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Financial Benchmarks and Economic Impact of Local Food Operations

Source: Ryan Pesch, Extension Educator-Community Economics 

My co-author, Brigid Tuck, and I just released the following report on the economic contributions of small vegetable farms in the Central Region of the state. It is based on the 2014 financials of 11 farms which raise between 0.25 and 6 acres of mixed vegetables. 

Little data exist about mixed vegetable operations in Minnesota, so, although maybe not a perfect comparison to your own operation, please use these numbers as benchmarks against which to compare your own operation or for basic business planning for a new start up.

  1. The operations in the study gross $9,335 per acre in vegetable sales and retain $4,192, on average, after deducting annual cash expenses. 
  2. The lion’s share of vegetable sales (75%) comes from direct marketing channels, such as farmers markets, farm stands, and CSA arrangements. Wholesale marketing channels, however, account for 25% of total sales. 
  3. Measures of the economic impact of small-scale local farm operations indicate that small farms return $232,550 more to the local economy per million dollars of output than other forms of agriculture in the region. 
  4. Every $1,000,000 in output for small farms produces an additional $608,000 for the local economy, whereas conventional ag contributes $375,450 per million. The total impact of an estimated 65 small-scale vegetable farms in our 13-county study area brings in an estimated $1.1 million in wage and proprietor income.
Full report:

If you are in the Central region of the state (Stearns/Douglas north to Hubbard and East to Aitkin/Mille Lacs), we are conducting another round of this study about 2015 farm finances and are looking for operations which do some commercial mixed vegetable production. You will receive $75 stipend and individual data analysis and business coaching for your participation. Contact me with questions and how to get involved. Call 218-770-4398 or e-mail for additional information.

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