Wednesday, September 14, 2011

Fair pricing

After a customer complained about the price we are putting on leeks today, one of the buyers in the office said it was a fair price.  I almost fell out of my seat, and automatically said if we always got fair prices for produce all farmers would be driving new pickups.  The same buyer was begging me to sell leeks for any price two weeks ago and seems to have conveniently forgotten that as he has some chain store demand for that item.  Meanwhile, another chain wants to buy a 50 lb. master of carrots for about half of what they will bring at wholesale.  This caused howls of outrage from the same people who were ready to kill for that business last year.  It's funny that now they are on the inside and others are ready to jump into their shoes for the coveted chain business.  So, what is a fair price.   Most people would say it is the cost of production, plus a reasonable profit.  If you have a bumper crop, a 50 lb. bag of carrots might cost $8.00 to grow and pack.  In a challenging year, the same bag could easily cost $14.00.  But your competitor in Ontario had perfect conditions and can easily pack for $8.00.  What can you do?  If you have been in this business for longer than a week, you know you sell for $8.00 and shut up, hoping the situations are reversed next year.  So much for fair pricing.

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