On the Line: Food and Jobs

Lack of access to financial capital is a chief obstacle for newer farmers in the United States. This problem is urgent because the vast majority of farmers are at retirement age, and few of their children are choosing to stay in agriculture. A next generation of farmers is essential for future food security. New farmers are also important to economic security as small businesses that create jobs when they spend and invest locally. 

The Financing Farming in the U.S. (FFUS) project formed in 2010 to explore this problem and solutions to it. It’s national a team of community lenders and small farm business advisors, which the Center for Regional Food Systems at Michigan State University convenes. 

The FFUS project has been busy exploring ways to build better connections between lenders, which increasingly know little about agriculture, and smaller diversified farmers, which present some unusual business models compared to conventional farming. In particular, the project has been providing training for lenders through the U.S. Treasury’s Community Development Financial Institution’s (CDFI) Fund. 

New Resources Available

Here are some links to the project’s work that provide more background and helpful approaches. 

Case studies of 5 CDFI approaches/experiences
http://www.cdfifund.gov/what_we_do/resources/Food%20Prod%20Case%20Studies%20Final.pdf

Background for lenders on the small farm sector:
http://www.cdfifund.gov/what_we_do/resources/Understanding-Food-Production-Sector.pdf

Primer on lending skills needed for the small farm sector:
http://www.cdfifund.gov/what_we_do/resources/Credit%20Skills%20for%20Lending%20to%20the%20Food%20Production%20Sector.pdf

Two FFUS reports on the need for building the capital flow to smaller farms and strategies for that:

Strengthening Metrics and Expanding Capital Access report (2012): http://foodsystems.msu.edu/uploads/file/FFUS_Strengthening_Metrics_report.pdf

Financing Farming in the U.S. (initial report, 2010)
http://www.mottgroup.msu.edu/uploads/files/59/Financing%20Farming%20in%20the%20US.pdf

Jane Bush of Charlotte, MI, is one of those smaller farmers with a diverse mix of products for a broad range of local customers. The latest venture for her Apple Schram Organic Orchard is sales of early tomatoes and extended season greens to hospitals in Jackson, Ann Arbor and Lansing, Michigan, as part of the new Four Seasons Cooperative.

Like many smaller diversified farmers, Bush has had to patch together processing, distribution, marketing, and even record-keeping solutions. Most of the more sophisticated services out there, that might handle the complexity of multi-product and multi-market farmers, are designed for much bigger operations.

“Everybody wants to promote smaller farmers, but there hasn’t been a whole lot on the back end for those farmers,” she said.

In a sign of changing times, however, the field of business products and services available to the local food set is now popping with entrepreneurs and innovations. This new business-to-business lineup is also leveraging the power of social networks, mobile phones and other vehicles to leap frog over so many conventional food market barriers and establish an entirely new playing field.

The field of small farm business services is growing for Jane Bush's Apple Schram Organic Orchard in Charlotte and many other diversified operations focused on local markets.

Starting on the farm production end of the marketing chain, a leading example is AgSquared <agsquared.com>, a software package that helps diversified farms plan, manage and monitor everything that happens from ordering seed to heading out the farm gate. The company just launched last December and was already up to 2,000 users at the end of February. AgSquared is offering discounts to early subscribers off a regular price of $60 per year.

David Baker, owner of Primrose Valley Farm CSA in south-central Wisconsin, calls it a “killer app.” He said he and wife Jamie are happy to have AgSquared in their toolbox as they scale up from several hundred to 2,000 CSA subscribers. 

“Like thousand of farms like ours, our seasonal planning and execution has been held captive by numerous complex spreadsheets that are inefficient at best and not readily capable of accommodating the many twists and turns that are part of our daily farm experience,” Baker said.

Moving on to services for marketing products and conducting sales, a leading example is the online marketplace Local Orbit <localorb.it>. Many online sites exist for marketing and selling local food. Local Orbit stands out because it allows farms to sell in multiple marketplaces from one account. It also supports farms with a built-in suite of back-end tools for marketing products, tracking customers, updating and monitoring inventory, and organizing delivery.

Developed and tested over the last couple years, Local Orbit is taking off with regional groups trying to streamline and support the flow of local food from many sellers to many buyers. Local Orbit is working with Detroit Eastern Market and the Puget Sound Food Network, and launching new sites this spring in Albuquerque, Baltimore and Colorado. 

