Community supported agriculture (CSA) is an economic game changer for a small produce farm. Unlike some commodity crops where a grower can sell futures if the price is right in the spring, fruits and vegetables rarely bring money onto the farm until they are in the hands of a buyer. Even then farmers often have to wait to get paid; sometimes until after the produce is already consumed! A small farm selling fruits and vegetables locally at farmers markets and to restaurants and grocers generally receives payment as the produce changes hands or two to three weeks later when a check arrives in the mail.
This presents a cash flow challenge each spring when expenses are high but no fruits and vegetables are yet ready to sell. The chart below represents what our revenue and expenses would have looked like in 2015 (at Field Notes Farm) if we had sold all of our produce at farmers markets. Without CSA we would have needed a half-year of expenses in the bank just to make it to the first radish!
The next chart reflects the same total revenue and expenses from 2015, but includes the approximately 40% of our revenue that comes from CSA. By signing up in the spring, our members cover our expenses when we have them. Also notably, with CSA we are able to start paying ourselves for our work in the spring rather than half-way through the summer when we would otherwise catch-up.
Going further, too much reliance on farmers’ markets can be a big risk for a small farm. On a good year, every Saturday is sunny and warm and people show up to shop. On the other hand, occasionally a few too many market days end up being rainy and/or cold and only the most dedicated market-goers show up to buy food. So, not only does CSA membership cash-flow the farm, but CSA is a significantly more stable method for planning production and distributing food.