The Tricky Business of Running a CSA

Jun 13, 2013

A regular supply of fresh, locally grown produce is the expected return from investors in a CSA farm.
A regular supply of fresh, locally grown produce is the expected return from investors in a CSA farm.

Within the local food movement, the community supported agriculture, or CSA, model is praised. It’s considered one of the best ways to restore a connection to the foods we eat. Consumers buy a share of a farmer’s produce up front as a shareholder and then reap the rewards at harvest time. But as Harvest Public Media’s Luke Runyon reports running a CSA can bring some tricky business decisions.

Meghan Williams bounds across a grassy hill, toward several rows of green shoots coming out of the ground.  “I just want to check out this garlic...”  She bends down and plucks one stalk, bringing it up to her mouth. “We’re at the farm, standing in front of the garlic, which is really sweet.”

Williams and her boyfriend Michael Baute began this small vegetable farm in Fort Collins, Colorado last year.  Both had farmed as apprentices before, but wanted their own space, and their own business.  Baute notes, “People ask if we’re married and we say, ‘Oh no, we’re way beyond that, we own a small organic farm together.  You spend a lot of time on the farm and there’s not a great margin, profit margin, so in the beginning it’s definitely a struggle.”

It’s a struggle many small business owners will understand. But running a small farm comes with unique challenges. Baute and Williams decided to split their business in thirds. One third of their produce goes to the farmer’s market. Another third is sold to local restaurants. And the final piece of the pie feeds their 35 CSA shareholders. Local folks sign up at the beginning of the spring, write a check to the farm and hope for a good year, right alongside the young farmers.  Williams explains, “Like the stock market, you can have a good year or a bad year. Sometimes it pays off and it doesn’t pay off in money, it pays off in food.”

Dawn Thilmany, a professor of agricultural economics at Colorado State University, confirms that starting and running a small farm is inherently risky. About ten percent of farms go out of business each year.  “The CSA model is probably the deepest commitment a customer can have with a farm, but it’s also very difficult to run well.  It’s just a richer relationship.  And any time there’s a richer relationship in any form, but mostly in business, it’s going to mean you have to do a lot of planning to make sure you can honor all of your promises.”

That’s one of the biggest concerns when running a CSA, the promise. Here’s why: CSAs allow a farmer to spread out the risk of running a small farm. Customers share a portion of the risk, whether it be in the form of late season frosts, pesky bugs or hailstorms. Thilmany says small farms can usually communicate that risk to members, a tougher task for bigger farms. One bad season could sour even the most loyal members.  THILMANY: “Once you have a ding on your record that someone was disappointed, it’s really hard to get your reputation back.”

John Hendrickson studies small vegetable farms at the University of Wisconsin. He conducted a survey of farms that were using the CSA model back in the late 90s. When talking to those farmers, he found the biggest challenges came when they started to grow the farm, to begin making more money. He says problems came up not just on the customer service side, but on expanding the farm’s operations.  “There are very serious challenges as you scale up any kind of farm.  It’s fairly easy to fall into a trap of growing larger than you intended even in the very first season.”

Hendrickson says it’s tempting to expand quickly when the weather’s cooperating and customers are clamoring for a CSA share. It’s easier to manage weeds and harvest and pack produce from a four acre farm than from a four hundred acre farm.  That’s where the you-know-what hits the fan sometimes and growers realize that, gulp, I expanded too quickly.”

Another problem is the lack of reliable data on what works and what doesn’t. The U.S. Department of Agriculture is starting to take notice of innovative local food systems. They’ve commissioned a nationwide survey of CSA farms, with forms going out this year.

Back at Spring Kite Farms in Fort Collins, Meghan Williams and Michael Baute say they’re taking the “slow growth” approach. They just barely broke even last year, without giving themselves a paycheck.   But Bautes isn’t looking for big financial success.  “Part of our philosophy, and this is incredibly idealistic and romantic and I know that. But there’s more ways to quantify success than just maximizing economic gain. And so for us to be out here with our dogs and make our own decisions, that’s success.”  He adds that as long as they’re making ends meet, a small CSA works just fine.”