Christine Quane, wholesale manager at Detroit Eastern Market, is using it to simplify and step up sales from local growers to area buyers, like Detroit Public Schools. “Local Orbit provides the information I need to minimize logistics costs in the supply chain,” Quane said.

Further down the line of new business services, another set is focused on making the food supply chain more transparent. Leaders range from Top Ten Produce and its mobile bar code branding of food from smaller farms to Real Time Farms and Food Tree, which are resources for consumers searching for local food.

A supporting tool that some are using is Sourcemap, which employs social networking to make supply chains more transparent.

“We’re like the YouTube of supply chains,” said CEO Leo Bonanni. Anybody can map their business for free and build maps by linking with others, such as restaurants that are building maps of their local food sources.

“Users can basically ‘friend’ each other and add that information to their supply chain maps,” Bonanni said.

Food and farming is Sourcemap’s largest user group so far, he added. “Out of 2,000 maps, about 1,000 are food related.” Sourcemap is also working with retailers and other larger companies to map and market their supply chains.

The most compelling thing about this emerging field of local food and small farm technology support is the potential game-changing interconnectivity of it.

As Cara and Karl Rosaen, founders of Ann Arbor-based Real Time Farms, explained in a Dec. 21, 2011 article at Food-Tech-Connect, the online magazine watching this new world: “If we work together … we can move, aggregate, and share data seamlessly between farm management systems (like AgSquared), CSA-management systems (like LocalHarvest’s CSAware), traceability software (such as HarvestMark and Top10Produce), food hub distribution software (such as LocalOrb.it), online food distribution systems (like LocalDirt or Farmigo) and consumer facing educational tools, like Food Tree and RealTimeFarms.”

 Originally published in the May, 2012, edition of Vegetable Growers News (print)

Also posted at the Fair Food Network, May 2012.

Turn Up the Volume is a Fair Food Network project to investigate local food market potential for Michigan growers, processors, and distributors. Patty Cantrell, Regional Food Solutions LLC, produces the series for the Fair Food Network with USDA Specialty Crop Block Grant support.

Farmers and gardeners all know that the most powerful thing they can do to grow healthy plants is to invest in soil. Rich soil is the key to vibrant, resilient plants; it’s the basic building block of life.

Now take that truth and apply it to your local economy. What is the most powerful thing we can do to grow strong businesses and lasting jobs? Again, rich soil is essential. The “soil,” in this case, is the business environment: How well set up we are to support local businesses and encourage entrepreneurs.

The soil metaphor is apropos for a new “economic gardening” idea that the Northwest Michigan Council of Governments is working to develop with Michigan State University and Regional Food Solutions LLC. To help communities nurture their local food and farming sector, the NWMCOG and partners are preparing a toolkit for establishing “food innovation districts;” that is, places where food and farm entrepreneurs can find the facilities, services, and peers they need to succeed.

Cherry Blossom Time, Benzie County Michigan, photo by John Clement Howe. http://tiny.cc/bgmccw

“Agriculture is an important industry in our region, and communities consistently rank it highly as something they want to support and grow,” said Matt McCauley, NWMCOG Director of Regional Planning and Community Development.

One of agriculture’s growth areas is local food, including many food and farm entrepreneurs in NWMCOG’s 10-county region starting to sell locally to schools and restaurants and developing specialty products for residents and visitors alike. 

It’s an emerging sector that can produce needed jobs, farmland protection, and healthy food for the region, according to a number of leading organizations that have targeted it. The five-county Traverse Area Chamber of Commerce, for example, recently committed to sourcing 20 percent of food served at its events from local sources, and to encouraging the region’s event planners, with more than $1 billion on the table, to do the same.

 Making the most of this and other opportunities will require support for farms and others forging these new markets. For example, many smaller farms marketing locally find themselves spending too much time on the road delivering products and calling on customers. The reason is there is no place (yet) for them to bring their products together for more efficient marketing and distribution. One solution springing up across Michigan and the nation is the “regional food hub,” which can help with storage, processing, marketing, distribution and other needs.

