what can usda’s national office do for you?€¦ · the ne (including trader joe’s) employs a...

What Can USDA’s National Office Do For You?

The case of Local Food Research & Development

Debra Tropp, Deputy Director

Local Food Research & Development Division

USDA Agricultural Marketing Service

Mission, Programs and Services

Agency Connection to Local Food

Agricultural Marketing Act of 1946 and subsequent additions

Local Food Research & Development (LFRD) Structure

Program Themes

Deliverables

Applied research papers and guides

Facility design technical assistance

Targeted outreach

Interagency collaboration

AMS Grants and Opportunities

Farmers Market Promotion Program (FMPP)

Local Food Promotion Program (LFPP)

Specialty Crop Block Grant (SCBG)

Federal-State Marketing Improvement Program (FSMIP)

What do we mean by local food?

A food product that is raised, produced, aggregated, stored,

processed, and distributed in the locality or region in which the final

product is marketed.

USDA does not regulate the definition of local food, leaving it to

localities and states to determine appropriate boundaries.

Several USDA grant programs (including those administered by my

Agency) use a broad definition:

Less than 400 miles from the origin of the product, or

Within the State in which the product is produced.

Includes both direct-to-consumer sales AND intermediated sales

by third parties

Intermediated sales example: food sold by producers to

distributors/food hubs for aggregation and/or delivery to institutional

or commercial customers (i.e., restaurants, grocery stores,

schools/universities, hospitals)

Legislative Authority Supports USDA/AMS Interest

in Local Food Marketing

1946 Agricultural Marketing Act:

Agency mandated to reduce distribution costs and the price

spread between producers and consumers

Directed to market the “full production” of American farmers—

regardless of scale—in a useful, economical, profitable, and orderly

manner

Improvement of overall dietary and nutritional standards is a

primary policy goal

1976 Farmer to Consumer Direct Marketing Act:

Encourages promotion of direct farm marketing activities for

mutual benefit of farmers and consumers

Legislative Authority Supports USDA/AMS Interest

in Local Food Marketing

Bottom line: USDA/AMS is mandated to:

Support the development and creation of shorter food supply

chains wherever feasible

Work to ensure that food producers receive a greater share of the

final retail price that consumers pay

Support profitable marketing of all American farmers at all scale

levels

Promote direct marketing of farm products where it provides mutual

benefit to farmers and consumers

Challenges with Local Food Marketing

Not always easy for farmers to access local food marketing

channels and market local food successfully

Challenges:

Absence of timely, affordable market intelligence that outlines

emerging market opportunities and potential barriers to entry

Limited sales potential of direct farm marketing outlets, coupled

with hefty time and labor requirements

Institutional and commercial buyer specifications regarding

volume, quality, consistency, extended availability and/or food safety

certifications

Inadequate access to aggregation facilities that would give

smaller scale producers wider market access to larger-volume

customers

Outdated or inadequate infrastructure that makes it difficult to

meet consumer/buyer requirements for product condition and format

LFRD Division: How Do We Help?

Three areas of concentration:

Farmers Markets and Direct to Consumer Marketing

Food Value Chains and Food Hubs

Facility Design


Farmers Markets and Direct to Consumer Marketing:

Through market research, analysis, data products and other tools, we

help stakeholders better understand trends in the rapidly evolving direct

to consumer marketplace.

Maintains four national directories on local food (FMs [8,675], CSAs [733],

food hubs [171], on-farm markets [1,313]) at

www.usdalocalfooddirectories.com. Entries are voluntarily submitted.

Administers voluntary FM market manager surveys

Produces periodic reports on farmers market industry trends and other direct

to consumer marketing issues (e.g., CSA)

Looking to receive OMB approval to launch national surveys of CSA, food

hub and on-farm market managers (3 new directories launched in 2014)

Working to develop agritourism directory and crowdsourced FM price data

Managers: please add/update your directory listings at www.ams.usda.gov/services/local-regional/food-directories-update

http://www.usdalocalfooddirectories.com/


Food Value Chains and Food Hubs:

Study the formation of “food value chains”, an innovative business

model in which agricultural producers, processors, buyers, and other

supply chain members form collaborative, transparent partnerships

that intentionally attempt to weave business entrepreneurship with

social benefit.

“Food hubs”, a subset of food value chains, work to ramp up the

availability of local food in wholesale marketing channels by

offering affordable aggregation,distribution and marketing services

to small and mid-sized producers

First group to initiate food hub/aggregation research at USDA!

USDA believes regional food hubs can play an important

role in supporting these small and mid-size farmers through

aggregation, collective marketing, and facilitative services

Regional Food Hubs

Actively linking producers to

markets

On-farm pick up

Production and post-harvest

handling training

Business management

services and guidance

Value-added product

development

Food safety and GAP training

Liability insurance

Aggregation

Distribution

Brokering

Branding and market

development

Packaging and repacking

Light processing (trimming,

cutting, freezing)

Product Storage

“Buy Local” campaigns

Distributing to “food deserts”

Food bank donations

Health screenings, cooking

demonstrations

SNAP redemptions

Educational programs

Youth and community

employment opportunities

Defining Characteristics of Regional Food Hubs

Carry out or coordinate the aggregation, distribution, and

marketing of primarily locally/regionally produced foods

Move product from multiple producers to multiple markets

Producers considered valued business partners instead of

interchangeable suppliers

Committed to buying from small to mid-sized producers

whenever possible.

