“I have no basis for comparison to help determine if I am financially successful relative to other farms, or how much is reasonable to expect to make.”
Financial performance has long been a challenging subject for farmers to talk about. For decades it was because there wasn’t much to talk about. The traditional model of wholesale agriculture — in which family farms produce a great deal of one product, such as milk or corn or apples, and sell it to a single source for distribution to retailers — has largely disappeared because there was not enough money to be made. More diversified small-scale farms struggled financially due to lack of access to markets.
Farm reform movements over the last four decades focused primarily on environmental concerns and practices while leaving the economics largely unexamined. By pretending that the business reality of farming was the same as it ever was, sustainable agriculture programs were slow to move past the traditional rurally-focused model and failed to harness the economic power and vibrancy of local agriculture. They taught farmers to be stewards of the land, but they did not teach them how to work and manage it in a way that would sustain a business. They continued to encourage farmers to produce agricultural products at a scale that lost money, instead of emphasizing products that served the growing needs of urban and suburban customers and their desire for fresh, healthy food. They continued to teach farming methods that conflict with urbanization rather than leveraging its advantages.
SPIN-Farming realized the future cannot be created by a better past. It offered a new model that recast farming as a small business in a city or town. It greatly downsized agriculture and embedded it into urban and suburban areas. Unlike other small-scale farming models, it measured size in square feet not acres and focused on making money. It showed that an urban-based backyard-scale farmer on an acre or less could earn as much, or more, income as a small-scale farmer. Success then became a factor of not how much land was worked, but how little, and how well the SPIN model was applied.
To judge success, SPIN makes it quantifiable. There is much about farming that can’t be standardized, but its system identifies what can for those starting out at the backyard micro level, as well as those scaling up to multiple acres. In farming a lot of production figures are based on an acre. It is easier for a newer generation of growers to start out at a backyard-scale so SPIN is based on smaller standards of production. A SPIN bed is 50 sq. ft., and a segment is 1,000 sq. ft. Maybe something like a 40′ by 25′ garden area.”
A traditional and often used farming benchmark is yield. Certainly the amount of crops you produce is important. But to succeed as a business, what is most important is not the ability to grow in significant volume. It’s the ability to sell at pricing that makes it worth your while. So in addition to yields, SPIN identifies and tracks stats that contribute to a farmer’s performance based on a standard size bed and segment, including:
✔ number of transplants required
✔ amount of seed required
✔ seed rate
✔seed cost
✔ yield
✔revenue potential
Revenue potential is based on a targeted price for a specific crop, using a set of marketing practices and pricing strategies selling direct to local markets. SPIN’s benchmarks aren’t achievable in every case, and some have been far exceeded. Every farmer adjusts them based on their circumstances.
Using SPIN’s benchmarks, a farm’s revenue potential can be sized up pretty quickly. Over time, each farmer creates their own benchmarks to help them get at the answers to the questions that keep a lot of them up at night. How well am I doing? How do I know if it’s possible to do better? How much better?
Financial performance is something farmers should be eager to figure out now, for good reasons. There’s a lot of new potential out there to make money. It’s something farmers should be talking about.
START FIGURING OUT REALISTC REVENUE PROJECTIONS WITH SPIN-FARMING BENCHMARKS HERE.
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