CHAPTER 7

Cut Flower Pricing

A s new growers eager to jump in and plant a

field of cut flowers, the selling often takes a
backseat to the growing. A crop that’s sown in
from another farm is ultimately not the data point on
which to make decisions that will determine the
profitability of your business. In fact, it’ll only delay
November finally comes into bloom in May, and you from maximizing financial returns, kicking the
then the new farmer works up the courage to offer it can down the road season after season instead.
for sale to a local florist. The only problem is they
haven’t given any consideration to the price. Insecure
about their product and completely unsure of the
going rate, they reach out to farmers across the coun-
try in a cry of distress.
A slew of pricing answers from well-meaning, often
also inexperienced growers comes flooding in. “In New
York State, I get $8 a bunch for my zinnias.” “Here in
California, we can only get $7 from florists.” “My
favorite customer in Georgia pays me $9 a bunch, but
the grocery store won’t budge past $6.” Well, the farmer
is asking the wrong question to the wrong people, and
these answers won’t be very helpful. For one thing, you
have no context for the pricing suggestions you receive
from other farmers. The farmers offering you answers
likely have wildly different experience levels, different
production systems, and different customers. If you dig
deeper into each farm’s specific situation, you may
realize you’re comparing apples to oranges.
How do you come to your price points for the
different crops you grow? By default, many farms
start with what’s known in microeconomics as
“competitor-based” pricing, which is just what it
sounds like: setting prices based off of what we see in
the marketplace. Although it’s important to gain an
understanding of the larger context of pricing, a price Photo by Roger Elliott

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Planning for Profitability

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 Cut Flower Pricing
Blindly adopting the prices set by other farms
doesn’t consider your own cost of production. The
only way to make a profit is to consistently price your
products above your cost of production (it’s right
there in the golden equation: Profit = Income −
Expenses.) Imagine a restaurant that sets its burger
price at $8 because that’s the going rate at the drive-
throughs in town. But suppose this restaurant sources
grass-fed beef and heirloom tomatoes and grills each
burger to order. How can they possibly come to a
reasonable price point without taking these costs into
consideration? It’s likely that by assigning that burger
an $8 price tag, they will actually lose money or barely
cover costs. Such is the plight of our local flowers.
Understanding
Local Flower Pricing
While it shouldn’t be your main data point for set-
ting your prices, it’s still important that you are in
touch with the going rate for flowers in your area.
Photo by Molly DeCoudreaux
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You need to know what prices florists are paying
locally so that you can understand how your crops
will be positioned in the market. If you’re in planning
mode, you can use this rate to sell your crop the first
time you grow it and to understand the potential
income a crop can generate.
I aim to make sure that B-Side is always pricing
our flowers either at or (hopefully) above the going
rate. In fact, I prefer to be priced significantly higher
due to my high cost of production and the quality of
my flowers. But in order to sell large quantities, I
need to have a sense of what the market can bear.
This pricing awareness also helps me to make crop
planning decisions. We’ll turn to crop cost of pro-
duction in chapter 8, which will add to this
discussion. But for now, here is a basic example: If
high-quality dahlia bunches are always sold to flo-
rists at a price between $10 and $15 in my area, and I
learn that I would need to sell mine for $25 a bunch
to make a profit, I might decide that dahlias aren’t a
good crop for me to sell to florists.
 Planning for Profitability

THE FLOWER DOLLAR

A BREAKDOWN OF EVERY $1 SPENT
AT A SMALL FLOWER FARM

INFRASTRUCTURE
& MACHINERY
MONEY LEFT EMPLOYEE
TO REINVEST IN BUILDING THE
PAYROLL
FARM
FAIR, LIVING WAGES
FOR FARM WORKERS

$ 0$ 0. 1
. 10
0
$0.20

PROFIT
THE PROFIT LEFT $0.25 $0.15 LAND COSTS
OVER TO PAY THE THE COSTS TO
FARM OWNER'S LEASE/OWN THE
SALARY FLOWER FIELDS

$0.15
$0.15

ADMIN. COSTS
SMALL BUSINESS COSTS:
INSURANCE, PERMITS,
BOOKKEEPING & ACCOUNTING
FARM SUPPLIES
BULBS & PLANTS, COMPOST &
FERTILIZER, GREENHOUSE &
IRRIGATION, DISEASE CONTROL
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2022 LENNIE LARKIN / FLOWER FARMING FOR PROFIT

 Cut Flower Pricing
The Flower Dollar
As a general trend, new flower farmers in recent
years tend to price their flowers too low in retail
settings. On the whole, we all must raise our
prices. Our farmers market, farm stand, and
wedding customers are as in the dark about our
costs, work, and income level as we are about
the inside mechanics of dentistry or plumbing
or nuclear fission. They will never know how
slim our actual margins are. To further com-
pound matters, they’re used to buying flowers
that they may not even realize are imported
and grown with practices they wouldn’t choose
to support if they were informed. So, it’s up to
us to both set appropriate prices and clearly
communicate how we are different.
I had great success creating a poster I
titled “The Flower Dollar” and displaying it
The best way to learn the local going rate is to get
on the mailing list for your local wholesalers (and if
you can’t find any, you can at least refer to the Boston
Ornamental Terminal Price, which is available at
https://usda.library.cornell.edu/concern/publications
/b2773v71t and updated weekly). Here in northern
California, I get weekly emails with price lists from
both Torchio Nursery Company and Mayesh
Wholesale Florist Inc., the two biggest wholesalers
at the San Francisco Flower Market. While bunch
sizes, stem length, and regional differences might
lead to different listed prices, these lists are still good
resources that help me in a number of ways.
While these price lists are a great way to find out
what your local florists are paying, the pricing you
find will likely be from much bigger farms. The
huge, established farms that have been supplying
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in my farm stand. This poster provides a
breakdown of a small flower farm’s general
financials, both to show customers the
different expense categories we have in our
businesses and to illustrate the fact that the
profits are slim. I incorporated customer
feedback over the years and adapted the
poster to better address gaps in customer
understanding, using language they use and
shifting the percentages to better reflect
small-farm averages in general rather than
those from my farm alone. This allowed me
to share the poster with farmers far and wide
and feel confident that it represented their
businesses, too. This poster is now displayed
in most of the farm stands in my old county
in California.
these wholesalers for years are likely set up quite
differently than your farm or mine. The larger and
more established they are, the more likely they are to
have a lower cost of production, allowing them to
consistently sell their flowers at a lower price point
than the rest of us can afford. Part of this is due to
what’s known as “economies of scale.” A large farm
can ultimately spend less on bags of fertilizer because
it’s able to buy the bags in huge bulk purchases. The
smaller farm doesn’t need the bulk amounts, so it
buys them one bag at a time. Same goes for bulbs.
The price per tulip bulb decreases from the supplier
with the more you buy. This allows the larger farm to
have a lower cost of production than the tiny farm,
and therefore they can sell the same finished product
for less money and bring in the same amount of
profit (all else being equal). It’s both a thing of
 Planning for Profitability
mathematical beauty and a source of great frustra-
tion for the little guys.
A farm should only compete on price if their
production costs are drastically lower than the best
farmers in their area. But the farmer can understand
their positioning in the marketplace only if they first
learn their costs. And for the majority of small, sus-
tainable flower farms, we’re never going to compete
on costs of production.
So where does this leave us? Small farms shouldn’t
be comparing themselves to huge farms, and they
often have different things to offer. For most of us, we
have the unique selling proposition of offering pris-
tine, sustainably grown, locally produced flowers that
are sold so close to home they’re undamaged by the
modes of transportation utilized by the crops grown
farther away. It’s a different product altogether.
Disrupting the Old Guard
It doesn’t always feel easy to ask for the price you
need. As growers, we’re but one player in a larger
ecosystem: the cut flower supply chain. And for better
or worse, it has some deeply entrenched norms and
expectations. But we must remember that our goal is
to produce a bunch of flowers and sell them for the
price that represents the largest possible delta from
our production costs. The buyer has the same goal in
order for them to keep their business afloat and sell
up the chain. At every step, each player should be
covering all their costs and then making their
intended profit. We all assume that every buyer and
seller makes decisions based on this self-knowledge.
When new farmers enter the market without
enough business background to play by the same
rules, there are far-reaching implications. Most of
your wholesale customers have a deep understanding
of their own costs. Therefore, when they agree to pay
a certain price for a bunch of flowers, they do so
knowing how their own markup will translate into
their desired profit margin. They’ll naturally assume
that you’re acting with the same information and
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going through the same process. They’ll take it as a
given that you know how much it costs you to grow
a particular flower. Really meditate on this for a
moment. These customers typically revere and
respect flower farmers and know that it takes a huge
body of skill and knowledge to grow the flowers that
we grow. But they take for granted that we must be
as intimately familiar with our costs as we are with
our soil. This couldn’t be further from the truth for
many a new farmer. Most of us are just winging it!
This means that any time they question, haggle
over, or decline a price is based on previous experience
with older, established farmers who likely understood
their own costs (and, incidentally, likely benefited from
economies of scale). You can’t blame these wholesalers
and florists for playing their part of the game.
The problem is that this leads to an unsustainable
ecosystem in the place we care about the most: our
local market. Well-intentioned florists buy flowers at
below-the-market rates from farmers who sell at
that price because they’re new, uninformed, or hop-
ing to grow their business by sales of any sort. These
farmers eventually either raise their prices or, more
likely, barely scrape by for a few years before going
out of business. It’s not in the interest of the florists
to help farmers go out of business, as they want to
have dependable relationships with growers.
The difference between the money you should be
getting and what you’re selling for (based on some
form of competitor pricing) is going directly into the
florist’s pocket and out of yours. If you raise your
bunch price by $1, they may absorb this and still be
healthy. Or they may pass this on to the consumer,
who’s happy to pay the higher price. Or they may
absorb 50 cents and raise their prices 50 cents. Or
they may decline the purchase. Maybe that leads you
as the farmer to realize that you need to stop growing
an unprofitable crop.
As flower farmers, we know that the old-guard
system of cut flower commerce is unsustainable on
so many levels and isn’t as rosy as it may appear on a
supply-and-demand graph. We know it encompasses
Cut Flower Pricing

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 Planning for Profitability
Photo by Molly DeCoudreaux
loads of negative externalities (environmental or
social costs that aren’t accounted for in the price or
sale); that the traditional range of price points at the
bottom of the chain is based on production systems
that exploit cheap labor, chemical inputs that destroy
farmland, and input costs that have hardly risen with
inflation, much less rising costs of raw materials. If
farmers were able to sustain their businesses over the
past 40 years with prices as low as we’ve seen at
market, then they were likely built at least somewhat
on the backs of some abhorrent practices.
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Businesses that seek more just alternatives and
actively avoid exploitation of labor and resources will
face a harder road on the path to thriving financially.
Small-scale, sustainable flowers just cost more to
grow. Luckily for us, consumers are increasingly
seeking not just local flowers but products and ser-
vices based on values they support. But they haven’t
always had the dots connected to illustrate the need
for higher prices.
There’s nothing more infuriating for me than
greenwashing in our industry, exacerbated by flo-
rists and wholesalers touting local sourcing to their
customers, yet refusing to offer us good prices for
our product. But as I’ve shown above, these
hard-working middlemen aren’t acting out of malice;
they’re acting with missing information that can be
traced back to the farmer’s lack of understanding of
their business. If we price our products artificially
low because we don’t know how much it costs us to
grow them, and our customers simply carry on with
business as usual, we’re the ones deflating the flow-
ers’ value from the very start. Unless farmers start
figuring out their cost of production and charging
prices based on desired profit margins, they’ll keep
accepting low prices and keep driving this race to the
bottom. Our costs need to be accounted for and
carried up the supply chain proportionally.
So, where else should these increases begin but at
the bottom of the chain, with the flower farmer?
And how else can we edge toward this new system of
compensation but with learning about costs of
production in flower farming? Learning your own
farm costs will not only help you improve your
systems, fine-tune your crop plan, and confidently
seek higher prices, but it will also help strengthen
our industry as a whole.