Exploring CSA

Research and Extension Insights

Adapting	Community	Supported	Agriculture	to	

Modern	Markets	– Where	is	it	Working?1

Tim	Woods	– University	of	Kentucky,	Ag	Economics

Debra	Tropp	– USDA	Ag	Marketing	Service

Overview	–

A	national	survey of	CSA	operations	was	conducted	to	specifically	explore	how	CSAs	are	adapting	the	

traditional	CSA	business	model	and	how	these	modifications	seem	to	be	affecting	the	profitability	of	the	

operation.		The	survey	was	conducted	in	late	2014.		Detailed	results of	this	study	will	be	published	in	the	

spring	of	2016,	but	the	summary	of	initial	analysis	presented	here	is	based	on	a	poster	presentation	

shared	at	the	Agricultural	and	Applied	Economics	Association	meeting	in	2015.		The	link	to	the	poster	is	

provided	at	the	end	of	this	piece.

The	quick	view	–

Business	practices	and	changes	were	examined	in	over	400	CSA	operations	nationally.		CSAs	have	changed	

in	many	ways,	trying	a	variety	of	new	business	practices	with	a	view	toward	maintaining	participation	and	

economic	viability.		

CSA	Projected	Growth	–

Managers	were	asked	to	provide	some	measure	of	expected	growth	in	their	CSAs	over	the	next	two	

years2.		We	looked	at	factors	that	might	contribute	to	the	type	of	responses	managers	would	provide.		In	

our	model,	the	factors	that	helped	best	explain	expectations	of	future	growth	included	–

• Assessment	of	the	overall	strength	of	demand	for	local	products (+) – not	surprisingly,	in	those	

markets	where	demand	for	local	food	was	strong,	CSA	growth	outlook	was	also	positive.	 CSAs	

																																																							 1 This	national	CSA	manager	survey	project	was	funded	by	Agriculture	Marketing	Service	of	the	U.S.	

Department	of	Agriculture,	Cooperative Agreement	12-25-A-5660. 2 Specifically,	CSA	managers	were	asked	to	indicate	“How	do	you	expect	sales	to	change	in	these	markets	over	

the	next	two	years?”	with	the	option	of	“does	not	apply”,	“about	the	same”,	and	“increasing	sales”	for	CSAs,	but	

also	for	8	other	market	channels	where	local	products	are	typically	being	marketed.
2

remain	in	a	very	strong	position	to	be	a	leading	supplier	in	markets	where	local	foods	are	in	high	

demand.

• Age	of	the	CSA (-) – older	CSAs	tended	to	be	less	likely	to	report	strong	two	year	growth	

projections.		This	may	represent	some	evidence	of	market	maturity,	or	it	may	also	be	the	case	

where	newer	CSAs	are	actually	trying	to	grow	and	older	CSAs	have	reached	their	target	capacity.

• Multi-farm	marketing	collaboration (+) – where	farms	were	marketing	their	CSA	in	collaboration	

with	others,	CSA	projected	growth	was	higher.		CSA	farms	based	on	an	individual	operation	often	

have	limited	production	and	marketing	resources.		This	is	not	to	say	there	aren’t	advantages	to	

maintaining	control	of	the	CSA	as	an	individual	farm.		Branding,	production,	quality	standards,	

profit	sharing,	and	management	responsibilities	are	common	challenges	facing	multi-farm	CSA	

operations.			Still,	many	farms	have	found	ways	to	make	multi-farm	operations	work	and	create	

opportunities	for	growth.		Such	arrangements	can	allow	for	specialization	and	opportunities	to	

capture	important	scale	and	scope	economies	as	a	group.

Table	1	shows	expectations	of	sales	changes	by	CSA	managers	over	the	next	two	years.		While	54	percent	

indicated	an	expectation	of	increases	in	CSA	markets	– the	most	among	all	channels	-- the	CSA	was	also	

the	most	identified	as	a	market	with	a	likely	decrease	(11	percent).

