The maze of greenhouses, warehouses, and office spaces that is home to the Elkwood, Va.-based Blue Ridge Produce could have been custom-built for the company’s unique vision: to aggregate, process, grow, and promote local produce. But it wasn’t. In fact, the company’s founders lucked into finding an existing facility sprawled across 33 acres of land just south of the D.C. suburbs.

Blue Ridge Produce threw open the doors to its giant warehouse this growing season to welcome produce from across Virginia, only to have it quickly disseminated to wholesale buyers like Whole Foods and the University of Virginia in nearby Charlottesville.

The company also plans to lease 80,000 square feet of greenhouses to farmers who will grow tomatoes and lettuce year-round. Meanwhile, an extra warehouse will serve as a commercial kitchen for making jam, salsa, or other value-added products out of local produce. And the office spaces? Those will be a business incubator for food-oriented companies just getting off the ground.

Jim Epstein, a food-minded real estate developer, founded Blue Ridge Produce with the owner of a small retail market in Charlottesville, Mark Seale, after stumbling upon a common vision — and this facility. Together, the two men hope to create a food hub much like the many that have sprouted up around the country to help the local food industry scale up in recent years. The difference, however, is that Epstein and Seale are hoping to make a profit.

And the fact that this model is being seen as an investment opportunity says something about the stability, inevitability, and urgency of the local food market.

Many food hubs serve as the marketing and distributing arms for growers wanting to break into the larger-scale markets of nearby cities. And many are nonprofits (including Charlottesville’s Local Food Hub). They are often built from the growers up, establishing their own distribution streams that run parallel to the mainstream food system and include deliveries to individual restaurants or homes. But Epstein and Seale want to work within the existing channels, recruiting Sysco and Aramark to add local produce to their D.C.-bound truckloads, while aggregating food directly from farmers.

James Barham, an agricultural economist with the U.S. Department of Agriculture’s marketing service, who has visited the facility twice, says Blue Ridge’s laser-tight focus on aggregation is unique.

“They can really complement and add value to the traditional distribution system … and focus on [helping] producers building capacity to meet demand.” And, he adds, “Oh boy, do they have the space for it.”

More produce

Seale’s son-of-a-farmer finesse helped him convince growers who had long sold poultry or dairy to commodity markets that they could sell locally the produce they had begun to grow on the side. For the last several decades, a large swath of Virginia’s farm country has been in large-scale meat and dairy production, but Blue Ridge Produce is creating an incentive — and market — for more of those farmers to grow and sell fruits and vegetables. This effort could help chip away at the shortage of produce grown stateside (we don’t grow anywhere near enough for every American to eat their daily recommended three servings) and reduce the quantity of produce shipped from California.

But like other efforts to scale up of the local food movement, Blue Ridge has seen its share of complexity. While it may be Virginia-grown, most of the produce isn’t organic — at least not yet. But Seale is encouraging the farms he works with to transition acreage to organic over time. And while the company’s website says it will “strive to source from organic, local and low-spray producers,” it’s unclear when this will occur.

But organic or not, a switch to produce can be good for farmers. A study of farms in Virginia’s Culpepper County found that locally sold produce earned up to $3,000 per acre versus the $250 per acre earned in the commodity grain or feed crops that have traditionally been grown in the area.

“Some of our farmers put additional acreage into produce this season, because they knew we’d be there to sell it,” Seale says.

The 40 or so farmers who sold through Blue Ridge this past year were mostly small- to mid-sized operations, ranging from one to 2,000 acres in production. Many said they like working with a business that aims to make both of them more money in the process.

“I think there’s an attitudinal difference between for-profit and nonprofit,” Epstein said. “Our growers want us to make money, to be financially stable.”

Market demands

After seeing the demand for local food grow over the last several years, Epstein and Seale worked with investors and D.C.’s food-conscious crowd to raise $1.3 million in about four months in late 2010. They purchased the facility in time for last spring’s growing season and quickly got farmers and buyers on board, completing their first full season this year.

While many of the small-scale farmers that populate the growing regions in Virginia sell their wares at D.C. farmers markets, you won’t find much of their produce in the grocery stores. And they just can’t grow enough to meet the needs of such institutional buyers, like hospitals, schools, and universities.

Epstein conducted a feasibility study [PDF] on the local market in the fall of 2010, confirming his hunch that these bigger buyers want — and need — more local produce to satisfy customers. Students at the University of Virginia, for example, had begun boycotting dining facilities on the Charlottesville campus for not serving more of the local food that is now prevalent in nearby restaurants.

The local produce that D.C. restaurateurs like Nora Pouillon of Restaurant Nora first began demanding a quarter-century ago has trickled through farmers markets but has hit a distributing bottleneck. And farmers won’t grow more food until there is more infrastructure to bridge production and demand.

Despite the efforts of companies like Whole Foods and Chipotle to source directly from individual farmers, more than 99 percent of agricultural products in the U.S. were still being bought and sold through wholesale markets in 2010.

At the same time, Epstein and Seale’s feasibility study found nearly $17 billion being spent each year on fruits and vegetables in the tri-state area surrounding and including D.C. — with less than 7 percent of that produce grown in the region. If Blue Ridge Produce could “move that needle” just 1 percent toward local, it would max out the company’s facility at $100 million worth of produce, Epstein says.

