Definitions and Background:

Each of four flower farms spent the 2022 season in a facilitated cohort using the Know Your Cost To Grow program. After choosing two crops to study, they identified all of each crop’s discrete direct variable labor activities, and then spent the season conducting time studies for each activity. At the end of the season, we were then able to calculate each crop’s total direct variable costs, and ultimately its contribution margin, defined as the crop’s returns to indirect costs and profit. Armed with this knowledge, a farm can then work towards the goal of increasing the overall combined contribution margin for all of its crops.

Key Takeaways From The Data:

●  Transplant Costs: Costs for transplants, tubers and corms proved to be significant almost across the board. This demonstrates that one area for improvement for many flower farms could be sourcing chapter plant material, either by producing one’s own (by propagation, digging and storing, etc), seeking new sources, or buying in greater quantities in shared purchases to cut down on cost. One caveat to note is that high transplant costs may help to contribute to a high contribution margin, as in the case of an expensive tuber for a dahlia variety that yields more than another.

●  Harvest Labor: Of labor activities and of all costs in general, harvest labor was significant across the board. This indicates that the harvest process is a great potential place to seek further efficiency. As one of the main activities on a flower farm and one that takes significant experience to master, many farm owners would be wise to invest time and energy seeing how they can improve their team’s harvest efficiency for their major crops.

Lessons Learned From The Farmers:

From Erin McMullen, Raindrop Farms:

●  One thing that really came to light for me was how much my team was interested in the time study process. At first I tried to do it on my own, but once I pulled some team members into the process, they got really excited about it.

●  Once we had the data from the time studies, it really helped me plan my day on the farm and to better plan and schedule my team’s day on the farm. We were better able to make use of our time.

From Shanti Rade, Whipstone Farm:

●  Even if you’re making a few educated guesses throughout the time studies process, you’re getting much more good information than you otherwise would. It helps you break it down and really go beyond your assumptions, rather than just trying to sit back and guess how profitable your dahlia crop might be, for example.

●  Looking to increase your marketable yield is a great way to increase your contribution margin. How can we cut down on loss from the field to the cooler?

●  We know that even a high contribution margin across crops doesn’t necessarily mean a profitable farm, if you have really high fixed costs. So one way to do better as a business might be to increase production of your successful crops, as long as your market can bear it, the goal being to cover more fixed costs with a larger share of crops with a high contribution margin.

From Gina Strathman, Longer Table Farm:

It’s hard to remember to do your time studies! In particular, remembering when to STOP the clock could be a challenge. I recommend starting as early as possible in the season, so if you forget to track something, you have multiple opportunities.

From Michelle Elston, Roots Cut Flower Farm:

My biggest lesson was that, even if a crop was wildly successful for me, my harvest and post-harvest labor was still around 50% of my total labor cost. This really hit home for me that it’s where I need to focus my energy, and my team and I are now inspired to work on our efficiencies and speed in those areas. This is where we can have our harvest gains.

——————————————————-

This material is based upon work that is supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, under award number G380-22-W8613 through the Western Sustainable Agriculture Research and Education program under project number FW22-395. USDA is an equal opportunity employer and service provider. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture.