Produce auctions compares to hunts point market

BenW523December 22, 2011

Hi, my name is Ben and I am new to the produce buisness.

I am trying to start a produce buisness and wondering is it cheaper to get produce from amish produce auctions or from terminal markets like hunts point? I also would like to know the qualities and buisness doing differs in both places. I really appreciate your responses and thanks alot!

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cowpie51

Ben, are you going to sell out of a storefront? Are you going to grow any of your own produce? Are you going to use Farmers markets? Please give us some more information to work with and maybe somebody on the site can help you. Mark.

    Bookmark   December 22, 2011 at 10:05AM
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myfamilysfarm

No matter what venue you will be using to sell, it depends upon if you want to know how much you will be paying before you arrive and what is available. With a broker, like hunts point or any other non-auction place, you will be able to place an order then they will be able to give you a rough idea of how much per item you will pay. With the auction format, no matter who is running it, you will have to pay what the market(at that place/time) will bear. If there is alot of one type of produce, you might be able to get it at a lower price.

I've done both, and if there was a broker close to me, I would use them, at least to determine the prices that I would want to 'beat'.

With my Amish friends, I know that I'm getting fresh picked that day. There are 'English' that sell at my auction, that don't sell fresh picked produce. I've been there long enough to know who is who and how they operate. This takes time and the effort to get to know the people selling.

Your choice is up to you, and being new to the business, you will learn it over several years.

Marla

    Bookmark   December 22, 2011 at 12:43PM
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BenW523

Thanks for the replies guys. Mark, by the way I am into the wholesale buisness because my father already has a produce company that sells to the ethnic supermarkets around New York Area. I am trying to take advantage of his base and buy produce and resell it to him. I am thinking about getting produce from Hunts Point Market which is closer to me. But, I do think sometimes auction offers deal you cant find and is worth the distance. Also his volume is pretty good for me to buy a large lots of produce as long as the quality and price are comparable to others.

Ben

    Bookmark   December 22, 2011 at 2:26PM
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myfamilysfarm

Ben, since you already have a background in the produce wholesale, you can ask your dad alot of these questions. From what I understand, you will just need to find those farmers that need an outlet. If there is an Amish auction near, then that will be your way to buy Amish. Most of the Amish will use the auction only, if there is one near. Also, most of the Amish that I know, will not appreciate a wholesale buyer approaching them AT their homes. You will be better off approaching them at the auction, but expect to buy THRU the auction and NOT make deals on the premises. By trying that, you might be asked to leave and not come back. If that happens, kiss buying from any of that community goodbye.

You might find some farmers that don't want to transport their produce to the auction, Amish or English, but if there is a strong farmers market, you will have a rough time convincing them that you will be a better deal for them.

Good luck in your ventures.

Marla

    Bookmark   December 22, 2011 at 3:23PM
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BenW523

Marla, thank you for you replies. My dad is in the buisness but he acts more like a broker and a middle man between a larger wholesale produce company and the supermarkets. He isn't very familiar with the direct purchase from the farmers. So, I am wondering if I should go directly to the farmers and buy from them, so I can provide a bridge between the supermarkets and the farmers. I hope you can provide me further details on how the auction works and what should I expect from it. I mean produce price changes everyday, but as long as we can get it cheaper or better quality than our competitors then theres buisnesss. I believe most of my competitors has a contracted buisness with other farms and others buy from Hunts Point. I really appreciate your time Marla!

    Bookmark   December 23, 2011 at 12:53AM
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myfamilysfarm

With my auction, you will definitely get fresher, but not always cheaper. And YES the prices change from auction from auction. My auction, during peak season, has auctions 3 days per week. There are several grocery stores that come to our auction, mostly smaller IGA type of stores. You will never know from day to day, what you might get at what price. Example, one day you might be able to buy tomatoes at $1/20# box, and the next day it's $10/20#. It really depends upon what quantity is at the auction, and who has come that day. We have 1 buyer that comes to mind, he can and will buy at a much higher price than anyone els. He has a higher priced stand, therefore can spend more. He also has several outlets, so when he wants something, the rest of us might as well give up. Other days, he comes to dump some items that he has bought from a wholesaler and the items are just not selling fast enough for him. It's really a guessing game with an auction.

As far as quality and freshness, you will learn who has quality thru-out the box and who will put some less perfect items under the pretty ones on top. Every auction will have some people that try to get away with this. Other's product might look really good, but a day or so down the road, their stuff is already rotting. And some will keep beautifully.

Just don't expect the get everything right for a few years, I've been at this part of the business for over 6 years now, and still some people get the better of me.

If you have specific questions, ask and I'll try to help what I can. I had a few people help me out when I first got started, so surely I can help you out.

Marla

    Bookmark   December 23, 2011 at 2:50PM
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BenW523

Thank you for your help Marla. I really appreciate it. I am wondering Marla, what kind of volume does your auction handle and is it cheaper to buy from an amish auction?
I have heard that amish auction offer prices that english farmers cant compete, so please enlighten me. If you feel comfortable disclosing your location, I would love to tour and buy from your auction. Happy belated Christmas by the way :)!

    Bookmark   December 26, 2011 at 8:43AM
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myfamilysfarm

The auction that I'm talking about is run by our local Amish community. 2 years ago, their volume in sales was approximately 4-5 million. I don't believe that Amish auctions don't allow English compete with them. We have several English growers that sell at our auction. The auction that I call mine is in Indiana, and it runs from April to October for produce. Also have weekly auction for Hay/Straw from Nov to April.

