Elmwood Stock Farm has not been immune to inflation and supply chain issues — they have recently been forced to raise prices on many of their meats and vegetables — but co-owner Ann Bell Stone said they have not been hit has hard as many commercial farms because of their business model.
Rising interest rates have farms across the country concerned about how they will finance next year’s growing season.
Many farmers rely on loans in the spring to purchase seed, fertilizer, and fuel upfront, months before their produce will be ready to sell, but Stone said as a community supported agriculture (CSA) farm, Elmwood is able to raise capital through their customers rather than through a bank and doesn’t expect to be impacted by rising interest rates.
“I think interest rates do have an effect on the overall economy but because a large portion of our vegetable production is the CSA program, our actual CSA members are shareholders who act as our financier and act as our banker,” she said. “When they’ve committed to the CSA program in the spring that allows us to use those dollars for all the startup costs.”
Additionally, because they are an organic farm Elmwood has not been hit as hard by the rising cost of fertilizers, which the USDA reports accounts for one fifth of the cost of most farming operations. The U.S. Energy Information Administration estimated the price of many fertilizer components had already risen between 150 and 240 percent between December of 2020 and December of 2022 and the USDA reports that the Russian invasion of Ukraine has exacerbated an already limited supply of fertilizers and expects a shortage could drive fertilizer prices up higher for 2023.
“I think that fertilizer costs do have a large impact on farms although on our particular farm because we are an organic farm and we work with livestock crop rotation we don’t purchase a lot of extra fertilizer,” Stone said.
The biggest cost increase Elmwood has experienced has been fuel, which is used both on the farm for farm equipment and to deliver their produce, and the farm has experienced unpredictable pricing on other supplies, she said.
“I think we noticed the access to items that we needed, as well as price changes and the irregularity of pricing pretty soon after the pandemic started,” Stone said. “Just getting access to materials and supplies seems to be pretty unpredictable. So sometimes we try to stock up on things. Sometimes we might try to go about it a different way, or maybe it’s different type of packaging.
“Egg cartons is an example of something that sometimes there’s plenty of supply, and sometimes they’re really hard to find. But that’s something we have to have, because we can’t sell eggs otherwise.”
Despite having had to raise their prices on many items this year, Stone said the response from their customers has been very supportive.
“I think we tried to hold off as long as possible on raising prices on any of our products, because we wanted to be fair and thoughtful about that type of decision,” she said. “We probably waited longer than lots of other businesses to raise prices. It’s actually done incrementally. So some of the vegetable prices increase. Some of the meat prices increase, but not every kind.”
Many clients have been surprised they didn’t raise prices sooner, Stone said.
“Everyone understands your prices are in line with what they’re seeing other places, and we’re all feeling the pinch together,” she said.
There have been some customers inquiring about buying in larger bulk and the farm has experienced an uptick in business at the Farmers’ Market, which is held each Saturday in the City Hall parking lot.
“The Georgetown farmers’ market has been booming,” she said. “This season is the busiest I’ve ever seen in over 20 years attending the Georgetown farmers’ market…the community has really come out and been super supportive and consistent even on rainy days.
“It’s been just really wonderful for the farms and for the other vendors that are local members.”
President Biden signed the Inflation Reduction act of 2022 into law on Aug. 16, an act that includes billions of dollars allocated to farming and conservation programs. While it’s not yet clear how the allocation will directly impact farms and reduce the costs to consumers, Stone said she thinks it will have a positive impact.
“I think every farm in the nation will benefit from that, especially my understanding is it’s going to help the farm bill that comes around every several years,” she said. “A lot of the programs that have been underfunded will possibly get the funding.
“So until there’s more information about what’s in it, we probably don’t know exactly how but my understanding is that every farm would benefit.”
