If there are any farmers about, do the supermarkets tell you what to grow and set the price?

Question

so you have a gaurenteed income, or do you grow what you like and then try to sell it at the best price at harvest?

Answer 1

Some farms are contracted to the big shop chains on the basis that they will grow certain crops and will harvest them to order, other farms grow what they wish and hope that they get a good crop yield and a good market price in the end.

Answer 2

I can't speak for the crop, fruit and veg growers but I'm a sheep farmer and we are stung from the time a lamb is born til the day they go to mart. We don't have any choice of how we farm because of where we live, the land is too hilly and high lying for any crop other than sheep. Last year because of the poor summer weather has meant rising costs of feed and haulage and the Foot and Mouth outbreak meant there was a glut of lamb because no-one could sell. This meant when the marts opened again, the dealers knew farmers needed to sell their stock because of lack of food on the farm, so they wouldn't pay very much for it. Also because of restrictions, once an animal was at the mart we couldn't bring it back home, so we were stuck with whatever the dealer wanted to pay. We, on average lost £18 a head. Yet the butchers and supermarkets never reduced their costs... The consumer ends up paying the cost as well as the farmer, and I'm sure this is the same whatever type of farmer you are. Until the big supermarkets lose their grip of power over producers, or until small co-operatives start up again as they did in the past, the situation won't alter. So no, we don't have a guaranteed income. All any farmer wants is a fair price for their produce.

Answer 3

Supermarkets and farmers usually have nothing to do with each other.  Farmers almost never sell dirrectly to supermarkets.

The food is traveling through a middleman or three before hitting the shelf at the supermarket.  The prices are set by the middlemen, not the farmers.

The price the farmers get for their product is almost never gaurenteed.  If you state your a farmer you might as well state you have a gambling problem.  Farming is one huge gamble.  

Corn growers have prices gaurenteed by the Government.  If the price falls below a certain level, the farmer recieves a subsidy check from the Government to make up the amount.  Other things, like soybeans, and milk also recieve subsidy checks.

Farmers usually grow what grows best in their area, climate, plant zone.

Even if peanuts were selling for fantastic sums of money, potato farmers in Idaho are not going to grow them.  They don't have the equipment, nor would they grow in Idaho's climate.

That is why certain areas are well know for producing certain things.  California grows grape (wine) and avacados, Washington grows apples, Idaho produces potatoes, Iowa produces corn, Florida produces citrus, ect.  

In most areas farmers do rotate their crops, and generally have a choice of 2-4 crops they can plant on their land in any given year.  So a farmer does his best to guess what will be doing well the next year.  Corn is sky high right now, so almost all of them will choose to plant corn, instead of lets say peanuts.

Sometimes farmers have contracts with certain companies.  Here in Idaho, we grow a lot of sugar beets.  Some of the farmers have contracts with the companies in CA who turn them into sugar.  Others will wait to sell them, until after they harvest.

Still other farmers form associations.  This give them more power and usually nets the farmer a better profit for his product.  

Otherwise the one who got the best price was the farmer who was able to harvest first and fastest.  After that, the market starts to become full of the product.  But if the farmers pool together in an association they can all withhold their product and demand the best price possible.  Usually that is not more than a few pennies per bushel, but that can make all the difference in the world to a farmer.

Small farmers are just S.O.L.  I'm a small farmer.  I produce high quality products....and people want to pay WalMart prices for what I sell, since I sell directly to the consumer.  

Watch the Stock Market.  That is what really drives the prices the farmers recieve for their product, and the price you pay in the end at the grocery store.

~Garnet

Homesteading/Farming over 20 years

Answer 4

We have a small family farm (about 60 acres) and we grow fruits and veggies for farm market.  We've done the wholesale route locally, and it just wasn't for us.  

The chain stores expect you to deliver a certain amount of whatever youre growing, and to be able to do so for the whole growing season.  If you cant keep up, they stop buying from you and look elsewhere, rather than keep you and supplement.  

Its hard to keep up with the larger farms, both supply wise, and price wise.  They were willing to sell their corn cheaper to the grocery stores, partly because they buy seed in bigger bulk, as well as chemicals and fertilizers.  So their per acre cost is less.

There is no guaranteed income in farming, and yes, you always try to get the best price, but that is a difficult thing when you are playing against other farmers and other factors from a retailer.

Answer 5

Well Strongbow, You grow what you want to, but usually you grow what will make you the most money. There is no such a thing as a guaranteed income farming. With planning and keeping up with what is going on with the markets (not supermarkets), you can plan on growing what might sell the best. It don't always work out the way you want it to though. Actually the supermarkets have very little to do with what farmers grow in most cases.  Most of what you pay for in the grocery goes to retailers and processors. Only a few pennies for each dollar you spend in the grocery will go to the farmer. If you are planning on what to grow this Spring, grow corn. At least for this year it will be a pretty sure thing (as much as you can get farming).

Answer 6

Some of the answers below are good, here is more info

Food production today is dominated by large family farms, branded as corporate farms by some.  These larger farming companies have formed in large measure because of consolidation of our customers, the need for constant food supply and the large volume of money required to grow these crops.

The largest retailer of food in the US is WalMart.  The other major players are kroger, Safeway, Albertsons, etc.  between these half dozen companies, along with a couple of food service suppliers like Sysco (they sell to restruants), about 80-90% of the food is covered.

And Big sells to Big.  Companies such as Albertson's want consistent supply more than anything, and they deal with companies who can provide it.  As a farmer, this means being part of something that can provide a product 12 months a year, or close to it.

In some cases we sell at a contract price, other cases we sell on the spot market, usually a combination of both strategies.  Our net at the farm level is based on our efficiency.  When we grow a good crop, we usually breakeven or loose, when we suffer from adversity such as bad weather, we make money sicne the supply is low and prices come up.  Ten items at 10 bucks is better than 15 at 5 bucks...

Another big issue these days which continues to push the large farming companies is Food Safety.  The burden put on growers by the retailers to provide mountains of documentation on how we farm, the precautions we take to assure a safe food supply are ever increasing.  We are subjected to regular audits by inspectors, and this takes time and money.  Larger organizations are better equiped to handle this.

So, yes the markets contract with us to grow some things and the price is set, and we have some flexibilty on our non-contracted items, and we hope to make profits on that part of our program.

As a side note, markets sell produce for 3-5 times what they pay for it.