Farm-to-Hunger Relief Programs: Sales Pricing
A major economic advantage for a farm to enter into a purchasing contract with a hunger relief organization (HRO)–food bank or meals program–is that a HRO provides a more flexible market than traditional wholesalers (e.g. hospitals, schools, grocers). For newly established relationships between a farm and HRO, Harvest Against Hunger (HAH)’s Farm-to-Food Pantry (F2FP) and King County Farmers Share (KCFS) programs have favored allowing the farm to set the prices of produce, based on what supports them best, as long as prices are generally reasonable for the HRO’s purchasing budget. Some farms with a history of selling into hunger relief programs may already have a set price discount for nonprofits.
However, after a few seasons of building a stronger relationship with a farm, in which flexibility and clear communication expectations are established, a HRO may consider expanding the conversation around pricing. For example, a farm may be able to offer more flexibility on pricing for larger orders. If the HRO has not yet raised the possibility of purchasing seconds produce at discounted rates–especially for meals programs with processing capacity–HAH encourages this conversation.
A HRO may also consider developing a predetermined preferred price list of what they are willing to pay for various types of produce for farm purchasing. Being able to present this tool to farms can simplify negotiation work–especially for agencies that manage farm purchasing for multiple food banks–and gives the HRO more leverage with their purchasing power. In particular, giving a pre-set price list to a farmer as they plan for the season can help their planning; they may be more interested in growing a certain crop for a HRO if they expect a higher return for it. This example was developed by F2FP agency partner Nils Johnson for the Northeast Washington (NEW) Hunger Coalition. These costs were developed by:
- Taking 50% of a farmers market retail price, which would be considered a high-end wholesale price
- Adding or subtracting 10% for factors like consumer preference, nutrient density, and rarity. Essentially, the aim is to incentivize or de-incentivize being sold certain crops.
For example, if an HRO is less interested in buying the produce they already receive in bulk from federal food donation programs, such as potatoes and onions, they would offer to pay less. However, more weight can be given to more culturally relevant produce, like bok choy or okra, or to specialty ingredients that are rarely found fresh in food banks, such as fresh herbs and garlic. Other factors influencing HRO user preference to consider include familiarity, storage life, and ease of preparation. Therefore, it is valuable to use surveys to determine produce preferences of HRO users. Using a binder of photos can be a helpful tool for adapting around language barriers as well as less commonly-known produce.
King County Farmers Share VISTA Gayle Lautenschlager developed a report comparing overlaps in Naturally Nutrient Rich (NNR) scores, food bank user preference surveys, and unit costs of produce; the produce that performed highest across these combined factors were dark leafy greens, bell peppers, head lettuce, and cauliflower.
Ultimately, the pricing conversation between farm and HRO should come from mutual understanding of the needs and financial limitations of each party with the same goals of increased access to healthy whole foods for all.