Farmers Try to Tap Bigger Local Markets
Farm stands and farmers markets remain really important for many local farmers, but U.S. consumers barely buy any food directly from farms. That’s why local farmers are trying to crack in to the big institutional markets such as grocery stores, work cafeterias, schools and hospitals.
Local food sales numbers are hard to come by, but direct-to-consumer sales accounted for just .8 percent of food agricultural sales in 2007, the year with data that U.S. Department of Agriculture reports usually cite. The number is growing, but food sales through what is called “intermediated markets” – farmers’ sales to local grocers, restaurants and other institutions – account for the vast majority of food buying.
“Still 80-90 percent of all food consumed is through the intermediated markets,” said Craig Chase of the Leopold Center for Sustainable Agriculture at Iowa State University.
Farmers are slowly tapping in to the big markets. Farmer sales to intermediated markets accounted for about half of the nearly $5 billion in local food sales in 2011, according to USDA numbers. (PDF) But many farmers are hoping more access to institutions and big markets will lead to bottom-line growth. And with the market for local food maturing over the last two decades, they’ll have to expand beyond local weekend markets to create viable, sustainable businesses.
Farm-to-school programs are big buyers of local food and often serve as a pathway to creating a viable local food economy. Almost 40,000 schools across the country have some sort of a farm to school program, according to the USDA’s Farm-to-School Census, and schools spent over $300 million on local food in the 2011-2012 school year.
Schools are local and they feed a lot of people every day. That makes them ripe proving grounds for local farmers, says Linda Jo Doctor of the W.K. Kellogg Foundation, which supports research and projects dealing with local food.
“The interest in farm to school has actually led the way for the transformation for community food systems,” Doctor said. “There’s been an invitation for other institutions to come on board.”
Many hospitals have been trying to source more locally, both in their cafeterias and in patient meals. Advocacy group Healthcare Without Harm says 495 hospitals nationwide have signed a pledge to buy more food they say is local, nutritious and from sustainable sources. Local food is a staple on many college campuses and many Head Start programs and other preschools integrate local food into the meals they serve.
As more and more institutions decide to source locally, they’re using lessons learned from farm-to- school programs, according to Colleen Matts who works with local food systems at Michigan State University.
“We have a lot of experience and a lot of models to drawn at this point to help these other institutions get to their goals faster than schools were able to,” Matts said. “Because (schools) were that first frontier.”
It’s hard, though, to get local food to many of these institutions, whether hospital cafeterias or preschool programs. Individual small farmers can’t necessarily provide the bulk orders that food service directors need. And many big institutions don’t have a full service kitchen – they need pre-cut apple slices or baby carrots.
Many big buyers work within slight margins and can’t afford to pay extra for local food.
“One of the issues is profitability,” Iowa State’s Craig Chase said. “Can they pay the price that is needed to pay to make it profitable for the farmer?”
Churches, too, are a new market for local farmers. The World Harvest Ministries church in Kansas City’s Ivanhoe neighborhood recently set-up a small grocery store in its basement. It carries many local products thanks to a partnership with Good Natured Family Farms, a group of about 150 small farms within 200 miles of Kansas City.
The small store serves dual purposes: it provides fresh, healthy food in an area lacking grocery stores and it provides a new customer base for local farmers.
“The idea is, rather than trying to bus people to farmers’ markets we decided to take food to where the neighborhoods are,” said Diana Endicott, who runs Good Natured Family Farms. “We found churches are the best base that we have because the community already gathers there.”
For Terry Glenn, pastor of World Harvest Ministries, the small store could help both his parishioners and the neighborhood.
“With so much diabetes and high blood pressure plagued in our families, they know something is wrong but they never connect it to the table,” Glenn said. “They don’t connect it to what they’re eating.”
The store, which he calls the Harvest Learning Center Market, is supported with grant-funding. Many of Glenn’s customers use food stamp benefits, and thanks to a grant, the store matches some of the money customers using food stamps spend on local food. Glenn says he’s often able to connect with customers on a deeper level than your average neighborhood grocer.
“It’s one thing God wants for all of us,” Glenn said, “to be in good health and prosper as our soul prospers.”
Check out the whole series: The Local Food Challenge.