How can I add value to farm products to reduce my risk?
Answer: It’s frustrating for producers to be unable to sell all their product at the farmers market, CSA site, or other marketing events. Throwing perishable product away or giving it to the animals is not profitable. A value-added enterprise can be a good step toward increasing your profit and reducing your risk by taking out much of the perishability of the products.
The value of farm products can be increased in endless ways: by cleaning and cooling, packaging, processing, distributing, cooking, combining, churning, culturing, grinding, hulling, extracting, drying, smoking, handcrafting, spinning, and weaving.
Because of the many regulations involved with food processing, some people may choose to add value in other ways. On a larger scale, producer-controlled processing for energy, fiber, and other non-food uses are options. On a smaller scale, items such as flower arrangements, garlic braids, grapevine wreaths, willow baskets, wheat straw weavings, sheep and goat milk soaps, and wool mulch are a few examples. In addition, ideas for providing entertainment, information, and other services associated with direct marketing are abundant.
Besides offering a higher return, value-added products can open new markets, create recognition for a farm, expand the market season, and make a positive contribution to the community. However, adding value is not a panacea for all the problems rural America is facing. It is a long-term approach, not a “quick fix.” It requires the willingness and ability to take on risk, as well as adequate capital, management skills, and personal skills—such as the ability to interact with the public—to succeed.
A good resource for food products is Beyond Fresh: A Food Processing Guide for Texas Farmers. Taking a “farmer first” approach, this workbook helps you decide what products to create, how to make and sell them, and at what scale. It includes chapters on developing products, dealing with regulations and food safety laws, designing labels and packaging, and seeking funding for your new food enterprise. While it was developed for Texas farmers, much of its information applies to non-Texas farmers, too. NCAT’s Southwest Regional Director, Mike Morris, who is a co-author of the workbook, recently wrote a blog about the workbook that should interest you, as well.
ATTRA’s Scaling Up tutorial includes a lesson on value-added, which addresses sales outlet options, product development, processing options, and more. It also includes resources for further study.
Finally, the Value-Added section of the ATTRA website features a variety of resources on this topic, including publications, videos, and podcasts.