“Food hubs are the types of developments that can grow once a community begins to focus on the needs of those food and farm entrepreneurs, small and large, that are going after increasing demand for healthy, local, and sustainably produced foods,” said Patty Cantrell, Regional Food Solutions LLC, a consultancy based in Beulah. Food innovation districts are one way that villages, townships, cities and counties can prepare the business environment ground for food hubs and other developments, like food- and agri-tourism destinations, to emerge, she said.

The NWMCOG’s Food Innovation District toolkit will include planning, zoning, and economic development guidance for communities interested in the approach. Research and outreach is now underway, with a final product slated for the end of 2012.

In this Fair Food Network video we report on a range of Michigan farmers pursuing opportunities in local and regional food markets. Doors are opening especially for mid-scale farmers and smaller operations with the volume and capacity to act.

http://www.youtube.com/watch?v=tiQjpyS1CHg

Is Michigan the canary for the country on this score? Michigan’s Department of Natural Resources, urged on by the Michigan Pork Producers Council, has made a sweeping feral hog declaration that is now coming down on small-scale livestock farmers who have developed strong markets for heritage breeds.

Read this well-written editorial about it here by state Senator Darwin Booher: 

Then watch the farmer Sen. Booher mentions tell about his heritage meats and the order to destroy his animals by April.

http://www.youtube.com/watch?v=tOBUKrMXfGw

 Financing team offers training as part of healthy food initiative

 By Patty Cantrell

 Nic Welty employs himself full time year-round raising lettuce, spinach, and other leafy greens in three low-cost passive solar greenhouses, which together cover less than one acre of land.

His Nine Bean Rows farm near Traverse City, MI, is one of many smaller, diversified, often first-generation farms in the country that defy expectations, particularly among bankers and others with money needed to finance the new food enterprises.

Most find it difficult to pencil out the possibility that such a niche farm business could reliably make enough money to grow. Yet as Welty explains, “This business is good enough to take a cash advance on a credit card and run with it.”

The fact that many smaller niche farmers must do just that is alarming to a growing group of activist lenders and small farm business advisors.  They say it’s high time to line up resources behind the nation’s new farm entrepreneurs and the new jobs, food supply, and local commerce they are building.

Lender Re-Training. “There is a critical need to provide business and financial support to this sector to help it grow, prosper, and meet its economic and production potential,” says Denise Dukette, a New England Bank vice president.

Dukette is part of a team of experts who will this year conduct a series of workshops for nonprofit loan funds and other mission-driven Community Development Financial Institutions, or CDFIs. The CDFI national association, the Opportunity Finance Network, will offer the training on farm production lending as part of a capacity building effort funded by the U.S. Treasury’s Healthy Food Financing Initiative.

Dukette and colleagues came together last year to assess the situation for small- and mid-scale diversified farms, and find leverage points for change. Their Financing Farming in the U.S. report found that building knowledge and capacity on the lender side of the farm financing equation is just as critical as building farmer’s financial skills.

“We want to make sure that a farm with a business model that works, and strong business management capacity, can communicate with lenders and get a fair shake in a loan,” says Mark Cannella, a farm business advisor with University of Vermont Extension.

A new USDA Economic Research Service study points to the economic development potential: The local food market that such entrepreneurs are largely forging is growing rapidly and amounts to nearly $5 billion annually, four times higher than previous estimates.

Capital Jam. One problem is that few commercial bankers are familiar with farming anymore given consolidation over the years in both banking and agriculture, says Susan Cocciarelli of the Center for Regional Food Systems at Michigan State University. With funding from the WK Kellogg Foundation’s Food and Community Program, Cocciarelli co-convened the Financing Farming in the U.S. team with Dorothy Suput of The Carrot Project, a small-farm financing organization in the Northeast.

“Financial institutions have to have good information about the sector they’re lending into,” Cocciarelli says of the familiarity gap between lenders and new farmers.

Another small-farm financing challenge comes in the form of policies and practices among traditional farm lenders and agencies. Their loan criteria and other measures reflect where agriculture has been over the past decades of industrialization, not where a good portion of agriculture may be going with local and regional market opportunities.

Oregon farmer Zoe Bradbury ran into that problem in 2008. Her story is featured in a new report from the National Young Farmers Coalition about barriers to success for beginning farmers.

