In Full Disclosure – a word on pricing and our financial challenges-
Dear valued customer,
If you’ll recall, in a short enews article on October 23, 2019, we shared the following:
Due to an ongoing financial struggle, we’ve been taking a hard look at profit and loss data of each individual enterprise (i.e. dairy, beef, chicken, etc.) that makes up the whole of our farm. To do this, we had to be quite forthright and uncompromising, making sure each enterprise supports itself. Unfortunately, we discovered that dairy and eggs were being supported by other more lucrative parts of the operation, and made the decision to raise the price on those items. We hope this doesn’t discourage you from continuing to purchase the best in grass-fed dairy and pasture-raised eggs, and welcome any feedback you may have. Our goal is to be sustainable in every way, but have come to realize that if we’re not financially sustainable, we’re not sustainable at all. While we dislike inflation and price increases, we detest cheap industrial food more.
The uncompromising “hard look” we were forced to take on the financial side of the business was born out of dire need. While finances have never been easy over the past 5 years, in the past 10-12 months we hit a “rock wall”, so to speak. We’re encumbered with debts, both public and private, and in 2019 we found it increasingly difficult to continue operation because of our inability to pay bills and faced the very real possibility of being forced out of business.
Because of this, in September we sought oversight assistance through our church-based lending institution. While they were unable to provide additional funding, they were able to assist us to a three man board of advisors (or directors), for which we’re very grateful. After several fact-finding meetings with the advisors, with discussions of various debt-relief options including liquidating our assets and going out of business, we realize that we’ve been underpricing ourselves.
Our intent in the direct-to-consumer food business is to make excellent food products available at affordable prices, and through the years we’ve always raised prices reluctantly. And while we still detest rampant inflation and price gouging, our advisors have helped us to understand that our products were not priced fairly because we were shorting ourselves on the profit margin necessary to sustain the business, which resulted in an increasing debt load and eventual demise of the business if we continue on this trajectory.
As I mentioned in the enews excerpt above, we increased prices on dairy and eggs, and after researching the true costs of our popular grassfed grass-finished beef and pastured pork, increased prices on some cuts of it as well. As of January 10, we’re making a few additional changes to prices, primarily on the dairy side. This will include a seasonal dairy price to reflect our higher cost of producing milk in the winter. During the spring, summer, and fall, milk production in a grass-fed dairy if relatively easy and allows us to market the products at a lessor price due to lower input costs. But in the dormant season (November-March) when we purchase hay to feed the cows (to the tune of $25,000 over 5 months), we’ve been marketing milk at a loss. Therefore, we decided on a seasonal increase of milk to $7.50/gallon during the winter months to reflect the true cost of production. Prices will be reduced again starting April 1. These changes may or may not affect the price of other dairy products as well.
Please know that we do not raise prices solely for the sake of paying our sizeable debts or to provide more personal comforts for our family, but much more to create a truly sustainable business with the wherewithal to serve you in the future. While the past several months have been very emotionally trying—as well as humbling—the oversight and accountability of a third party advisory team has been a tremendous blessing, and as we continue to work toward a truly sustainable pricing structure we will do all we can to serve you to the best of our ability. Thank you for your continued support, it is deeply appreciated. Feel free to contact us to comment on what we’ve just shared.
Freedom Acres LLC