Ecomomic splendor in the grass. I just completed a profile of one of the most exciting food production ideas I have seen in a long time.  Hillside Farmers Co-op. in Northfield, Minnesota, initiated by Latino immigrants, raises free-range chickens on scattered small, one-quarter acre sites.  This makes it a great model for urban farmers as well as rural.

By staying small, co-op leader, Regi Haslett-Marroquin told me, Latino farmers will be able to start a farm even though they have very little capital to work with.  In just a few weeks, each farm can sell about a thousand chickens.  That quick turnaround will be key to building savings.  Over time, it will allow farmers to make more expansive choices in the future, he says – perhaps to buy their own land, or to start supportive businesses in the region.  By keeping each production unit small and family-sized, Marroquin believes, farmers can have a great deal of independence, and the network of small producers can more easily respond to changing market conditions.

Start-up costs are relatively small.  The Co-op has designed simple chicken barns, framed from wood and covered with plastic sheets, that provide shelter for the birds from spring through fall.  Each barn has large doors through which young chicks can stroll at will – and do so, because their feed is outside.

Hillside Co-op’s chickens “work out” every day (they are not raised in winter).  Running through fields, pulling sprouted barley grass out of the ground, and searching out organic grains to eat from scattered feeding stations, the chicks build muscle tone.  This is a marked contrast to industrial farms in which so-called “free-range” chickens are raised.  In those confined operations, there may be a small door for chickens to use to walk outside, but few of the birds even realize they have that choice.

Marroquin promises that production practices will be highly sustainable.  He says Co-op farmers will rotate grains, grasses, and perennial crops in their fields, building new organic matter in the soil.  This rotation will also help the birds to be healthy.  Feed selections ensure that the meat from these chickens is high in omega-3 oils.

In order to efficiently process these chickens for consumers, Co-op leaders hope to run a large processing plant someday.  Yet that must wait until the producers reach enough volume to use processing lines well.  Finished birds will be distributed through an existing business, Thousand Hills Cattle Company, of Cannon Falls.

 The Co-op’s success, Marroquin adds, will depend on its ability to organize elements of the mainstream economy to create an unconventional outcome – ownership for Latinos.  By carefully networking with local business leaders and economic developers, Marroquin has scored generous donations of land and equipment to help the Co-op get underway, despite its limited resources.

Marroquin recently made a big splash when he presented his vision for the Co-op in a plenary speech at the Community Food Security Conference annual meeting in Des Moines in October.  He will be featured again at the Home Grown Economy forum, sponsored by Rep. Collin Peterson, the chair of the U.S. House Agriculture Committee, on February 16, 2010, in Marshall, Minnesota.

You can read the full story, and view photos, at the Edible Twin Cities website.

I welcome your comments!

Minnesota food system study — building trust is good business

I just published a new study of the Minnesota food system.  The main take-home message is that building trust is good for business.  Close relationships with suppliers and customers are exactly what allow food firms to respond to changing conditions.

The report, “Mapping the Minnesota Food Industry,” was commissioned by Blue Cross and Blue Shield of Minnesota’s Center for Prevention, which has launched a Healthy Eating Minnesota initiative.  The full study is available for free download at http://www.crcworks.org/mnfood.pdf.

My favorite part of the work was interviewing food businesses.  Even some of the more successful, multi-million dollar firms felt they could not do everything they need to do because economic structures get in the way.

One apple grower complained that his apples, lovingly tended for a full season, gain more value in the 36 hours after he picks them, once they enter the distribution stream, than they gain during the five-month growing season.  He added that the food economy has no way of rewarding producers for quality, since daily transactions are based on price and quantity.

Minnesota is a global center for food business.  Of the state’s top 20 manufacturing firms, seven are food manufacturers and distributors.  These seven earn $114 billion of revenue each year, two-thirds of all revenue earned by the state’s leading firms.  The state has 17,000 food-related businesses, hiring a combined 316,000 employees who earn $7.8 billion of wage and farm income.

With 80,000 farms selling over $13 billion of crops and livestock each year, Minnesota is also the seventh-largest farm state.  However, over the past decade, state farmers have lost an average of nearly one half billion dollars each year producing these foodstuffs.  Despite doubling productivity, Minnesota farmers earned $1.1 billion less from commodity sales in 2007 than they did in 1969, in inflation-adjusted dollars.

Meanwhile, state consumers buy $12 billion of food each year.  Experts estimate that 90% of this ($10 billion) is sourced outside of the state, meaning consumers spend a great deal of money that leaves Minnesota.  Only $23 million of the foods farmers sell (three-tenths of one percent) are sold directly to consumers.

