Indiana and Kentucky Farm Bureaus and Farm Credit Collaborate on Retail Ag Promotion
Indiana Farm Bureau, Kentucky Farm Bureau and Farm Credit Mid-America recently co-hosted two educational sessions for staff and leaders to learn local details about growing opportunities in Retail Agriculture – direct-to-consumer sales, value-added ag and agritourism. The two sessions were held in Louisville and Indianapolis.
The purpose of the June program was to share the economic and social impact of Retail Agriculture and illustrate the point with some successful business models. The meetings were structured to give confidence to producers that retail operations are a viable business option and to encourage loan officers to extend credit on the basis of a marketing plan instead of hard assets. Adding a retail agriculture component to conventional family farms can increase income, mitigate financial risk, offer an opportunity to include the next generation in farming and provide a means of connecting to customers who want to learn more about where their food comes from.
Farmers finding new ways promote their business(06/25/2012)
It may seem that one of the most challenging things someone could do nowadays is to try to start a small business. In the world of agriculture, however, anything is possible, and even the most stalwart advocates of traditional and conventional agriculture are finding new ways to grow and promote their own small farm and direct-to-retail ventures. Many are starting in their 50s, as data from the National Agricultural Statistics shows.
Small farms and farm businesses are a growing trend in the U.S. One-third of farm households also run independent businesses, said Gary Matteson of the Farm Credit Council and vice president of the Beginning Small Farmer Programs and Outreach during one of the sessions. “Forty percent of beginning farmers surveyed in the 2007 Census of Agriculture were in metropolitan counties on very few acres, mostly in California and Texas,” he showed. “The 2012 census will include a new question that we lobbied for: When did you start farming?”
Twice as many of these beginning farmers are in their 50s as in their 30s and under, and 25 year olds only account for 2 percent of them, making new agricultural startups a luxury for established farmers and business people. In addition, while proponents of local, smaller agricultural outlets and sales avoid giving a regulatory definition to local farming, their actions seem to speak loudly for what they hope to do: Connect farmers and consumers again.
“An Illinois Farm Bureau survey of consumers showed that 40 percent who were surveyed said they found information about farming at their farmers market,” Matteson said.
Farmers Neil Moseley of Pleasant Acre Farms in Clarks Hill [Ind.] and Jeremy Russell of Russell Sheep Co [in Eaton, Ind.], though much younger than this widening demographic, eagerly shared the trials and triumphs of their respective businesses in rural Indiana.
Retail agriculture — while gleaning a higher profit margin than commodity-based industry and affording farmers low-cost startups and farmers markets — also requires diversified production and marketing arrangements, plus financial challenges.
For Russell, working for a small sheep company has been, in part, about understanding the borrower. As a young man on his family’s conventional corn, soybean and sheep operation in Delaware County, he took an early interest in livestock.
The opportunity to talk to consumers at the farmers market about agriculture as a whole has been very rewarding, he said. As the business has evolved, Russell said he has figured out how to make more money with a rotational grazing system than by growing corn or soybeans. “A lot of people come up to me and ask if we’re organic or confinement — we say neither, but we tell them why,” he said.
Though [Neil] Moseley works at the Lafayette Farmers Market, he does not spend his time selling products, but talking to the customers. Hailing from a farrow-to-finish sow operation with 2,500 animals, he pursued a degree in agricultural systems management before shifting the business toward post-frame construction. “I wanted to get back to the farm — my younger brother had come back and taken over the row crop side. There wasn’t really a place for me,” he said.
Moseley asked the bank for a $2 million loan at 26 — a move that most banks are not too wild about, he said. He and his wife created a vegetable farm in 2009 to test the market. It was one acre with no hired employees built in a small tunnel they had purchased. They attended four farmers markets and created a website. They first went to the farmers market in 2010 with a fall lettuce display. That year, they jumped to 11 acres and bought a large high tunnel and started a Community Supported Agriculture program, in which individuals buy shares in a farm and fund the farm’s capital. They now are about 15 percent in a CSA, providing 20 weeks of produce from mid-May to October at the market for $11 per week.
As a high-volume, cash-based business, retail agriculture and CSA farms benefit from the establishment of benchmarks — standards to which individual operations can be compared. The easiest benchmark is a farm’s own production records. Since companies such as FCS want more robust benchmarks that can be spread on a county-wide basis, good financial records are key, Matteson said.
Ultimately, the passion and vision of small farmers will lead organizations such as [Farm Bureau] to shape policy that will help individual enterprises.