The biggest problem I see with direct marketing (of highly regulated meats)
being the salvation for the small farmer is the sucessful ones will become
large farms. To do it right a person ends up running three businesses. A
farm. A processing plant. And a distribution company.
We sell mostly to restaurants....pork, ducks, and chickens. We've been in
it long enough to see the restaurants all show seasonal patterns and almost
all of them are affected by local economies but we continually pick up
enough new accounts that our sales continue on a solid uptrend. Right now,
we are fortunate in that our sales are no longer doubling every year. That
was fun for a while but we are too big to keep up with that anymore. We
are at a scale to justify our (very small) USDA processing plant but I doubt
most will ever get to that level let alone get to a level big enough to be a
worthwhile account for a inspected facility. Dealing with USDA isn't for
everyone. USDA is dangling the rural development money in front of small
processing plants right now. Every once in a while I toy with the idea of
putting up a new 90,000 square foot red meat and poultry
slaughter/processing plant and turning our existing plant into a ready to
eat facility (smoking and cooking). We are down to virtually no red meat
and poultry plants in our area and it sure looks like this whole direct
marketing thing is finally taking off in the midwest. Finding processing is
the biggest obstacle for most.
.
I imagine though on this list that I'm not even a farmer. :) Got to go
check my sows.
Greg
----- Original Message -----
From: "KV9U" <mrfarm@mwt.net>
To: <graze-l@witt.ac.nz>
Sent: Thursday, June 08, 2006 10:17 AM
Subject: Re: [Graze-l] Trending into the future
>I have to agree with much of this. Transportation costs do seem to be such
>a low part of the product cost, that it may not impact end retail price.
>The main effect could be the consumer's lower standard of living that will
>make it more difficult to buy the products with a lower income. Especially
>pricier, upscale designer produce.
>
> While we have been direct marketing for several years, we were aware from
> talking to other direct from the farm marketers that getting customers to
> buy at the farm level was very difficult even 10 years ago when they
> noticed a significant decrease over a period beginning less than a decade
> before that . The farmers markets do allow buyers to get the best produce
> available, but that is still a small amount of the market in most areas.
>
> The hard part is to get local businesses to handle local food. Walmart is
> becoming the main food source in our area and I see they do handle some
> local products such as butter and cheese from our local creamery. The
> other "surviving" supermarket, does not like to buy local
berries, because
> they want products that do not spoil easily and are able to withstand
> handling.
>
> One of the largest CSA operations in the midwest, which I believe does
> over half a million in sales now, is a few miles from our farm and they
> seem to be doing OK with gradual expansion over the past couple of
> decades. Their customers are primarily in populated upscale areas within
> 150 miles or less. It is amazing to see the kinds of equipment that have
> developed and purchased over the years to do large scale NOP certified
> produce production.
>
> Perhaps Tom Wrchota might comment on how things are going for his farm and
> for others similar to his, since he has the family sized direct marketing
> type of farm.
>
> Sincerely,
>
> Rick Williams
> Misty Ridge Farm
> Custom grazed dairy heifers and Jersey steers and direct marketed produce
> Viroqua, WI
>
>
>
>
> F. W. Owen wrote:
>
>>>Note that higher oil prices are now a significant factor.
>>>Perfect opportunity for USA growers to position themselves in the
>>>consumer
>>>market against foreign food.
>>>
>>
>>I thought we hashed this out a couple of days ago. Higher oil prices
are
>>NOT a significant factor in cross country or transocean transport.
>>
>>You are making a reasonable assumption but it is just isn't factual.
>>
>>USDA AMS tracks trucking rates. It is the same or less as two years
ago.
>>Supply and demand sets those rates. They aren't set by fuel costs.
>>
>>Ocean going ships transport agricultural commodities so cheaply that
the
>>freight just isn't a significant factor in a pound of food.
>>
>>However, fuel for consumer's cars is so high that it is significantly
>>cutting back on people running all around to find multiple sources of
>>local food. This was apparent in 2005 already and is worsening.
>>
>>There is lots of talk around local foods but sales of local foods are
>>definitely going in the wrong direction. Marketing methods for local
food
>>have been misguided and are pretty much dead in the water.
>>
>>Farm markets are not a factor in the US food distribution. The total
>>amount sold is microscopic. Wishing doesn't translate into reality.
That
>>is primarily a social activity.
>>
>>The continuing trend is one trip shopping at the supermarket. THAT'S
>>where we need to place our local produce.
>>
>>
>
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