The study also shows that outcomes for consumers have not been positive.  Two of every three Minnesotans are overweight.  Nearly a third of all residents are obese.  The Centers for Disease Control estimates the costs of treating obesity-related diseases in the state to be $1.3 billion – and other researchers report twice those costs.  Food-related medical conditions, combined with a lack of exercise, have become a leading cause of death.  Although mortality rates for diet-related diseases in the Twin Cities are among the lowest for metro areas in the U.S., only 24% of adults eat the recommended five servings of fruit and vegetables per day.

I would add that three themes characterize the emerging businesses that are leading the way in creating a new, more community-oriented food economy in the state.  First, these firms value trusting relationships.  Second, they plan for an uncertain future – especially the fact we don’t know if we will have oil, or at what cost, in a few years.  Third, successful firms build a business that recycles resources within the state, rather than exporting them.

I would welcome comments and discussion as people read the study.

Vast potential: a farm grows in Brooklyn. Photo: Added Value

EPA reminds that brownfield moneys can be used to convert polluted land into working farms in inner-city areas. I saw the excellent film “The Garden,” documenting the destruction of the largest community farm in the U.S. (South Central LA) in 2006. Will and Erika Allen are coming to Minnesota again. Over breakfast, friends asked about the potential for urban food production.

I think the potential is enormous, especially in formerly industrial cities, where the big factories are not going to come back, but there are large tracts of vacant land that already have water mains (think irrigation) running under them. Each of these cities spends billions of dollars for food, and can generate significant local income by building the farms and distribution channels needed to cycle that food within city borders. We’ll also need to grow new urban farmers, and tap the excellent skills that many new immigrants already have in growing food.

Hoping the USDA will focus next week on turning urban lands into productive farms, I’ve finished revising a brief resource guide for urban agriculture I handed out at the Urban Extension Educators conference when I spoke there in May. Let me know if this is useful, or how to improve it!

Did you know that forty-one percent of all U.S. agricultural commodities are sold from farms in metropolitan counties?

Were you aware that 55% of the money made from producing farm commodities was made in metropolitan areas in 2007 ($15.7 billion of $28.7 billion)?

Moreover, Department of Defense studies show that Victory Gardens during World War II produced 40% of all produce consumed by Americans, after two seasons of gardening. This shows the potential for small-scale activity adding up to a big difference.

This is all part of a bigger shift that America, and USDA, are going to need to make — to focus on food, people, and communities, rather than primarily on commodities. That, in fact, is the theme of this year’s Community Food Security Coalition Conference in Des Moines from October 10-13 — “From Commodities to Communities.”

If you care about eating healthy food, you are probably already hard at work to build a better food supply for yourself.  You already know that raising food in our cities will be increasingly important.  Yet getting political support for this requires making a convincing case, and this means having compelling numbers.  The federal Census of Agriculture mainly covers rural areas.  How can you encourage the government to collect more data that will help the cause?

The Census of Agriculture is now looking for input on data they should collect in the next census.  They want your ideas by Friday, August 28.  This is a great time to offer your suggestions.

For years, the Census has focused on farmers — the crops and livestock they grow, and the farms they work.  It has not really measured whether the foods consumers eat are produced close to their homes or not.  With the emergence of the community-based food movement, the Census will need to devote more attention to food.

For my work studying local food economies, I work with data a great deal.  So I have prepared a set of recommendations for the Census.  I’d like your feedback on these.  You can find my ideas here.  You can certainly write comments here, as a response to this post, but you can also write the Census of Agriculture directly and make your own suggestions.

You can post your own comments directly to the USDA web site.

My proposal calls for lots of new data to be compiled.  We can no longer limit ourselves to reporting simply on commodities.  We need to create entire food systems that are localized, and that build health, wealth, connections and capacities in our communities.

As it is, only 0.4% of the $300 billion of products farmers sell are sold directly to consumers.  American consumers need $1 trillion of food each year.  That gives us an enormous potential market for local foods.  I welcome your thoughts on how we collect the right data to help move us toward vibrant community based food systems.

USDA released the 2007 Agriculture Census data today, giving Americans a far more detailed understanding of agricultural trends — just as interest in local foods expands dramatically.

For me, one of the key indicators of the growth of interest in community-based foods is the rapidly rising sales of food direct from farmers to consumers. Direct food sales rose a whopping 49 percent to $1.2 billion in 2007, up from $812 million in 2002. This includes farmstand, farmers market, internet, or other direct sales of fruit, vegetables, meats, and many other foods.

