Question of the Week
Answer: Food hubs can help agricultural producers achieve and maintain profitable businesses. A 2011 survey found that a food hub working with a median of 40 suppliers has the ability to increase producer profitability by enhancing access to commercial markets, purchasing seed, scheduling planting dates, and projecting sales for the season (Barham et al., 2012). As with any farm enterprise or marketing outlet, working with a food hub requires careful planning. This includes evaluating the relationship between working with a food hub and the goals established for the farm. It requires a careful examination of current on-farm resources, such as labor, equipment, and infrastructure, as well as what is needed in order to meet the needs of the food hub. Filtering the opportunity to work with a food hub through a farm’s mission statement and business plan will help determine whether or not the food hub is a good marketing outlet to pursue.
Costs of Production
Understanding costs of production can provide a basis for determining the success of a farm enterprise. Accurate recordkeeping and cost analysis will help determine whether producing a specific product is profitable and can help in determining labor, equipment, and infrastructure needs for selling that product to a food hub. Having accurate information on farm income and expenses will also help determine the price and revenue you will need in order to make a profit by selling through a food hub. It will also allow you to review whether or not it is cost-effective to implement certain production practices that differentiate and add value to your products, such as being certified organic or GAP (Good Agricultural Practices) certified. Crop and livestock enterprise budgets are important decision-analysis tools useful for understanding costs of production and developing a whole-farm budget.
Working closely with producers is a defining characteristic of a food hub. Food hub operators not only manage the supply and demand of products between producers and buyers, but also play an important role in providing technical assistance and logistical support to their producers. By providing producers with information related to production costs, including processing, distribution, and marketing, food hubs better equip those producers to determine if a product will be profitable. This requires the producers to receive timely access to information, knowledge, and tools and materials they need to succeed. Sharing knowledge and coordinating planting dates, crop varieties, harvest dates, and quantities can result in access to higher quality and more competitive markets that deliver premium prices to the producer.
Crop planning is an important component for producers in working with food hubs. In order for a food hub to manage an account, they expect a certain quantity at a specific date from a producer. From a crop-planning prospective, a producer needs to determine what crop(s) and/or variety to grow for a food hub, how much to grow, where it will be planted, and dates for starting seed and transplanting that correspond to each harvest date. Many food hubs work with producers and buyers prior to the growing season to coordinate production planning. This not only provides peace of mind for the producers in knowing that there is a market and acceptable price for their products; it also allows growers to cut costs by purchasing bulk seed, fertilizer, and other supplies together. Crop planning starts with organizing the production within a single year. It relies on matching the cultural needs of crops to your farm soil types and climate and evaluating the frequency of succession plantings for a consistent supply. Using methods for extending the season and planting extra crops can help manage supply risks. Annual crop plans then become part of a long-term rotational plan for increasing soil fertility and yields.
Once a food hub has established a market for a product, it will allocate the production among producers and determine how much each will supply. Although a buyer is primarily interested in a crop in general, it is important for the producer to pay attention to variety selection. A crop variety must not only be suitable for your farm's soil and climate, but must also meet the specifications of the buyer, such as size, appearance, and shelf life. The producer has the option of choosing a variety that will offer higher yields or disease resistance, as long as that choice doesn’t jeopardize either the buyer specifications or the farm’s bottom line. Evaluating varieties for better storability may also be critical in producing for a food hub, with the understanding that as a crop’s shelf life increases, quality, including taste and appearance, decreases.
I recommend that you consult the ATTRA publication Food Hubs: A Producer Guide to learn much more on this topic. This publication focuses on providing producers with information, resources, and case studies specific to understanding how food hubs can provide new marketing outlets. In includes a list of further resources that can serve as additional avenues of study.
Barham, James, Debra Tropp, Kathleen Enterline, Jeff Farbman, John Fisk, and Stacia Kiraly. 2012. Regional Food Hub Resource Guide. USDA-AMS, Washington, DC.
« How can I improve poor soil for fruit plants? :: How can I control flatweed in my pasture organically? »
No Comments for this post yet...