If you search the internet, there will most likely be one closer to you. Keep in mind that the auctions run during peak times of the season. I know of at least 4 within driving distance of me, 3 run by Amish and 1 English.

I don't want to discourage you from visiting us, but you should be able to find ones closer to you. Keep in mind, that you would need to provide the transportation from the auction to your place of business. Auctions are not set up for that.

I believe you are in the NY area, whether in the City or State, I don't know. I do know that 1 auction in PA sells produce to markets in NYC, just not positive which auction.

Start doing the research on the internet now, before the season starts. I know that there are broker/outlets in Chicago/Benton Harbor, MI and St Louis, MO, but haven't done much business with them.

Marla

    Bookmark   December 26, 2011 at 11:26AM
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BenW523

By the way Marla, happy new year :). Thank you for the informations, but I am wondering in terms of pricing, can auctions compete with wholesale distributors? I have done research on most of the auctions around my area and planning to check them out soon. Most of the auctions near my area does not offer high volume except vineland. Since most are closed during this time of the year, I am curious about the prices auctions offer for the large volume I can digest. Most of the wholesale distributor get their produces from the south,west, and mexico. I am wondering which certain produce offers some of the better pricing and quality at your auctions than out of states produce? I know quality determines the price, but if prices at auction are near retail, then it wil be hard to sell at wholesale.

    Bookmark   January 6, 2012 at 1:19PM
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myfamilysfarm

Ben, happy new year back to you.

During season, the prices will be cheaper, but not in season, not. There are times that the auction will be retail or sometimes even above. Alot of that depends upon who is at the auction and what they want. We have several local people that attend our auction especially during canning season. People go together and buy larger quantities.

The auction way of buying things will always fluctuates and you will never know what price you will pay. If you want consistent prices, you're looking at the wrong field. Even the wholesale brokers' prices will fluctuate with the supply/demand.

As you probably already know, from your dad's experience, things are always changing. You will need to be able to adjust your prices on a daily basis. If you won't or can't, you will not stay in business.

Marla

    Bookmark   January 6, 2012 at 1:37PM
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BenW523

I understand that price changes with the supply/demand. I have been able to contact some of the auctions and the volume they are offering is very low, and most of the produce are not locals for this time of the year. The price I saw from the market report at one of the auction was pretty decent while some are not. I have todays invoice paper that we paid for our produce.
Heres some of the list.
broccoli 20lb box for $10.00
tomatoes 25lb box for $12.00
carrots 50lb bag for $11.00
red pepper 1 1/9 bushel for $33.00
spinach 2 dozen bunches for $21.00
Lemon #115 box for $25.00
Celery dozen count for $15.50
Green Onion 4 dozen bunches for $16.00
This is what we paid today for some of the produces. Marla, what do you think of the price we paid for this time of the year?
Do you think if I go straight to the farmers, I can get some better price? Thanks in advance.

    Bookmark   January 7, 2012 at 4:23PM
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myfamilysfarm

In my opinion, your prices was very good.

Of course, around here, you would never find Lemons or very seldom Celery.

Red Peppers might be alittle high, but that's for all red and at this time of year, not bad.

If that invoice is normal, then you're better off, price wise, with the source that you have. Only difference would be freshness and with the freshness=taste.

Going to straight to the farmers, probably would not better prices. Just more local and again probably fresher. Each time that you can cut out a middleman, the fresher the produce.

Personally, I don't think you'll get better prices than what you got this week. I'm sure during the tomato glut season, those prices would be cheaper than this invoice.

There are plenty big time farmers that have contracts with wholesalers. I've bought from them, but found that the taste wasn't as good as the smaller growers. Most likely, it was varieties. Alot of varieties are just NOT right for shipping, and most of those varieties don't have TASTE.

Good luck, but I think you'll be better off doing what you're already doing. Keep your eyes open for good deals, but don't expect them to happen often.

Marla

    Bookmark   January 7, 2012 at 5:46PM
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BenW523

So, Marla you don't think I can find better price from the local farmers than the distributor? At this point, I am thinking about helping my father expand his business. In order to do that, I am looking for a way to cut distributor out on certain produce. Like you said I guess its hard for the local farms to compete against out of state all season farm like florida,california,and mexico. I still believe proximity is an advantage and if given the right circumstance it will bring advantage. But, I guess I just need to do more reaserach and get in contact with the nearby farmers.

    Bookmark   January 7, 2012 at 6:30PM
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myfamilysfarm

At the prices that you posted, I don't think most farmers would sell at those prices unless they didn't have somewhere to sell at.

Do contact the growers and possibly set up a contract with them, now, during the off season. This is the time that they decide what and how much they will be planting.

Most of the time, the wholesalers are a cheaper way to go, but the taste, freshness and quality isn't there.

I guess it is up to you to decide between quality and price, like everything else. Your dad might have customers that would prefer having local produce and willing to pay a higher price for it.

Marla

    Bookmark   January 7, 2012 at 7:42PM
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BenW523

Thank you for the answer Marla. You really helped me alot.
I guess, I just need to do more research and find a way to take advantage of the nearby commercial farm or terminal market.

    Bookmark   January 7, 2012 at 8:12PM
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