Finding the right option for your operation
What are a grower’s options for marketing produce? We can list the ways from brokered sales to large wholesalers down to on-farm sales at the local fruit stand, but when you’re talking about small produce growers, the options are much more limited. Big markets are usually out, and the fruit stand may not bring in enough income to stay afloat.
As a result, a great number of independent marketing networks and sales organizations have sprung up across the nation, ranging from the traditional cooperative involved in sales and transportation to much more loosely bound and organized groups that are affiliated as much for information as for marketing.
Bob Waldrop was a consumer looking for fresh, healthy food for his family, and he ended up forming a cooperative that is so successful that it did $1 million in business last year. It now has 145 members producing agricultural products.
The Oklahoma Food Cooperative, based in Oklahoma City, is set up in the style of the traditional farm co-op, but with a few differences. It has a board of directors, a president—Waldrop—and a marketing network, but it doesn’t store members’ produce, it sells many different ag-related products other than fruit and vegetables, and it does most of its organizing on the Internet. It has doubled sales every year and expects to be selling $1 million worth of produce every month by 2011, based on projections.
“Producers set their own prices, and we charge them 10 percent for selling through the co-op,” Waldrop says. There are over 1,400 consumer members, and they are charged 5 percent of every purchase transaction conducted through the co-op. Producers list their items online every month, consumer members sign up for as much as they want to buy and the two meet at one of 22 meeting sites established throughout the state to exchange cash for produce.
Producer members may grow vegetables or fruit, they may sell beef or other animal products or they may be selling farm crafts, such as candles or jams. There are some oddities, such as music CDs and beauty products, but it is primarily an ag-related group. Produce ranges from peanuts and apples to broccoli and okra in season. Producers must grow in Oklahoma and must describe how their crops are grown so that customers can make an informed choice when they buy. Many buyers prefer organic or other limited-input methods.
Waldrop says the biggest member/farmer is a peach grower with about 1,000 trees and 20 acres of vegetable crops, and the smallest is a backyard gardener with some extra produce to sell every now and then—there are a lot of those. Waldrop himself was not a grower prior to setting up the cooperative in 2003—he was and still is a church music director—but now he’s taken advantage of the networking opportunity to raise some landscaping cuttings in his back yard a couple of times a year.
Waldrop says he originally thought of setting up a retail store for producers, but that would have brought its own headaches and expenses. So, he focused on online marketing where both buyers and sellers can see exactly what is available and at what price at any given time. Go to www.oklahomafood.coop.com to see how this organization is set up and what it offers. It has just rented a warehouse to work from because of the overwhelming demand.
The benefit to growers, Waldrop says, is that they have a known market all the time. In fact, there is much more demand than product. He says that many growers say the co-op is their “bread and butter” market now, and they are expanding production to try to meet demand. This model is so successful that groups in several other states such as Nebraska, Iowa, Kansas, Texas and Idaho have come here to learn how to set up their own online cooperatives.
The Appalachian Sustainable Development is a whole other kind of organization. Based in Abingdon, Va., and started by Executive Director Anthony Flaccavento in 1995, ASD is recruiting farmers into what they call a “growers’ network.” It is involved in other areas such as forestry, but its agricultural side tries to coordinate the production of vegetables and the demands of buyers.
Tom Peterson, the group’s agricultural education coordinator, says his job ranges from on-farm assistance for growers to the planning of crops. ASD facilitates only certified organic crops through Appalachian Harvest, the organization’s ag side.
“My bigger job is to coordinate and present organic workshops with growers and consumer groups, promoting local organic agriculture,” Peterson says. He has been with the group since 2001 working with Appalachian Harvest. Concerned with “shaping the Appalachian economy” and simultaneously protecting natural resources in the region, the Harvest arm focused first on moving tobacco growers out of that declining industry and into organic vegetable production.
By the end of 2007, ASD had 48 growers signed on, amounting to about 150 acres of crops, mostly in Virginia but some in Tennessee. Peterson recruits new growers in local newspapers and meetings, as well as knocking on farmers’ doors. There is a full-time marketer who acts as a produce broker, talking to buyers as large as Kroger and Whole Foods.