After investing her savings in startup equipment and supplies, Bradbury sought a small irrigation loan from the USDA Farm Service Agency. She ended up taking out a credit card cash advance instead, in large part because the local FSA office would only consider income projections based on low global commodity market prices for fruits and vegetables.

Yet Bradbury’s business is based on a much healthier diet of higher net revenues from direct-marketing produce at farmers markets and the like. She managed to pay down her debt before the credit card’s 18 percent interest rate kicked in a year later. 

“It was the biggest, scariest financial risk I had ever taken,” Bradbury said. “I’d never been so far out on a limb.”

Growth Factor. Nic Welty has so far avoided the credit card risk so many others have had to take to finance their smaller diversified operations. But he’s wondering how he’ll finance further growth.

“It’s not so hard to get a loan for something solid (and saleable) like buildings and equipment,” he says. “But it’s almost impossible to get financing for the marketing, employee training, and other operational investments that will really make the difference.”

Published 2/2/12 at sustainableagriculture.net (National Sustainable Agriculture Coalition

Picked up 2/3/12 by national AGree News Feed 

Posted 2/16/12 at blog Civil Eats

Malik Yakini in one of D-Town's hoophouses. Photos by Kathryn Colasanti.

Urban agriculture is one of those things that virtually everyone recognizes as a powerful way to strengthen Michigan.

Urban agriculture brings healthy food to neighborhoods without quality grocery stores. It brings neighbors together, which strengthens investments that families and businesses make in a community’s future. Urban agriculture also brings opportunities to young people who can get started farming at relatively low cost on vacant lots.

Right to Farm Question

To move forward, however, Michigan’s city governments need to be comfortable with agriculture in their densely populated areas. One of the first challenges they’re facing is a state law called the Michigan Right to Farm Act, which supersedes any local say in the matter of how a farm operates.

 “The Right to Farm Act didn’t anticipate farming growing in the city,” says Malik Yakini, executive director of the Detroit Black Community Food Security Network. “What’s appropriate for a traditional rural farm may not be appropriate in the city, with houses right across the street.”

Yakini is among those eager for a solution to the confusion that the Right to Farm Act’s power over local government action is creating for cities like Detroit.

Possible Answer?

James Johnson, Environmental Stewardship Division Director with the Michigan Department of Agriculture and Rural Development, is working on it.

“The Michigan Commission of Agriculture (which administers Right to Farm) is very clear that it’s not interested in being an impediment to people growing their own food, whether home gardens, community gardens or full-blown agricultural operations,” he says.

The Commission attempted to solve the problem in late 2011 with a revision to its Generally Accepted Agricultural Management Practices, or GAAMPS, which the Commission uses to determine whether a farm’s practices can be protected under Right to Farm. The revision would allow cities with more than 100,000 people to develop their own ordinances for agriculture but also require those cities to exempt any farms that have started operating in the meantime from new city rules. 

The city of Detroit finds that approach inadequate and contends that allowing existing operations to continue practices that would be nonconforming is unacceptable. 

Another Idea.

Michigan residents and lawmakers may want to consider a more comprehensive proposal set out by planning and zoning experts in the winter 2011 edition of the Michigan State Law Review.

 The article’s authors recommend taking the legislative steps needed to fully hash out how large a city must be to gain exemption from Right to Farm. In addition they suggest amendments to the state’s key planning and zoning enabling acts. State government could encourage communities to plan and zone for urban agriculture by including such direction in those laws.

The authors further suggest that lawmakers could actually make planning and zoning for urban agriculture a condition for gaining exemption from Right to Farm Act’s preemption of local control. In this way, the state could spur more urban agriculture zoning action.

Blog also appears at Michigan Good Food.

Les Timmer’s southeast Michigan carrot farm on Muck Road near Imlay City is about as pure Michigan as you can get.

Muck Road is named after the loose, rich soil left behind by an ancient lakebed. In the 1800s this natural resource, which is especially good for growing root vegetables, drew many Belgian and Dutch farmers to the area. They began raising produce for rapidly growing cities such as Detroit. Many of their descendants, like third-generation Les Timmer, are still at it. 

Today, however, like most of Michigan’s agricultural products, Timmer’s carrots sit side by side in grocery stores with carrots from California and elsewhere. It’s not easy for Timmer’s Michigan carrots to stand out in that global commodity crowd.