Once adjusted for inflation, that rise is not quite as steep, but still amounts to an increase of 30 percent in five years.

Sales of organic foods rose even more rapidly, more than tripling to $1.7 billion in 2007 from $393 million in 2002. This is an increase of 335 percent, though it lowers to 281 percent once inflation is taken into account.

Responding to consumer interest in fresh fruits and vegetables, farms are also selling more fresh produce, the new data shows.

Sales of fruit totaled $18.6 billion for the U.S. in 2007, up 35 percent from five years before. Vegetable sales rose 15 percent to $14.7 billion. The number of farms selling fruit rose 5 percent to 112,690, while 69,100 farms sold vegetables, an increase of 17 percent.

Diet experts recommend that everyone eat five servings of fruit and vegetables each day. Moreover, produce purchases could bring significant economic benefits during troubled times. Iowa State University economist David Swenson calculates that if residents of one eight-county region in north central Iowa ate five locally-produced fresh fruits and vegetables each day for jjust three months of the year, it would create 457 new jobs and generate $6.3 million in new labor income in that locale alone.

Total sales of all farm commodities rose to $297 billion from $200 billion in 2002. Farmers earned $56 billion more from marketing commodities in 2007 than it cost to produce them, according to the census, earning a net cash income of $75 billion. Comparable USDA figures for 2002 were a $48 billion farm production surplus, and $41 billion of net farm income.

Higher commodity prices helped farm sales recover from their recent slump, yet production costs are rising, too. USDA estimates that both fertilizer and fuel costs have nearly doubled in the past five years.

USDA estimates that farm income in 2008 was similar to 2007 levels. Yet agency economists predict that farm income “may well be lower in 2009.”

The census website has more information about farm conditions in your region, including interactive tables that will direct you to data for any state in the union. You may want to post some of your favorite findings, or pose questions as a response to this post.

The industry rule of thumb is that organic food sales are rising 20% a year. However, the WSJ‘s data, drawn from the respected Nutrition Business Journal, projects that organic-food sales will grow to $15.5 billion nationally this year — a 12% rise over 2005.

Moreover, the NBJ data shows that organic-food sales grew 16% from 2004 to 2005. This means two straight years of growth below the touted 20% rate — and slowing. Sales growth is forecast to slip from $1.9 billion to $1.7 billion from 2005 to 2006.

This may indicate that organic suppliers just can’t keep with rising demand, or it may mean that consumers aren’t convinced they want to pay higher prices for organic food items. Falling growth rates may also foreshadow reduced prices for organics — netting, in turn, less income for the farmers and workers who bring these products to our shelves.

Most retailers say they can’t keep up with rising demand for organic and natural food products. Producers who want to shift to organics say the transition is difficult and expensive. Sales through large supermarket chains may further reduce the farmer’s share of the food dollar, discouraging new producers from making the shift.

One key force that drives chains like Wal-Mart is substandard pay for labor. A Senate committee calculated that the federal government subsidizes Wal Mart $2,000 for each worker it hires, due to higher public costs for unemployment insurance and health care.

Organic Monitor reports that Europe is the place to look to understand future U.S. trends, since the market is more mature there. As of 2002, Europe organic sales were growing 7.8% — and were projected to hover from 5 to 7%.

America is scheduled to write a new farm bill in 2007. With the World Trade Organization ruling that our farm subsidies distort trade, and public expenses for flood relief and the war effort taxing the treasury, this could be a time of interesting shifts in how we view farm policy.

Moreover, both farmer and consumer groups say subsidies are harming Americans and developing nations (see Tom Philpott’s fine story “I’m Hatin’ It“).

On the other hand, there are also signs that the same coalition of grain traders and producer groups will persuade Congress to extend the provisions of the existing farm bill for a few more years.

This gets me thinking about what a proper farm bill should do.

The first thing to note is: We don’t need a farm bill in 2007. We need a food bill, or a rural development bill. We need to invest in communities, not commodities.

We support farmers in the U.S. because we want to ensure access to healthy food. But the vast majority of the $250 billion in farm commodities farmers sell in this country each year are just that: commodities. They are raw materials for industry. Fresh-food items are a tiny proportion of what is sold by growers. In fact, only 0.5% of U.S. food trade involves direct sales by farmers to consumers, as the Agriculture Census shows. Most commodities are sold to processors, who trade for a higher price, add value by creating a food product, or feed animals raised on industrial lots. Much of our corn is converted into corn sweeteners; most soybeans end up as animal food. There is no reason our federal dollars should subsidize cheap commodities for industrial production.