There is no membership charge for growers, but when produce is sold ASD charges a 27 percent fee on sales for its services. This includes marketing, but the group does much more than that. It is a brick-and-mortar business, with an office, a packinghouse, cooling facilities and trucks for transportation of produce. Go to www.asdevelop.org to see the full range of its operations.
Peterson says one of the most exciting parts of the ASD process is the way its growers are so intimately involved in crop selection and marketing. In meetings with growers, ASD presents actual crop and acreage requirements from buyers. Growers sit together and decide who will grow half an acre of peas at a particular time, and who will grow an acre of broccoli at another time.
“There’s way more market than we have produce,” Peterson says, and both growers and buyers are excited about having an industry created around locally produced organic crops. Over half of the group’s growers were once tobacco farmers (only one or two still are), he says, and they are excited to know that they could grow and sell half as much produce as they do and still have a market eagerly waiting for them. There are over two dozen crops now in the mix, and the organic focus seems to be one that keeps expanding in demand. The group sticks to certified organic crops and even goes beyond its philosophy of sustainability.
Partly funded by grants from nonprofits such as the W.K. Kellogg Foundation, ASD promotes active partnerships with local and regional organizations, such as state economic development departments and Virginia Tech Cooperative Extension. This networking of growers with buyers facilitates farm sales. By fitting specific sales needs with specific farmers, the group keeps growers in a real-world situation where they know they can make money.
It is that kind of crop sales certainty that is creating optimism among area growers, Peterson says. They are actually excited about the future of agriculture, and local communities have rallied around them and their produce.
Another example of a dynamic agricultural network is the Southwest Marketing Network, situated in the Four Corners region of Arizona, New Mexico, Utah and Colorado. Its office is in the home of Project Director Jim Dyer in Hesperus, Colo. This group focuses on information.
“Ours is not about moving food around,” says Dyer, who was among several people who helped set up the group in 2002—most are still on its Steering Committee. Started with a Kellogg Foundation grant, SWMN is part of what Dyer calls a “new collaboration” within the agricultural community. It is about gathering the information necessary to allow producers, sellers, brokers and other groups, such as local or regional food programs, get together for marketing purposes. It’s about bringing small growers, especially of an alternative or minority status, into the regional food system.
SWMN facilitates this by maintaining a Web site, www.swmarketingnetwork.org, a newsletter and meetings that connect growers with the support needed for them to be successful. Dyer estimates that there could be up to 1,500 small growers involved in this networking system in one way or another, and there are about that many members involved in the service or informational side of the network. That has led to a pretty dynamic group.
A predominant and startling fact is that, according to Dyer’s best estimate, there is more demand than there is produce. It is SWMN’s aim to enable new, existing or prospective growers—many as small as backyard gardeners—to mesh into the system and find markets for their produce. This isn’t restricted to fruits and vegetables.
By putting growers in contact with farmers’ markets, grocery stores, cooperatives and local marketing groups such as Farm to School and Buy Local programs, Dyer aims to not only help them find sales, but also move up to the next level of success, which could mean more sales, more efficiency, more profit or more acreage. No membership is required; all a grower has to do is get on the newsletter list through the Web site, and he can locate annual meetings, local university seminars and other growers who share the same interests.
SWMN is, in a sense, a people broker, expanding on the role of Cooperative Extension and other individual services. They encourage small-scale, sustainable production and have helped invigorate farming in minority groups such as Native Americans—the Navajo Nation is one of the partners, for example. Expertise can be found on both the production side and the business side.
“We see some encouraging signs, such as the growth of farmers’ markets,” Dyer notes, and there is a strong surge in interest from small producers in recent years. The most remarkable result, he says, is the surge in optimism among people who, because of drought or economic issues in this region, had been feeling uncertain about a future in agriculture.
It should be said that two striking phenomena stand out when talking to people involved in such organizations. The first is the change in attitude that comes about when farmers are made to feel optimistic about growing crops. “That optimism is critical,” Dyer says, and every region examined evinced the same sentiment: that providing a structure wherein growers can find success together is a huge enabler of hope.
The second startling factor is that, apparently in every region of the country, there is more demand than production of fruits and vegetables from small, local farmers. Every one of these three organizations could use more produce labeled locally grown, organic, fresh or sustainable. When demand exceeds supply, that leaves room for growth.
Don Dale is a freelance writer and a frequent contributor. He resides in Altadena, Calif.