Blue Ridge Produce is working to add more than aggregation to the on-site menu as they respond to emerging demands in the market.

The company is interviewing farmers and cooks now who could take up shop in the greenhouses and commercial kitchen spaces, growing some veggies year-round while creating products out of others to help address one of the biggest obstacles facing an all-local food system here: the off-season.

But all this is secondary to growing what they started this past year — a business that brings a bit of certainty and some higher wages to farmers who rarely have both.

“Jim and I, we don’t want our local product to be a cheap one,” says Seale, who’s set up the business as a benefit corporation focused on the farmers. “We have the ability to show Virginia growers that farmers can be profitable for years and years to come.”

Standing on the edge of a streamside habitat he helped restore, Virginia farmer Buff Showalter interrupts himself mid-sentence to point out a pair of hummingbirds overhead, barely visible as they sketch busy circles against a blue-sky backdrop. By late August, he says, there will be hundreds of them flitting around their favorite jewelweed wildflowers in this forage-covered patch of wetlands.

The patch used to be a favorite drinking hole for Showalter’s cattle as well, before he realized that having cows near and in the waterways could contribute to pollution in the nearby Chesapeake Bay. A decade later, the stream is fenced off and teaming with wild-looking shrubs and trees that help soak up pollutants before they reach the water.

Growing up fishing and birdwatching on the fourth-generation farm where he now raises cows and chickens, Showalter watched over time as some local species declined with the water quality in streams running through the property. The bay, meanwhile, has become a receptacle for agriculture nutrients such as nitrogen and phosphorous — so much so that in 2010 it contained the nation’s third-largest dead zone (an area where generations of dying algae blooms have left the water oxygen-free and inhospitable to all aquatic life).

Showalter started doing his “small part” to improve the quality of the water running off his farm in the early 2000s. Along with setting aside land for marshes, Showalter began implementing rotational grazing for his cattle, allowing the soil to rest. These days, he is far from alone in his conservation efforts as more livestock farmers in the region work to shrink their piece of the pollution pie.

Photo by Ole Bendik Kvisberg.

The area surrounding the Chesapeake is well-known for its concentrated animal feeding operations, or CAFOs, which are regulated — at least in theory — by the Environmental Protection Agency (EPA). But small- and medium-sized farms and ranches present a different set of challenges. With animals often grazing on the land, these farms are also sources of “nonpoint pollution,” which are, by definition, harder to pinpoint.

Conservation groups in the area have had success in helping these farmers make small changes to farming practices, like fencing off streams and implementing rotational grazing. But — with just under half of Chesapeake Bay’s unhealthy nitrogen load coming from farms — they still have a ways to go.

Farm bill funding?

Libby Norris works as a liaison between farmers and the Chesapeake Bay Foundation, which has taken the lead on helping farms change their practices. She says farmers like Showalter end up taking on these projects for a host of reasons. Some see it as the right thing to do as stewards of the land, and others do it because there is money to help pay for the projects — or at least there has been in the past.

The 2008 farm bill set aside $188 million over four years specifically for conservation projects and technical assistance on farms in the watershed, which were deemed a high priority. But a repeat of that funding level in the current farm bill is highly unlikely. (Congress returns from recess in September, at which point it’s still unclear whether they’ll be able to extend the current bill or negotiate a new five-year bill.)

Doug Siglin, federal affairs director for the Chesapeake Bay Foundation, says the Senate’s version of the bill, passed in June, includes a “comparable level” of hard-fought funding for Chesapeake projects under a regional conservation program. But the House version of the bill doesn’t include that language at this point.

Meanwhile, the Clean Water Act and related directives require that measures be in place by 2017 to move the bay more than halfway toward its cleanup goals, which — along with occasional visits from environmental regulators — has driven a sense of urgency among area farmers. The act requires that measures be fully in place by 2025 to restore the Chesapeake to health in the following years.

“Our farmers are under tremendous pressure that isn’t [the same] in Illinois or Iowa or Washington state or anywhere else,” says Siglin, who’s worked with legislators for years to help fund conservation projects. “The funding for [conservation projects] and the amount of money that’s available to make the changes is important.”

“Relationships are priceless”

Norris, who grew up on a Nebraska farm and now works with farmers in the watershed to implement better environmental practices, says each farm has its own unique needs. She can think of 15 different ways to install a watering system, for example, depending on the farm’s elevation, water source, and goals.

After more than a decade in the field, Norris has built relationships with farmers who otherwise bristle at visits from the EPA, but appreciate her help. Her position — funded by farm bill dollars — entails visiting farms to give technical advice on projects and letting farmers know about USDA and state programs that split the cost of those projects.

“Most farmers in the valley know Libby [Norris]. They respect her. Those kind of relationships are priceless,” says Showalter, who’s worked with Norris for a dozen years on various projects, only a few of which have received outside funding.

It’s also telling that Showalter — a self-described libertarian who would prefer to pay for all the projects himself — sees funding conservation funding as necessary for now.

“If we want to clean up the bay, some of the money, unfortunately, is going to have to come from the United States government,” he says.