A shed sits between the field and the buyer
Food processing is described as the transformation of agricultural products into food, or of one form of food into other forms, and it ranges from grinding grain into raw flour to complex industrial methods for convenience foods. Industries in and around Bakersfield include food processing alongside energy, mining, refining and distribution, and the county's major crops include grapes, citrus, almonds, carrots, alfalfa, cotton and roses.
A packing house or processor is the link in that chain: product comes in from the field, is sorted, cooled, packed or processed, and moves out to a buyer. It is paid on the way out, but its costs start on the way in.
The cost lines that start before the first pallet ships
| Cost | Why it comes first |
|---|---|
| Seasonal labor | Sorters, packers and lift operators are hired for weeks of peak volume. |
| Cold storage power | Cooling runs from the first load whether or not it has sold. |
| Packaging | Boxes, liners and labels are bought in volume ahead of the season. |
| Grower advances or deliveries | Some sheds pay growers on delivery and recover the money from buyers. |
| Freight | Trucks or refrigerated carriers are paid even when the buyer pays slowly. |
A worked example, labeled as such
For illustration only: a shed packs for six weeks. It hires 25 seasonal workers at an average of $700 a week, which is $17,500 a week, or $105,000 for the season, before packaging and electricity. A retail buyer pays on 45-day terms, so the first payments arrive after the sixth week of packing is already finished. The shed has funded most of the season from its own balance. If a refrigeration compressor fails in week three, the problem grows quickly. These figures are an example and not our terms.
Where the money usually goes
- Hiring the full crew early enough to avoid a bottleneck at the sorter.
- Replacing or adding a compressor, forklift, conveyor or packing line, which is covered by equipment financing.
- Buying packaging in bulk so a supply delay never stops the line.
- Covering payroll and utilities between shipment and payment, which is the role of working capital.
What we need and what we provide
We fund from $25,000 to $5,000,000, with funding in as little as 24 hours after the file is complete. A FICO score of 500 or higher is considered, tax returns are not required, and we ask for about three months of business bank statements. The application is around five minutes and uses a soft credit pull. Sole proprietors can apply.
Statements from a packing shed usually show a sharp seasonal hump. A short note on when your season starts and ends helps the reviewer read it correctly. Apply here.