comes harvest time. The wholesalers are professional businessmen, and they know that if you have a ton of product, then you will have very little negotiating power, and will be forced to sell it at whatever price they demand. Wholesale merchants are all smiles and reassurances, until the day of the sale, when suddenly 'market conditions' will have changed, and you will suddenly be working with entirely different terms and prices for your products. And there is nothihg you can do, except curse the salesman, sell him you product for a pittance, and swear you will never make the same mistake twice. I dont mean to sound too cynical, but I have been burned, and dont play their game in the same way anymore.

Direct marketing is no smooth road, there are no guarantees there either, but to a much larger extent, you control your own destiny.
 
Adam Klaus
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M Foti wrote:
Our cherry orchard is the main point for this discussion, after seeing some videos posted on here about a permaculture orchard and since the cherries are not in the ground yet (this will be happening spring of 2015) I was curious to see what type of marketing models other folks have to see if it is something that I am interested in pursuing. The orchard space will not be large by "real farm" standards, so that is why I'm still on the fence about getting too diverse in there. My big fear is going through all the effort and expense AND TIME to grow these things and then end up with amounts that are too large for us to use, yet too small for us to attract buyers for.


I would think about other orchard crops that you could use to diversify your planting. I live in the top orcharding region in Colorado, and area that won the Chicago World's Fair back in the day for our peaches and apples. Orcharding is what drew me to this area origionally. What I would say is that, of all forms of agriculture, orcharding is the gamblers game. It is so easy to lose crops to frost, hail, rain, etc. The farms around me that rely economically on their orchards are claiming crop insurance 8 out of 10 years, for one reason or another. Nevertheless, I still am developing a small orchard on my farm, just much smaller than I initially anticipated. I planned on 4 acres of commercial orchard, and have now decided on 1 acre, with the option to expand in the future if things go better than I anticipate. Fruit is boom or bust, if you have a crop, so does everyone else, plummeting prices for all. That is considered a 'good' year. On a bad year, you have a years worth of work, minus the harvesting and sales. I think that orcharding is an area where creative thinking and diverse planning will really help to make the orchard profitable.
 
Walter Jeffries
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Location: Mountains of Vermont, USDA Zone 3
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M Foti wrote:well, that was not meant to offend. I'm glad that you're able to do that, however you said that you have most of it in forestry, so that really isn't what I was referring to anyhow


I'm not actually offended but it amuses me that people pick a number of acres to differentiate big vs small.

As to forestry, it is farming and the ultimate in long term sustainable permaculture agriculture. We plan out generations ahead, not just months or years.
 
M Foti
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Location: western n.c.
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well, regarding orchard crops, our "ace in the hole" is that there aren't any around us. Plenty of apples and not too far away, peaches, but other orchard crops are not here. My gal is an ex-marketing associate so we do have that going for us as well. I definitely hear you on the wholesaler shenanigans and that is why we are building our cannery to a scale that can process our entire harvest if need be. I've drawn the plans for building my own autoclave canners capable of handling big roll in shelving to do bulk work if need be. We are not putting all our eggs in one basket to be sure.

We have spoken with the larger regional chain stores and they are open to dealing with us as well, but that would require packaging of our product and I'm not sure the added time/labor/material will pay off in regards to the higher profits. We are setting things up for mechanical harvesting, so my output for harvesting should be minimal after the initial investment.

We do have several wholesalers lined up, but the first one to give us a hard time will be the last time we ever deal with them, I would like nothing else than to proceed with value added products and am really leaning towards bottled juice concentrates but that will require building of a market and hopefully we can just wholesale our fruit until that happens.

I feel like alot of the risk can be put off by proper cultivar selection, we researched our blueberries for years before we actually put any in the ground, the same goes for the cherries. I'm not as worried about frost as I am birds. so far, while we haven't produced enough to sell much (our plants are going to be 3 years old this spring) we have had blueberries when everyone else in the area lost them to late frost, seems the agricultural extension office in our area might not be the best place to seek advice as they all recommend southern varieties that get hit almost every year.

Adam, you mentioned you do some value added stuff, might I ask if you have experimented with "fancy" containers and what effect that had? I've been curious if the basic jam jar compared to a fancier looking jar has any effect on purchasing. Right now we have 4 large scale buyers that have agreed to deal with us when the time comes, and an all in last resort buyer of a semi-local jam producer who will buy our product at a severely reduced rate if we end up in a serious bind. Luckily for us, our harvests are going to gradually get larger so it will allow us to test the waters in different markets before we get a big boom of fruit.

I appreciate the critique and welcome more of it though! I always appreciate advice from folks who have had experience in an area that we are just getting into


on a side note, we seem to have gotten lucky with our cultivars, we chose northern varieties expecting them to be late producers, but something unexpected happened there, they are late with flowering, but early with fruit set... This summer was our first measurable harvest and it came in before the big southern farms did as well as being completely unaffected by the late frosts and pests... If that happens every year, these may be a blessing.


