My Digital Farmer Podcast: Episode 307 - Five Signs It's Time to Raise Your Farm Prices

Host: Corinna Bench
Release Date: April 9, 2025

In Episode 307 of the My Digital Farmer Podcast, host Corinna Bench delves into a critical aspect of farm business management: pricing strategies. As both a CSA farmer and a marketing specialist, Corinna provides invaluable insights into recognizing when it's time to adjust your prices and offers practical advice on implementing these changes confidently. This episode is particularly beneficial for farmers navigating the delicate balance between affordability and profitability.

1. Selling Out Too Quickly

Summary:
One of the most straightforward indicators that your prices might be too low is consistently selling out of your products rapidly. While high demand is a positive sign, it can also suggest that you're underpricing your offerings.

Notable Quote:
"If your product or service is selling out every time, chances are you are undercharging." (05:45)

Insights:
Corinna emphasizes the importance of finding the "Goldilocks zone" in pricing—not too high to deter customers, nor too low to undervalue your products. She suggests that leaving just a few items unsold can be an ideal balance, indicating optimal pricing.

2. Being Booked Out Far in Advance

Summary:
When your services or products have waiting lists extending months or even years, it's a clear sign that demand outpaces supply, often due to underpricing.

Notable Quote:
"If customers are willing to wait months or even years to buy from you, your price isn't high enough." (12:30)

Insights:
Corinna shares a personal anecdote about a high-demand Montessori school that monetized its waitlist, illustrating how scarcity and high demand can be leveraged through strategic pricing. She advises farmers to consider seasonal pricing adjustments, charging more during peak times to maximize revenue without overwhelming demand.

3. Increased Costs

Summary:
Rising operational costs—such as feed, labor, or fuel—necessitate a reevaluation of your pricing to maintain profit margins.

Notable Quote:
"If your feed or your labor or fuel or any of your inputs have gone up and your prices haven't adjusted, your profit margin is shrinking." (18:15)

Insights:
Corinna underscores the importance of regularly reviewing costs and adjusting prices accordingly. She advises communicating the reasons for price increases to customers by highlighting the added value or quality improvements, rather than merely citing increased expenses.

4. Attracting the Wrong Customers

Summary:
Low pricing can attract bargain hunters who may not be genuinely committed to your farm's mission or products, leading to lower customer retention and engagement.

Notable Quote:
"Low prices attract bargain hunters, and bargain hunters don't value your product as much." (25:50)

Insights:
By raising prices, farmers can filter out non-committed customers and attract those who appreciate the quality and value of their offerings. Corinna shares examples of CSA members misusing their produce, illustrating how higher prices can lead to a more dedicated customer base.

5. No Price Increase in Over a Year

Summary:
Failing to adjust prices in line with inflation, cost increases, and growing expertise can result in stagnant or declining profitability.

Notable Quote:
"If it has been 12 plus months since your last price review, my friends, it's time." (32:10)

Insights:
Corinna recommends annual price reviews to ensure your pricing remains competitive and reflective of your farm's evolution. She shares her experience of consistently raising CSA prices and the positive reception from her customers, reinforcing that gradual increases often go unnoticed if implemented thoughtfully.

Bonus Sign: Low Prices Hurting Sales

Summary:
Sometimes, pricing too low can unintentionally signal low quality, deterring potential customers who associate higher prices with better products.

Notable Quote:
"Your consumer is looking at the price tag and they're making some interpretation, they're making some assumptions, and they are equating quality with price." (40:20)

Insights:
Corinna discusses how higher prices can enhance perceived value, attracting customers who are willing to pay more for premium quality. She encourages farmers to experiment with price adjustments to observe changes in customer behavior and sales performance.

Strategies for Raising Prices Without Losing Customers

Corinna doesn't just identify the signs—it also equips listeners with actionable strategies to implement price increases smoothly:

1. Incremental Increases:
   Gradually raise prices by 5-10% to make changes feel natural to customers.
   "A 5 to 10% bump might feel more natural to a customer to the point that you may not even need to bring it up." (45:35)

2. Seasonal Pricing Adjustments:
   Charge higher prices during peak seasons and lower during off-peak times.
   "Don’t be afraid to raise the price when the product is more popular and when everybody wants it." (47:10)

3. Communicate Added Value:
   Highlight improvements or additional services that justify the price increase.
   "Focus on why your product is now worth more." (50:05)

4. Offer Loyalty Perks:
   Reward existing customers with early access to price increases or special offers.
   "Offer a VIP or a loyalty perk. Give some of your past customers a heads up that this is happening." (53:15)

5. Test Price Increases in Phases:
   Implement price changes on select products or services to gauge customer response before a full rollout.
   "Test price increases in phases. Start with one product, one service, and see what the customer response is." (55:40)

Conclusion and Final Thoughts

Corinna wraps up the episode by reiterating the importance of recognizing and responding to these pricing signs to enhance farm profitability. She encourages farmers to adopt a mindset shift regarding pricing, emphasizing that it's a strategic business decision rather than merely a numbers game.

Final Quote:
"Maybe it's just a little, like, you wiggle into it... but just try it. Test it for four weeks and just see what happens." (59:50)

Takeaways:

• Regularly assess your pricing strategy in relation to demand, costs, and market positioning.
• Implement price increases thoughtfully and communicate value effectively to maintain customer trust.
• Embrace incremental changes to build confidence and reduce the perceived impact on customers.

For more detailed discussions on farm marketing strategies, visit mydigitalfarmer.com and consider joining the Farm Marketing School to enhance your business's profitability and sustainability.