Moreover, on the eating end, things are spinning out of balance. Two of every three Americans are overweight. The medical costs of obesity now amount to $118 billion per year. Half of all public-school students can’t afford to pay full rates for school lunch. Ten percent of all households will face food shortages this year. America loses 5,000 citizens a year to food poisoning. As I mentioned in a recent post, the U.S. is about to become a net food importer.

If our farm bill is intended to ensure reliable supplies of food, and healthy eating, it has failed miserably.

My food bill of 2007 would:

1. use federal dollars to invest in infrastructure to make community-based food networks more effective;
2. connect urban consumers with specific rural regions so local citizens groups can more effectively set local food policies;
3. build capacity in rural communities, laying a foundation for community economic development;
4. invest in ecosystem protection; and
5. create specific policies that support healthier farm practices.

My research over the past 20 years suggests that federal dollars are best used to make specific and lasting investments in rural and urban communities — not to create cash flow for farmers (or anyone else, except perhaps limited-means people). Certainly there is no justification for farm policies that primarily benefit the wealthy. No one person or family should be able to obtain more than $30,000 in subsidies in any year.

The government also has a role to play in assuring equality of opportunity, making sure no region or group of stakeholders chronically fares better in the food and resource economy than any other.

Farmers make up less than two percent of the American population. It’s time to allow urbanites to help shape food policy in ways they will never be able to accomplish in a farm bill.

I’d welcome additional recommendations. There are many more issues to cover, which I will address in future posts.

Trade data for December have not been released yet. When they are, we’ll know if the Journal’s prediction is true. Still, one look at USDA Economic Research Service (ERS) numbers shows the trend is upon us.

The U.S. enjoyed an agricultural trade balance of $12 billion four years ago. By November 2005, we barely had a surplus, after a slide of $5 billion in one year. It seems to be a matter of when, not if.

I like to eat great cheeses and wines from France and Italy, and I enjoy tropical fruits in the middle of winter. When the U.S. was a dominant food supplier, this seemed rather like the natural order of things. But now U.S. imports of meat and grains — to name two commodities that used to be our strength — are rising. America now imports two dollars of feed grains for every three dollars of exports, and imports $2.5 billion more red meats than it exports, ERS data show.

I work with farmers and others striving to build local food markets across the country. In my travels, I have picked up a few glimpses of what changes are afoot:

• In the Central Coast of California (south of the Bay Area), as NPR reported a year ago, it is cheaper to buy an artichoke grown in South America than to buy one from one of the massive local farms near Watsonville that specialize in this crop.
• The state of California, long viewed as the source of food for much of the U.S., now imports a net of $5 billion of food per year. New competitors in China, Japan, and elsewhere in Asia are emerging as cheaper producers of staples like raspberries.
• The average food item sold in the Midwestern heartland travels 1,500 miles from producer to consumer, as the Leopold Center for Sustainable Agriculture reports.
• Farmers in Minnesota have lost $1 billion each year over the past seven years producing crops and livestock, according to Bureau of Economic Analysis data.

If America becomes a net food importer, we’ll face greater costs. We’ll spend more for the energy needed to bring food to our tables. Already we spend about $139 billion each year paying for the energy required to grow and distribute food. That’s far more than cost of the first year of the war in Iraq.

Moreover, Congress is about to write a new Farm Bill in 2007. Our increasing dependence on food imports will force us to completely rewrite our subsidy programs. For one thing, our farm policy assumes that our government can effectively intervene in food markets. This will not be the case when we are net food importers.

Further, the World Trade Organization has ruled our farm subsidies a violation of global trade policies. The U.S. government is inclined to ignore this ruling, but will have a tougher time doing so when we are dependent on others for food.

I believe reducing these subsidies will be good for America. As it is, government programs create a situation where farmers suffer big losses. Subsidies end up taking more money out of rural communities than they put back in. They have shaped America’s economy so farmers produce food commodities as raw materials for industry very efficiently — but where only one half of one percent of all foods raised are sold directly by farmers to consumers. An Iowa State University study shows that subsidies play a large role in raising land prices higher than farmers can pay from growing food. Traders benefit far more than farmers or rural communities. And in the post-Katrina era, amidst an expensive war, it is not clear where the money will come from.

I find myself hoping that this new emergence of food imports will serve as a wake-up call to all of us who eat. I hope it will encourage us to learn more about where our food comes from, to get acquainted with more farmers, and to invest in more localized food processing and distribution. The reward will be healthier urban and rural citizens, and, assuming we reclaim our ability to feed ourselves, a stronger economy.