Table	1.		Number	of	CSA	Managers	Expecting	Increased	Sales	in	Next	Two	Years,	by	Market	Channel

CSA	Profitability	–

Managers	were	asked	to	indicate	changes	in	their	CSA	sales	and	profit	over	time.		This	was	measured	

across	a	number	of	indicators,	including	a	specific	reference	to	“Overall	profitability	of	CSA.”	A	model	was	

developed	to	examine	differences	in	manager	responses	regarding	the	overall	profitability	and	its	

connection	to	operational	practices	and	the	marketing	environment,	identifying	the	following	indicators	as	

the	key	contributor	to	– or	detractors	from	– overall	profitability.		Key	factors	influencing	profitability	

included	–

0	 50	 100	 150	 200	 250	

CSA	

Wholesale	to	restaurants	

Community	Farmers	Market	

On-farm	retail	market	

Wholesale	to	grocery	

Wholesale	to	schools	or	other	

Other	market	channels	

Contract	production	to	processors	

Auction	sales	

Number	of	CSA	Managers	
3

• CSA	shareholder	turnover (-) adversely	impacted	overall	profitability.		Most	conventional	

wisdom	suggests	it’s	more	expensive	to	recruit	new	shareholders	than	retain	existing	ones.		

Additionally,	extended	periods	of	shareholder	turnover	may	lead	to	more	rapidly	maturing	or	

saturated	markets,	especially	if	there’s	competition.

• Share	of	total	farm	income	from	CSA (+) suggests	perhaps	there	is	some	benefit	from	focus	and	

specialization.		Other	marketing	and	production	systems	can	place	a	substantial	demand	on	

resources,	while	the	CSA	itself	generally	requires	substantial	investment	in	production	and	

marketing	management.,

• Assessment	of	the	overall	strength	of	demand	for	local	products	(+).		As	with	growth,	strong	

demand	for	local	products	contributes	favorably	to	profitability.		

• Use	of	season	extension	technologies	(+). Farmers	that	have	found	ways	to	integrate	

production	technologies	that	allow	them	to	offer	shares	longer	or	add	special	“winter”	or	“fall”	

shares	were	more	likely	to	report	growth	in	profitability.

• Use	of	flexible	payment	terms	(i.e.,	installments,	part-shares)	(+).	Managers	who	were	steering	

their	CSAs	away	from	the	traditional	single,	beginning-of-season	payment	were	more	likely	to	

report	growth	in	profitability.		This	is	an	interesting	result.		The	study	seemed	to	suggest	at	

multiple	points	that	fewer	consumers	were	looking	to	participate	in	the	traditional	risk-sharing	

relationship	with	their	CSA	farm	– which	may	also	mean	that	many	profitable	CSAs	were	finding	a	

way	to	connect	through	flexible	payment	plans	to	non-traditional	shareholders.

• Use	of	web-based	sales	(+).		E-commerce	has	rapidly	become	a	centerpiece	to	effective	directto-consumer	marketing	and	plays	an	important	role	in	local	food	retailing.		This	result	seems	to	

suggest,	however,	that	it’s	not	just	a	growth	in	web-based	information,	but	that	web-based	sales	

was	closely	correlated	to	increased	profitability.		Such	sales	help	reduce	search	costs	and,	in	many	

cases,	become	a	means	for	supplementing	CSA	sales.		Several	examples	of	this	phenomenon	are	

further	explored	in	the	forthcoming	USDA-AMS	report	“Community	Supported	Agriculture:		New	

Models	for	Changing	Markets”.

Table	2.	Overall	Profitability	of	the	CSA	Since	it	Began

2%	 6%	

37%	 45%	

9%	

0%	

20%	

40%	

60%	

Percent	

Overall	ProAitability	of	CSA	

Since	it	Began	
4

Scale	of	CSA

CSAs	ranged	significantly	in	size.		Although	average	shareholder	size	in	this	survey	was	141	shares,	the	

median	was	much	lower	at	about	60	shares.		Consequently,	what	we	are	looking	at	in	the	CSA	landscape	

are	many	relatively	small	operations	and	a	handful	of	very	large,	1,000+	shareholder	operations,	which	

understandably		take	very	different	approaches	to	meeting	the	needs	of	their	target	market	and	their	

consumers.		Interestingly,	scale	of	CSA	didn’t	really	seem	to	be	a	factor	in	either	projected	2-year	growth	

or	overall	profitability.