That could change, however, because the Michigan Economic Development Corporation is now making the state’s highly successful Pure Michigan logo available for free to farmers and other businesses.

Pure Michigan is one of the strongest destination brands in the world; Forbes magazine has put it in the Top 10 of all time. Now farmers like Timmer can use it to connect with a large and growing contingent of shoppers who prefer to buy Michigan products.

“It’s a very good promotional idea that could go like crazy,” Timmer says. He plans to take the next step of requesting a licensing agreement to use the Pure Michigan logo. “All we’d have to do is talk to our bag supplier and add that to the printing,” he says.

How much Michigan?

The big question that could slow use of Pure Michigan in agriculture, however, is how purely Michigan a product must be to use the logo.

Many Michigan-made products include ingredients from other places, and some products, such as pineapple or potatoes, may be packed for distribution by Michigan companies but are not from Michigan.

That’s why the Michigan Economic Development Corporation, which administers the program, is working with the Michigan Department of Agriculture and Rural Development to develop criteria. They are working to assure consumers that a significant percentage of the value of a product has been contributed within the state.

Until those criteria are available, the agricultural meaning of the Pure Michigan brand and needed guidance for farmers and food businesses remain up in the marketing air.

Michigan residents and farmers who want to get these criteria moving along can contact MEDC Marketing Director Kelly Wolgamott, wolgamottk@michigan.org and Linda Jones of the MDARD business development division, jonesL9@michigan.gov, with carbon copies to state representatives and senators. 

Blog also at Michigan Good Food

By Patty Cantrell and Bob Heuer, Fair Food Network

Sam Shina’s family owns 14 small grocery stores in Detroit. One of them could soon be part of a market incentive experiment designed to improve public health, expand sales for Michigan farmers, and grow local economies.

Pending federal approval, Shina’s Apollo Market will become one of five independent Detroit grocery stores to test a program that uses charitable contributions to provide additional money for food stamp recipients to purchase fresh produce.  “Double Up Food Bucks” was in operation this summer at 54 Michigan farmers markets and is now looking to move into grocery stores.

Sam Shina says the purchasing-incentive program “will allow us to have more produce and more variety” to offer low-income customers. 

Operated by Ann Arbor-based Fair Food Network (FFN), Double Up Food Bucks is designed to increase consumer access to fruits and vegetables.  But it has the additional pump-priming aspect of sending a signal through the channels of both the marketplace and government.

Double Up Food Bucks is among many new approaches that a growing chorus of food policy stakeholders is bringing to local, state, and federal government. They contend the solution to the high cost of dietary diseases is greater access to healthy food and more marketing avenues for farms to supply it. FFN will work with other organizations in upcoming federal Farm Bill debates, for example, to make the case for Washington to do more to leverage its substantial purchasing power for public health and economic health.

Food stamp benefits are now called Supplemental Nutrition Assistance Program benefits. SNAP has an annual nationwide disbursement of $69 billion to low-income people. 

“Each year Michigan draws about $2.5 billion in SNAP benefits,” FFN president Oran Hesterman says. “We are not capturing that flow of resources for our Michigan farmers anywhere near what we could.” He views incentivizing SNAP purchases of Michigan products as a powerful way to accomplish many objectives with one dollar.

Related proposals to improve diets and build new farm marketing channels range from regional-scale food distribution hubs to more scratch cooking and nutrition education in schools. Support is showing up in local governments’ economic development planning, in Michigan Governor Rick Snyder’s agenda, and in federal Farm Bill deliberations.

Increasing demand for fresh fruits and vegetables, as well as strong consumer interest in local food are factors shaping the business plans of growers like the Thumb’s Sattelberg family. Jim Sattelberg, his wife and sons raise crops, and process organic beans and grain.

“It’s coming,” Sattelberg says of a new consumer mindset—especially among the younger generation—that will change how people eat and how farmers do business.

The family company recently bought a new facility that will enable expansion of existing operations and provide capacity for fruit and vegetable processing. “I want it to be a place to bring vegetables and prepare and package them; I want to make that available to local growers,” he says.

Grower incentives will smooth the path to market development, he says. “We need some grant money to help develop the system and the learning process, so growers will see the value and try it.” 

