How do I check what share of a farm market’s goods are grown on site?
Compare what is grown with what is sold. Walk the fields, ask for planting and harvest records, then match them to the purchase invoices and the shelves. The gap shows how much is bought in and whether the market’s claims match its practice.
Start with a simple question: how much could this land actually produce? Walk the fields, look at what is planted and ask for the seller’s planting and harvest notes. Then list the main products on the shelves and tick off those that your walk and the records could plausibly account for. The leftover items are probably bought in.
Next, confirm it on paper. Purchase invoices for the full season, sorted by supplier, show what was brought in. Compare the cost of those goods with total sales to see how much of the income depends on resale. Ask your accountant to read the cost of goods sold with you, because it reveals how the margins differ between homegrown and bought-in items.
Finally, look at how the market describes itself. Signs, social media and labels all make claims. If customers are led to think everything is homegrown when it is not, the business carries a reputation and compliance risk you should discuss with your lawyer before you buy. A seller who is open about the mix is usually easier to deal with than one who dodges the question. Ask the seller how the mix shifts between early and late season, since bought-in goods often fill the gaps when the fields are bare.
Key takeaways
- Walk the fields and estimate what the land can really produce.
- Match purchase invoices to the products on the shelves.
- Review the market’s signs and labels for claims you cannot support.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is the cost of goods sold (COGS)
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat is inventory
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