 
J D Horn
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M Foti wrote:
I do appreciate speculation and new ideas...


Dude (or Dudette)! You are only an hour from the only USDA inspected custom poultry processor in the South and you are not running meat chickens, ducks, and rabbits?! The only rabbit I ever see is $10/lb! I would pay an extra 20-30% for a farm if I had such an opportunity in my location!

http://www.foothillspilotplant.com/
http://www.perishablenews.com/index.php?article=0019643
 
M Foti
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from what I understand, you do not have to be certified to process rabbit meat, at least that's what the agricultural safety inspector of north carolina told me, this was maybe 3 years ago though, so I guess things can change in that time.

Regarding birds, I was unaware that we were close to a processor, that's something I might have to look into. I have threatened to put in LARGE chicken tractors (think 30 x 8 ) in our blueberry fields for pest control and fertilization but was not quite sure what to do with the birds...

Any advice on that? I'd be all ears I never really thought of the possibility of selling them for meat before... Due to the new laws in our country, animals are no longer allowed access to food crops during the final stages of ripening (wonder if the wild birds got that memo?) so I would have to move them from the blueberry orchard to the cherry orchard, as well as move them around the blueberry orchard to get the most pest control possible, after the season is over, selling them for meat would be an interesting concept if the numbers add up...

Oh, I'm a fella haha although the lady of the house is really into raising chickens, ducks and turkeys so she would be the one in charge of that operation, I'm just the grunt labor there.

 
J D Horn
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Regarding the rabbits, I was thinking that the USDA label on them would help you sell them - especially to a restaurant. And you could sell them across state lines. If I were going that route, I would seek out a couple of restaurants in Atlanta and Charlotte (maybe Chattanooga too) and gauge their interest and desired volume. NC may be lax on their rabbit processing but I'm not sure that GA or TN is. The things are so easy to raise and breed. Duck would be a good product too. The reason I think rabbit and duck is that both are unique enough that they should command a premium when pastured chicken may not.

I think you would see amazing results on pest and weed control running chickens, turkeys, guineas, and duck through the blueberry patch and cherry orchard.

Here's a recent NRCS talk by a pastured poultry operator in Arkansas. I found it very enlightening.
https://www.youtube.com/watch?v=oJO7flbkX6U&feature=c4-overview&list=UUSNTGppZx6xMa8MZy64FdiA

Here's a great lecture by Kelly Klober on chickens in general.


He just put out a new book too. http://www.acresusa.com/beyond-the-chicken

Regarding outlets for your fresh fruit product, what about approaching the area the breweries and distilleries? I know the craft brew and distillery scene around Ashville and Chattanooga is exploding. Blueberry and cherry flavors both make great add-ons to alcohol.

I looked at your FB profile and saw your location, and that gave me an idea about your value add opportunities. You are so close to the Georgia wine trail, you might find wineries that would be willing outlets for your jams and preserves.
 
Terri Matthews
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Before I knew what permaculture was, I marketed my back yard blackberries. Basically, I Left one sample pint of berries with people who sold for them to eat, and I told them I was offering them on consignment: If the berries did not sell I would take them back.

I also stapled a business card on my pint container.

It worked very well: by the next day I had a market. Not everybody wanted to sell my berries but enough did.
 
Jen Shrock
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A very interesting discussion. While I have been starting the planning fora much, much smaller diversified array of ventures, I think that there is a lot to glean from this thread. Thanks!
 
William Horvath
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Hey! food forest Permaculture Farm (Australia) is a great example you should check out - http://www.foodforest.com.au/about-us/about-the-food-forest/

They are profitable permaculture farm on 37 acres. Look at their fact sheets for more info and layout of their farm

To summarize their operations: They grow high-value nut crops - pistachios, walnuts, etc. They value-add - they grow grapes and produce wine, they grow olives and produce olive oil, and other things. They sell fruit and vegetables through their fortnightly farmers market stall. They sell seedlings and plants there too.

Their income is diverse and they are an example of a successful and sustainable permaculture enterprise.

A lot to learn there about diverse harvests, value adding and marketing.

 
elle sagenev
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Location: Zone 5 Wyoming
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I haven't really sold anything major yet as the orchard is still in it's infancy and I'm not getting animals until the orchard is up and running. However, I've already got it all worked out. As a U-pick our picking labor should be low once established. To generate business on that end I will be selling at farmers markets. I also contacted a food co-op and have been told they'll buy everything I could possibly get for them. As for animal sales I've sold eggs and turkeys before. I just advertised on Craigslist and a few local facebook groups. Easy peasy. Plus I started a blog so I hope to generate traffic that way as well. Anyway, I'm confident I'll do just fine. Our area is ripe for this type of business.
 
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