How to Price Your Products for Profit

Let’s face it–pricing your farm products can be one of the most confusing, frustrating parts of running a business. How do you know if you’re charging the right amount? How do you compete in the market without undercutting yourself? And most importantly, how do you know if you’re actually making money?

In our recent Local Line workshop, farm consultant Ellen Polishuk of Plant to Profit and CSA Farmer Glen Young from Cold Springs Organics tackled these exact questions. Their message?

If you want a profitable farm, you need to stop guessing and start calculating.

Let’s walk through the core insights from the session and show you how to use a simple crop costing tool to make sure every crop you grow is worth your time, effort, and energy.

The #1 Mistake Farmers Make When Pricing

What is the biggest mistake farmers make when setting prices? Basing prices on what others are charging instead of what it actually costs to grow their products.

As Ellen puts it, “Farmers are pricing based on magic. They’re picking numbers out of thin air or copying someone else’s, without knowing if that number actually works for their farm.”

This “wishful pricing” approach might get you by in the short term, but it often leads to burnout, cash flow issues, and confusion about where the money is going. So what should you do instead? Crop costing.

What is Crop Costing?

Crop costing is the process of calculating the exact cost of growing a specific crop, so you can price it properly and ensure profitability. It’s more than just adding up seed costs. Crop costing includes:

• Direct inputs: seeds, compost, soil amendments, packaging, and other materials used specifically for that crop
• Labor: the time it takes to prepare beds, seed, weed, harvest, wash, and pack the crop
• Yield: how much product you’re harvesting from each bed or block
• Revenue: how much you earn from selling that crop
• Gross margin: the percentage of sales left after you subtract input and labor costs

Why Crop Costing Matters

Without this information, pricing is guesswork. Many farmers set prices based on what others are charging or what they think customers will pay, without knowing whether those prices are actually sustainable for their own farm.

When you know your numbers, you can confidently:

• Set fair, profitable prices
• Identify your most and least profitable crops
• Make informed decisions about scaling, dropping, or adding crops
• Explore new markets like wholesale
• Pay yourself and your team fairly
• Invest in your business with clarity

The Tool: A Simple Spreadsheet with Big Insights

To break down crop costing, during the workshop, Ellen introduced a crop costing spreadsheet (originally created by Kitchen Table Consultants, now Good Roots) that makes it easy to plug in your numbers and get a clear picture of your pricing. The tool calculates your:

• Yield per bed
• Direct costs (like seeds, soil amendments, packaging)
• Labor hours
• Gross profit
• Break-even price
• Cost per unit

It's flexible enough to adapt to small or large farms, single crops or diverse operations, retail or wholesale models. You can download her crop costing sheet here.

Real-Life Example: Pricing Lettuce Mix

To show how it works in real life, Glen from Cold Springs Organics walked through the tool using lettuce mix, one of his top-selling crops.nHere’s how the numbers broke down for one 100-foot bed:

• Yield: 48 kg
• Price per kg: $26.67 (based on how he packages and sells bags at market)
• Gross revenue per bed: $1,280
• Direct input costs: $65 (seeds, compost, bags)
• Labor time: 7 hours @ $23/hr (including harvest, washing, and packing)
• Cost to grow: $4.87/kg
• Break-even price (to hit his target margin): $19.49/kg
• Actual price: $26.67/kg

Result: Healthy profit and a crop worth scaling or selling wholesale.

Thanks to the investments Glen made in harvesting tools (like a greens harvester and a salad spinner), his lettuce mix is efficient to grow and wash, making it one of his most profitable crops.

Why Gross Margin is Key to Pricing

One powerful feature of the tool is that it helps you factor in gross margin—a number that reflects how much you need to make on each sale to cover all your other farm expenses (overhead, insurance, equipment, non-production labor, and your own salary).

For example:

• If your gross margin target is 40%, you’ll need to price higher than your cost to grow to make room for everything else.
• For many diversified, small-scale farms (like Glen’s), a more realistic margin target is 60–75%.

By entering your target margin into the tool, it calculates the minimum price you need to charge to meet your financial goals automatically.

You can also run different scenarios:

• What if you increased your price?
• What if you made your harvest process faster?
• What if you outsourced a crop to another farm?

How to Start Crop Costing

After you download, Ellen’s crop costing spreadsheet:

1. Pick one crop to test the tool with—maybe your best-seller or the one you’re unsure about.
2. Gather your data:
   
   • Average yield per bed
   • What you charge per unit
   • How long it takes to grow, harvest, and pack
     
     
   • Your direct costs (seeds, compost, bags, etc.)
   • Hourly labor rate (including taxes and benefits if applicable)
3. Plug the numbers into the spreadsheet
4. Experiment with the gross margin goal to determine the price you need to charge.
5. Make smarter decisions–drop unprofitable crops, raise prices, invest in efficiency, or explore new sales channels, such as wholesale.

You don’t need a business degree to run a profitable farm, but you do need to know your numbers. Crop costing helps you shift from a reactive to a strategic approach. Instead of guessing whether your farm is working, you’ll know–crop by crop, bed by bed–what’s worth growing and what’s not.

As Ellen says, “What would happen if you stopped growing stupid crops—or started charging more than it costs to grow them?”