The Complete Patient

The discussion about farmer profits, or lack thereof, illustrates how amazingly conflicted we are about food, both as growers and consumers.

I hear several issues being raised simultaneously, and that has a way of clouding matters:

--Personal goals versus business goals. Farming is an unusual profession in that people do it as much, or more, for personal fulfillment. They enjoy being outdoors, gain much satisfaction from growing things, like being with animals, enjoy manual labor, and so on. And today, more than ever, people are being drawn to farming by the appeal of doing something important—improving people’s health with nutrient-rich food. I hear a lot of idealism in the comments, about providing nutritious food to the masses.

I’ve always felt that business owners should look hard at their personal goals when starting a business, which leads me into the next issue...

--Personal goals as an extension of business goals. Some people seem to be saying that because food is essential for everyday life, prices should be kept affordable to the great mass of people. But there’s also recognition that while some people like paying $40 a gallon for coffee-flavored water, others prefer to pay $10 a gallon for real milk and $5 for a dozen real eggs.

I’d like to throw out the proposition that there’s no one right answer. If Dave Milano wants to sell his food at lower-than-market prices because he wants locals to have it to for good health, that’s a reasonable goal…for him. It’s a personal value decision that is also a business decision. A guy down the road may decide that his goal is to do the same thing, but make a reasonable profit as well, and the best way to fulfill both goals is to sell some of his food directly to locals, and haul some to a big-city farmers market, where he can charge two or three times what he charges the locals. Or, more grandiose, he may set up a nutritious-food Internet site where he charges even more than at the farmers market.  Well, that’s another reasonable personal-values decision turned into a business goal.

Joel Salatin won’t ship beyond a 100 mile radius of his Virginia farm because he wants each community to develop its own local food sources. Mark McAfee will ship raw milk nearly anywhere, feeling that if people need the healthful benefits of raw milk, they should be able to get it. Each is a reasonable personal approach. But each farmer has also integrated personal goals into business decisions.

--Competitive issues. There’s another factor at work here that tends to get overlooked. Direct-to-consumer sales are soaring because demand is ahead of supply. So some farmers are facing the “dilemma” of whether to charge higher prices, in light of their idealistic personal goals. I’d like to throw out a factor that hasn’t received much consideration here: the risk factor. As we’ve seen on this site numerous times, farmers who produce raw milk face serious legal risks, and it almost doesn’t matter what states they are in. The regulatory authorities are making life difficult for meat producers, as well, and that situation isn’t likely to ease as the National Animal Identification System (NAIS) takes hold. Indications are that vegetable growers could face regulatory problems as well.

Even the most permissive state situation can turn on a dime. And we’re not even talking about the risks from weather, energy costs, etc. Any business running high risks needs to calculate that risk into its pricing considerations. Investors often talk about “the risk premium” for certain securities. Well, sustainable farmers face a major “risk premium.”

We are seeing some big changes in our society as increasing numbers of people come to understand the importance of consuming nutritious food—the growing number of farmers markets and CSAs tell us that. Not everyone recognizes or understands that, and those that don’t are often the ones who think nothing of paying $4 for a box of sugared cereal, and objecting to paying $4 for a dozen eggs. Those people need to be educated, but until they are, should farmers sell their eggs at $2 a dozen because the factory system has taught them to expect that? (And that’s why the factory system can never be expected to produce nutritious and consistently safe foods—the pressure is always on to cut costs and increase profit margins.)

This whole situation gets so murky because it really is complicated. But it's important for us as individuals to try not to mix apples and oranges. or should I say, raw milk and pasteurized milk.