Support for farm business innovation is contained in proposals such as a “local and regional food system bill” that U.S. Senator Sherrod Brown (D-Ohio), U.S. Representative Chellie Pingree (D-Maine) and co-sponsors have introduced. The comprehensive package will include provisions to support entrepreneurship in regional food distribution; provide crop insurance for diversified farming; and address the shortage of credit, research, education, and training for new marketing approaches, as well as uncertainties related to food safety and other regulations.

Western Michigan carrot producer Jerry Malburg has already ventured in business directions that put him in good position to supply emerging local and regional markets.  Fifteen years ago, he built storage facilities that allowed him to extend fresh carrot marketing through April.

“I found that if I stored carrots there were a lot of places out there that wanted to buy them,” he recalls.  Most have been sold to a “stick carrot” market that fills party trays between Thanksgiving and Super Bowl Sunday.

A limiting factor is competition from California’s baby carrot market. So Malburg is eager to explore opportunities to supply institutions, such as Michigan State University, which have made clear to distribution companies that Michigan and regional farm suppliers will come first.

Student interest in eating food from nearby farms is the biggest driver for MSU to source more of its $18 million annual food budget locally, said Marta Mittemaier, MSU Food Stores Manager. “On a scale of 1 to 10, it’s like 15,” she said of interest in the local purchasing initiative. “It’s very important to MSU.”

The Snyder administration is responding with policy solutions that recognize agriculture as a key to the state’s “economic reinvention.” The Michigan Food Policy Council (MFPC) is a lever of influence. The foundation-funded, state-led initiative convenes a diverse set of food-related stakeholders to recommend programs and policies.

One MFPC target is 20 percent of all Michigan food purchases to come from Michigan producers and processors by 2020. To do this, the MFPC will support local food and farm policy efforts statewide, such as the southeast Michigan’s five-county Food System Economic Partnership and northwest Michigan’s six-county Food and Farming Network. 

Front and center in such local, state, and federal policy proposals is the need for greater access to healthy foods and how such efforts can also support Michigan farms. Gov. Snyder’s recent health and wellness address specifically mentions farm-to-school purchasing programs and Double Up Food Bucks.

The win-win potential is strong. From June through September, the opportunity to double their money, up to a total spend of $40, brought 30,000 SNAP users to farmers markets in Michigan, more than a third of them for the first time. During those four months more than $1 million (SNAP plus incentive) went directly into Michigan produce vendors’ pockets.

Michigan Asparagus Advisory Board executive director John Bakker is encouraged by Double Up Food Bucks’ planned experiment with retail stores where he says more producers could benefit.  “It could tempt folks to try asparagus who maybe otherwise would consider it outside their budget,” he says.

Turn up the Volume is a Fair Food Network project to investigate local food market potential for Michigan specialty crop producers. Patty Cantrell, Regional Food Solutions LLC, produces the series for the Fair Food Network with USDA Specialty Crop Block Grant support.

Published also in:
Michigan Farm News, print edition October 30, 2011 
Fair Food Network 

By Patty Cantrell and Bob Heuer, Fair Food Network

Macomb County vegetable grower George DeBruyn has had a busy season supplying supermarkets and his own produce market north of metropolitan Detroit.  His upcoming plans elicit a chuckle.

“Four schools have called me so far this year to buy our produce,” he says with a glint in his blue eyes.  “One has a large greenhouse. So I’m going to school this fall to teach kids how to grow and harvest.”

Farm-to-school sales received a boost recently from a U.S. Department of Agriculture decision allowing Michigan schools greater flexibility in produce purchasing. Less rigid federal requirements could mean new opportunities for many, such as DeBruyn’s southeast Michigan community of third- and fourth-generation immigrant farmers.  

Such shifts bolster DeBruyn’s business opportunities and his faith in a neighborly economy. “When I go Christmas shopping, I go to Mom and Pop stores. I want to support them. They support me.”

This ethic of taking care of neighbors, land, and the future is at the heart of the local food movement.  Proponents include non-profit organizations like the Wallace Center at Winrock International, which hosts the National Good Food Network. NGFN’s monthly webinars garner a national audience seeking market-based solutions to problems like rural and urban areas that lack access to fresh, healthy foods and the need to improve working conditions for many in the food industry. 

