A Farmer’s Guide To A Pick-Your-Own Operation

Pick Your Own

From A Farmer’s Guide To A Pick-Your-Own Operation (University of Tennessee Extension)…

“Producers interested in a PYO should analyze whether or not market potential exists before developing the enterprise. Farmers should conduct a market analysis to determine if a potentially profitable market exists for their PYO. Producers should be able to investigate and answer the following questions to help them determine whether there is market potential for a PYO:

»  Is there a need in the marketplace for a (or another) PYO? Are there customers interested in picking their own product?
»  Can these customers be identified and reached through promotional efforts?
»  How much product is a typical PYO customer likely to purchase a year?
»  Which types of promotional efforts are likely to be needed and how much will they cost?
»  How much are customers willing to pay for a PYO product?
»  What other sources of local products currently exist?
»  What are the characteristics, strengths and weaknesses of competition (other PYOs and other sources of similar products)?
»  What other opportunities or threats, such as regulations, exist in the marketplace that may affect PYO sales?
»  Is the producer likely to be able to produce at a cost low enough and sell enough product at a price high enough to generate a positive net return/profit?

Financial Analysis

Before deciding to produce and market products through any market channel, producers should evaluate the potential profitability of the venture. This includes estimating potential revenues and subtracting estimated costs associated with the enterprise.

When estimating revenues from PYO products, producers should consider how much product is likely to be produced, the number of customers they may expect to visit, the typical amount of product customers will likely purchase and the estimated price of the products. The potential income from the sale of non-PYO products should also be estimated.

Producers often concentrate mostly on production expenses when estimating costs. In addition to estimating the cost of producing crops for PYO, producers should estimate other
costs likely to be incurred by the enterprise.”

Download the full guide here.

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