Week 16 Newsletter

After printing the letter from Frank Scheib and Dick Shirey, we were not surprised to receive a letter from at least one member who requested to hear more about the farm budget. We have always been very open with our finances and encourage involvement from members. We used to have an annual budget meeting with a self-selected group of members representing all the different communities. Dick and Frank have been intimately involved with this process for many years. Back when we had these budget meetings it was always interesting to me that the tension was so unusual: unusual in the sense that the members requested a large share-price increase while the farmers were for a more modest one. The members were right, as they wanted to ensure Roxbury Farm’s sustainability; there is little sense in cutting corners from a long-term perspective. But we were concerned that an excessive price increase would scare members away from participating. During the '90s we had to sell our produce to wholesale accounts, farmers markets, and restaurants in addition to the CSA members, and this was less than ideal. Our combined long-term interest was to increase the CSA, as we agreed that it makes for the most efficient operation. At the end of the day, we were always able to reach a consensus; a share price was set, each community pledged to recruit a certain minimum number of members, and the farm had an operating budget that served as a guide of our projected income and expenses.

As production became more efficient, the “dividend” was paid out in an increased amount of produce, which meant that at some point we halved the shares, because a full share was simply too much food for one family. This so-called half share became what we know today as a full share (the half share grew in size over the years). So, while the share price increased, so did its size. After 18 years of CSA we have always tried to maintain the cost of a share at about $1.00 per pound of vegetables. Some years we went over and some years we went under. The kinds of vegetables have changed, too, but overall we find that we provide the members with a better value than we did 18 years ago, as our quality has gone up and the prices of vegetables in the supermarket have increased substantially. This season we can no longer claim the $1-per-pound rate, as we have hit a ceiling of efficiency. We are running out of ways to save operating costs and costs are going up faster than our ability to produce better.

Yes – that brings us to this exceptional year. This year alone, our fuel costs have increased by about 100 percent compared to last year – from $21,000 to about (projected) $40,000. Our payroll will have gone from $137,000 to about (projected) $160,000 (this does not include Jody and me). As a result of the increased fuel cost, payroll, and utilities we will spend at least $43,000 more than last year. The base share price for 2008 increased by about three percent, which means we will have approximately $17,000 of extra income. Combining these three items, we are faced with about a $25,000 shortfall on our projected budget.

We expect extra income from hay and meat, but the expenses associated with these new enterprises barely cover their costs; we know it will take a few years before we are able to reach a level of efficiency similar to what we have attained with the vegetables. We also have had some unexpected expenses. For instance, in the last two weeks we had to hydro fracture the well for the packing barn (we came to the farm one Monday to find we didn’t have any water); the compressor of the walk-in cooler broke down; we installed a new fuse box that serves both the pump and the cooler; and one of our larger tractors needed to be split in half when one of its seals leaked fluid from the engine to the transmission. But then again, we always have something that needs to be fixed on this farm. Our total budget for the farm enterprise might break $600,000 this year; Jody and I hope to skim off eight percent of that in profit, which is also our wages. We always put at least 10 percent of our total revenue back into the farm: This year we invested heavily in on-farm housing, a new tractor, and a fence for the farm animals, while we took out equipment loans for a new baler and disc-bine. These equipment loans are financed at zero percent, so we figured we are better off stretching these expenses out over three years.

I hope that this information helps you in gaining some understanding of how we make this farm work financially. We hope that you do not have the impression that without your contribution we won't be able to survive; we are a stable farm, but could not foresee such dramatic changes in our economy. We have already received contributions from many members and are very grateful for your support and your trust. We all thank you very much. ~Jean-Paul