Still,	it’s	helpful	to	look	at	some	of	the	determinants	that	help	better	understand	differences	in	CSA	scale	–

measured	here	in	number	of	shareholders.		In	this	analysis,	those	factors	contributing	to	scale	included:

• East	coast	(+).	CSAs	were	divided	into	their	region	of	response.		Regional	differences	for	the	most	

part	did	not	seem	to	play	a	major	factor	except	in	this	case	of	scale.		Eastern	U.S.	CSAs	just	tended	

to	be	larger.

• Urban (+).	CSAs	located	closer	to	an	urban	base	can	also	more	readily	access	more	customers	

and	take	better	advantage	of	distribution	economies.		While	this	variable	explained	overall	scale,	

it	wasn’t	a	factor	in	either	measuring	future	growth	or	profitability,	per	se.

• Certified	Organic	(+).	Organic	CSAs	having	more	shareholders	may	relate	somewhat	to	the	age	of	

the	operation,	as	many	of	the	original	CSAs	were	certified	organic.		Organic	certification	did	not,	

however,	seem	to	be	correlated	with	projected	growth	or	profitability.

• Share	of	total	farm	income	from	CSA (+). Farms	that	emphasized	the	CSA	within	their	operation	

also	tended	to	be	larger.

• Age	of	the	CSA (+).	Older	CSAs	tended	to	be	larger	than	newer	CSAs,	not	surprisingly.		As	noted	

earlier,	however,	there	is	evidence	here	that	suggests	CSA	get	larger	over	time,	but	only	to	a	point.		

Older	CSAs	were	less likely	to	project	growth	over	the	next	2	years.

• Increasing	sales	of	processed	products	(+).	More	CSAs	are	adding	processed	products	to	also	

help	diversify	their	products	and	extend	their	marketing	season	beyond	when	fresh	products	are	

available.		Several	interesting	examples	are	identified	in	the	forthcoming	USDA-AMS	publication	

“Community	Supported	Agriculture:		New	Models	for	Changing	Markets”.

• Use	of	flexible	payment	terms	(i..e,	installments,	partialshares)	(+).CSAs	adopting	these	flexible	

payment	plans	tended	to	be	larger.		This	can	be	an	effective	strategy	for	reaching	out	to	a	larger	

audience	with	interest	in	the	product	but	perhaps	not	as	strong	interest	in	the	risk	sharing	or	

aiding	farmer	cash	flow,	as	in	the	original	CSA	concept.

• Use	of	web-based	sales	(+).		CSA	operations	actively	selling	through	the	web	also	tended	to	be	

larger.		Such	a	strategy	certainly	has	the	potential	to	accelerate	gross	sales.
5

In	summary	–

These	results	are	intended	to	summarize	some	of	the	technical	analysis	of	this	national	CSA	manager	data	

presented	in	a	condensed	form	in	the	AAEA	poster.		The	analysis	is	not	necessarily	intended	to	be	

prescriptive.		Every	CSA	is	different	– different	goals,	markets,	competition,	and	resources.		What	we	do	

hope	to	convey	here	is	that	many	CSA	managers	have	adapted	the	traditional	CSA	business	model	to	meet	

different	market	conditions.		Expectations	for	CSA	managers	in	this	survey	are	generally	optimistic	for	

both	growth	and	profitability.		

We	encourage	you	to	follow	the	work	that	comes	out	of	this	study	and	other	CSA	work	we	are	exploring.		

For	those	interested	in	citing	any	of	these	initial	results	presented	in	our	poster,	please	consider	the	

following	citation:

Woods,	Timothy,	and	Debra	Tropp,	“Adapting	Community	Supported	Agriculture	to	Modern	Markets	–

Where	is	it	Working”,	Selected	poster	for	Agricultural	and	Applied	Economics	Association	meeting,	

San	Francisco,	CA,	July,	2015.			http://purl.umn.edu/205885

A	related	analysis	connected	with	this	study	is	available	at:

Woods,	Timothy	and	Debra	Tropp,	“CSAs	and	the	Battle	for	the	Local	Food	Dollar”,	Journal	of	Food	

Distribution	Research 46(2):17-29,	2015.	https://www.fdrsinc.org/wpcontent/uploads/2015/10/2-113-Tim-Woods.pdf

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