As commodity prices falter in the global market and input costs continue to grow, economists warn the road to higher prices for production crops and the return of more steady economic times could be marked by slow growth and uncertainty.
While adjusting to unstable crop prices and the trend of production agriculture's stale economy in recent months is causing concern for many, at least one segment of the industry is experiencing a modest revival. While specialty crops, specifically fruit, vegetable and nut production, has its own set of challenges, the popularity of farm-to-table food production and direct-to-consumer marketing represent a boost in farming economy, at least for smaller, independent local and regional farm operators.
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According to a recent USDA-Economic Research Agency report, producer participation in local food systems is growing and the value of local food sales, defined as the sale of food for human consumption through both direct-to-consumer and intermediated marketing channels, appears to be increasing.
The number of farms with direct-to-consumer sales increased by nearly 40 percent between 2002 and 2012. Agricultural Resource and Management Survey (ARMS) and census of agriculture data indicate that local food sales totaled an estimated $6.1 billion in 2012, according to the latest USDA.
Consumers have more opportunities to purchase food directly from producers, with 8,268 farmers’ markets operating in 2014, up 180 percent since 2006. A USDA study notes that growing interest in local foods in the United States is the result of consumer interest in environmental and community concerns, where community concerns include supporting local farmers and the local economy but also increasing access to healthful foods.
Adding to the success of food-to-table farm operations may be the rise in self-service or pick-your-own farming operations in recent years.
Local grown is working
Specialty farmer Gary Marburger, of Marburger Orchard in Central Texas, has been growing peaches for 36 years on his family farm just south of Fredericksburg. Since his early days of farming and his first peach orchard, Marburger has added fresh vegetables and most recently strawberries and blackberries to his offerings.
A number of years back, Marburger picked up on the wave of farm-to-table marketing after so many customers would drive over an hour from San Antonio and Austin to purchase his sweet peaches and fresh vegetables and berries, many wanting to pick their own to ensure the most fresh, vine ripened varieties available.
Now Marburger's operation is predominantly a pick-your-own farm, and his success has been so great that on many days during the season he is forced to close his gates to prevent long lines of cars wanting to gain access, only to be turned away.
He says he has learned through the years to depend on his Internet site to notify customers on his planned operating hours and the availability of fresh fruits and vegetables to prevent them from driving long distances only to leave empty handed.
Part of his decision to turn to self-service farming was because of the limited shelf-life of fresh peaches, which can easily become bruised in shipment. Now, the demand for his farm grown-food comes solely in the form of consumers driving to his farm.
Marburger is not alone in making a move toward direct marketing farm products. With USDA's push to increase fresh fruits and vegetables not only on consumer's tables but also at school lunch counters, local and regional specialty farmers are experiencing a growth surge that seems to be riding high on the demand for fresh, locally-grown products.
Like the upswing in local farmers markets, locally grown food products at pick-your-own farms are experiencing growth and popularity at a time when production farming is suffering from unstable global prices and rising production costs.
In 2012, 163,675 farms (7.8 percent of U.S. farms) were marketing foods locally, defined as conducting either direct-to-consumer (DTC) or intermediated sales of food for human consumption, according to census of agriculture data. Of these farms, 70 percent used only DTC marketing channels, which include farmers’ markets and community supported agriculture (CSA) arrangements.
Farms with gross cash farm income below $75,000 accounted for 85 percent of local
food farms in 2012, according to census data. These farms are estimated to account for only 13 percent of local food sales. Local food farms with gross cash farm income above $350,000 accounted for 5 percent of local food farms and 67 percent of sales.
Farms selling local food through direct marketing channels were more likely to remain in business from 2007- 2012 than all farms not using DTC marketing channels, according to census of agriculture data.
For farmers considering direct sales, USDA says understanding who buys local foods and why is valuable for targeting marketing efforts by producers, grocery stores, restaurants, and others needing information on consumer demand for local food. ERS analysis of the USDA Farm to School Census, 2011-2012, finds farm to school programs exist in more than 4 out of 10 school districts across the country.
USDA-ERS analysis of 2006 Nielsen Homescan data finds that selected produce prices at direct-to-consumer (DTC) outlets are generally lower, on average, than prices at retail stores in all seasons. Nonetheless, DTC food prices for some product/location combinations were higher than retail store prices.
While direct marketing is not for every farm, some production agriculture operations are beginning to turn to alternative farming revenue as a way to ride the current lull in the farm economy. Some are considering direct sales to compliment their larger operations and others are looking at non-traditional revenue from hunting operations or agritainment, like corn mazes and seasonal holiday farm tours.
Whether such alternative farming operations will continue to be successful or not is unknown, but it seems certain that at least some farmers have found it to be an economic boost at a time when farm income has dropped as a result of a faltering agricultural economy.