George DeBruyn (right) visits with a fellow farmer during an MSU Extension workshop at DeBruyn's farm. Photo credit: Gary Howe.

The country’s largest growers, distributors, and processors acknowledge a legitimate market force in the making. The Produce Marketing Association’s (PMA) recent national conference highlighted inter-related trends of “sustainability” and “locally grown” that are re-shaping the food supply chain. The PMA encouraged members to begin thinking of achieving the “triple bottom line” of people, planet, and profit.

Consumer demand for new taste, transparency, and trust in their food is in fact spurring a new business model – a food value chain —that some entrepreneurs are embracing.

Price and convenience remain key variables. Yet another essential factor is the farmer’s story, says Michigan State University Product Center supply chain specialist Matt Birbeck. “Consumers these days are looking beyond the product and focusing far more on who you are and what you do.”

Examples of this shift abound. Food service orders accommodate more varieties of apples grown by Michigan farms instead of just the Red and Golden Delicious from Western growers. Distributors seek growers who can brand their story. “Food hubs” are emerging to aggregate local products for regional sale.

The innovation and investment could help revitalize the mid-scale farming demographic. Often too large for farmers markets and too small for big success in global commodity markets, it is these farmers “in the middle” who have an appealing story to sell.

Kevin Piscatello is a Chicago-based vice president of regional procurement for Sysco, the $40 billion food service distributor to restaurants and cafeterias.  “We have always tried to drive costs out of the system by going from 20 (farm) invoices to one, and hitting a truck load,” he says. “Now we compete with jobbers, mom and pop distributors who create niches” and can afford to handle more suppliers.

Sysco is lining up local supply when available. Volume in a new Michigan ordering category (MIPROD) is increasing 20 percent per year. This summer, Michigan radishes supplanted the Arizona product for six weeks.

Paul Baumgartner is food service director for Grand Rapids Public Schools. He’s talked with distributors who want a piece of Michigan schools’ new produce spending authority. He says: “What it’s going to be is local first, regional second, domestic third.”

Demand from small and large distributors alike is prompting some farms to build cooperatives and their own brands.

Consider “Farmers on the Move.”  This southwest Michigan cooperative consists of 13 Hispanic blueberry growers like Pedro Bautista of Van Buren County.  He says the co-op intends to add more growers and products: “We hope in the next few years that many who are still doing this on weekends will be working 100 percent on their farms.”

Van Buren County blueberry grower Pedro Bautista is one of the founders of the new Farmers on the Move cooperative and brand. Photo credit: Patty Cantrell

“Beyond providing a quality product, which is a given, it’s the people who grow the blueberry that make the difference,” says Tyler Smith, account executive at Newhall Klein Inc.  While developing the cooperative’s brand, this Kalamazoo firm found that the farmers’ contribution to Michigan farmland preservation has significant consumer appeal.

No wonder elected officials like Michigan Governor Rick Snyder are advancing plans to link public health and agricultural vitality through such initiatives as farm-to-school.

Michigan Department of Agriculture and Rural Development Director Keith Creagh talked up implementation strategy on Lansing’s Channel 6 News. “One of the programs we’ll spend more time, energy and effort on is something called Local Food Hubs,” he says. Food hubs are about “marrying businesses and consumers and farmers to make sure you have that integration of systems to supply food locally.”

Michigan has several food hubs in the works. Grand Rapids is planning a year-round public market that will include wholesale. Detroit’s Eastern Market, which does strong retail business on Tuesdays and Saturdays, is building up its wholesale traffic.  

The 43-acre food business district is 120 years old. It remains a key outlet for some wholesale produce farms but it’s not like it was a generation ago. As Eastern Market’s wholesale manager, Christine Koane’s job is to reinvigorate the regional food supply by linking producers to larger scale local buyers.

 “People want that local product, and it’s becoming more and more important,” she says. “We’re working to help the market catch up.”

Turn up the Volume is a Fair Food Network project to investigate local food market potential for Michigan growers, processors, and distributors. Patty Cantrell, Regional Food Solutions LLC, produces the series for the Fair Food Network with USDA Specialty Crop Block Grant support. See the full series on Facebook at <http://on.fb.me/nEpD2U>.

Published also in:
Michigan Farm News, Oct 15, 2011 print edition
Fair Food Network