Associations See Opportunities Large and Small in the Local Foods Movement
From farmers' markets to Walmart, there are new marketing opportunities in the local foods movement.
The ad headline read, simply: “Farmers Wanted.”
That wouldn’t be surprising had those words been in the classified section of a small-town newspaper. But they were in big bold letters, part of a full-page ad placed in a major metropolitan newspaper...by a restaurant.
The restaurant -- looking for farmers who could supply locally grown produce to its chef -- is one of many now working with local farmers, and part of a growing local foods movement. Across the country, demand for farmers market-type foods exceeds the available supply. Experienced farmers as well as young, beginning and small (YBS) farmers are stepping up to meet that demand. And that represents new marketing opportunities for the Farm Credit System.
Are these small farms profitable enough to represent new business for Farm Credit Associations? Gary Matteson, VP, Young, Beginning, Small Farmer Programs and Outreach with the Farm Credit Council in Washington, D.C., believes they are. “It’s a viable business model for a small to mid-size farmer and not just a hobby farmer. But when you attend a farmers market it’s actually hard to tell what size of farm business you’re looking at,” he said. “I have a farmer friend in New Hampshire who has a farm stand and sells at three farmers markets a week. He grosses $300 thousand a year and nets $75 thousand. I know of other Farm Credit borrowers who have local food-based farm businesses that gross $1 million a year, with $600 thousand of that made through farmers markets,” said Matteson. “It may be a niche market, but it’s hard to ignore the opportunity to start small and grow into a profitable ag operation.”
FCS Of Mid-America Connects With Farmers Markets
Marketing to small farms producing for local markets is nothing new to Farm Credit Services of Mid-America, said Randy Barbee, Director of Communications. “So many farms in Kentucky and Tennessee are small, we’ve had targeted programs to reach them long before people were talking about locally grown produce,” she said.
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Randy Barbee,
Director of
Communications
at FCS of Mid-America
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What has changed over time is the type of farming, said Barbee. “In Kentucky, for example, when people started getting out of tobacco, they had to find a new way to do business. Specialty food and boutique-type operations and wineries have taken off. We now have 46 wineries, 10 years ago there were none,” she said.
Many farms are selling their products at farmers markets or building stores to sell it right on their farms, while others are discovering new sources of income through agritourism, said Barbee. “They are finding new ways to do business. And they are doing such interesting things, like festivals and corn mazes. The whole agritourism market has really taken off. In our four states there are listing after listing of things you can do, and with people staying closer to home in this economy, that’s good news for farmers,” said Barbee.
One way Mid-America is reaching out to both new and existing customers is by marketing at farmers markets. It identified 100 farmers markets in its 4-state territory, and provided them with reusable, cloth bags with the Mid-America logo printed on them for customers to carry their purchases. That keeps Mid-America visible to new YBS farmers who may not know about Farm Credit, said Barbee.
Barbee said Mid-America is always on the lookout for new marketing ideas that serve its current customers and that reach out to new customers. At one farmers market, she said, whenever it rained, the outdoor lot would get muddy and nobody would show up to buy the farm produce. Through its Stewardship Program, Mid-America donated $25,000 so the farmers market could buy land and build a permanent structure.
Farm Credit of Western Arkansas
Sees Opportunities Small and Large
Whether farmers are selling agricultural products at a small farmers market or to Walmart, the world’s largest retailer, they need financing and, in many cases, education, says Tom Cox, Sr. VP of Sales and Marketing at Farm Credit of Western Arkansas.
The YBS farmer program at Farm Credit of Western Arkansas is strong, primarily because most of the farms in their region are small. “About 93% of our loans are considered small or under $250,000 gross income,” said Cox. “We have a pretty strong YBS farmer program just by the fact that we exceed our census data especially for young and beginning farmers. Our part-time farm market, home-type lending, as well as poultry lending has really developed over the past years. We brought a lot of young and beginning farmers on board simply because of the concentration of poultry in our territory. Many in of those farmers are under 35 years old, they’ve worked off farm for a while building equity, then bought a farm or decided to build some poultry units.”
Cox is exploring new ways to provide YBS farmers with affordable financing. “We have to finance the next generation of farmers, whether they’re large or small, and especially those that are young in the beginning. The one thing I’m looking at is trying to adapt programs for YBS farmers and offer more succinct, definitive programs, with reduced interest rates, cost sharing on fees, or FSA guarantees, things like that.”
Cox is also looking into ways to provide greater education to YBS farmers as a part of a revamped young and beginning farmer program. “I’ve held focus groups that have pointed out that there is a need for education, and for young and beginning farmers to have a greater social network, to share common ideas, and interests, and to share what’s going on in their communities.
Reaching Out To Walmart
At the other end of the local foods spectrum, Cox is hoping to work with Walmart, which is headquartered in Bentonville, Arkansas just over a 100 miles away from his office and now studying ways to bring more local foods to its many distribution centers.
“Walmart believes that to lessen their carbon footprint, they’d like to see these local foods produced within so many miles of their food distribution centers. The question is how will that movement get traction. We’re trying to connect with Walmart to put a local face on who Farm Credit is and what we do.”
Matteson, with Farm Credit Council and also involved in the early stages of Walmart’s local foods initiative, agrees: “Last year, they said they were going to spend $400 million in local foods. Well that’s $400 million of opportunity for farmers, especially young, beginning and small innovators.”
The local foods movement and opportunities for Farm Credit are growing every day. Stay tuned.