Use product differentiation strategies (e.g., identity preservation,

group branding, sustainable production practices, etc.) to ensure

that producers maximize returns from their products.

http://www.ers.usda.gov/data-products/food-dollar-series/documentation.aspx

Farm Share of U.S. Consumer Food Dollar (2014)

Different story in local food

systems…

In “short” supply chains, local

producers received up to seven

times the share of the retail price

compared to mainstream chains -

USDA ERS report

http://www.ers.usda.gov/media/122609/err99_1_.pdf

Food hubs often return between

75 to 85 percent of their wholesale

sales revenues to their producers -

USDA AMS report http://dx.doi.org/10.9752/MS046.04-

2012

In mainstream supply chains,

farmers retain only 17.2

cents of the consumer food

dollar on average (slightly

higher for fresh produce)

http://www.ers.usda.gov/data-products/food-dollar-series/documentation.aspx

http://www.ers.usda.gov/media/122609/err99_1_.pdf

http://dx.doi.org/10.9752/MS046.04-2012

Example One: Intervale Food Hub, Burlington, VT

Intervale works with producers to determine prices based on actual production costs for producers and what the market can realistically manage.

Intervale’s producers generally net 60-70% of the retail revenue obtained from CSAs and 85% of the revenue obtained from distribution to wholesale customers through the hub.

Example Two: Red Tomato, Canton, MA Coordinates aggregation, transportation and

sales for roughly 40 farmers to grocery stores in the NE (including Trader Joe’s)

Employs a variety of product differentiation strategies – regional branding, source identification and the verified use of sustainable production practices like IPM

November 2009 case study: retailer agreed to sell RT’s tomatoes at $2.79/lb. compared to standard retail price for the same commodity of $1.99/lb. given the unique attributes of the product

Combination of cost savings in shared logistics and a higher wholesale price led RT’s producers to receive 3x higher returns than they received for comparable items outside the value chain

Regional Food Hubs

0

40

80

120

160

200

240

280

320

Growth in the Number of Food Hubs (1970s-2015)*

Based on a working list of food hubs identified by the NGFN Food Hub Collaboration, Wallace Center

2015 National Food Hub Survey

(Michigan State/Wallace Center)

New food hubs continue to open for business and established food

hubs continue to thrive.

75 percent of food hubs are breaking even or better, an increase of

7% in 2 years.

Almost all surveyed food hubs expect their business to grow.

Food hub suppliers and customers are almost entirely regional.

More than 9 out of 10 food hub farm or ranch suppliers are located

within 400 miles of the hub.

3 out of 4 food hub customers are located within 400 miles of the hub.

Food hubs are good for small and medium sized farm operations.

More than 9 out of 10 food hubs source exclusively or mostly from

farms and ranches with gross sales less than $500,000.

Food hubs average nearly 80 farmer and food business suppliers.

2015 National Food Hub Survey

(Michigan State/Wallace Center)

Compliance with the Food Safety and Modernization Act (FSMA)

is a challenge that food hubs must address.

66 percent of hubs either prefer or require GAP certification.

The percent of hubs requiring Good Agricultural Practices (GAP)

certification increased 8% since 2013.

Food hubs are concerned about maintaining product supply and

keeping up with business growth.

Securing more supply is a concern for more than 50% of hubs

Fewer than half think they can address this problem within the next

year.

40% of hubs consider further growth a potential liability because of

inadequate capital, staff and warehouse capacity.

Moving Food Along the Value Chain:

Innovations in Regional Food Distribution (March 2012)

Regional Food Hub Resource Guide

Food hub impacts on regional food systems, and the resources

available to support their growth and development (April 2012)

Food Value Chains:

Creating Shared Value to Enhance Marketing Success

(May 2014)

Building a Food Hub from the Ground Up:

A Facility Design Case Study of Tuscarora Organic Growers

(February 2015)

Evaluating the Economic Impacts of Local & Regional Food

Systems:

A Toolkit to Guide Community Discussions, Assessments and

Choices (March 2016)

Recent LFRD Reports on Local Food Systems

Why an Economic Impact Toolkit?

The sharp increase in market demand for local foods, currently

estimated by USDA to be over $6 billion in value, has sparked a

groundswell of interest and investment in local food systems.

Community planners, public officials, and private foundations are

increasingly interested in exploring the potential of local food in

generating economic growth and business development.

Unfortunately, many of these initiatives lack a clear roadmap for

measuring and evaluating their overall impact.

Leads to adoption of inconsistent methods

Impedes accurate comparison of results across studies

Why an Economic Impact Toolkit?

Begs the question: how do we effectively and responsibly measure

the probable impact of planned local food system investments?

In response, USDA/AMS asked Colorado State University to convene

a group of leading U.S. researchers and consultants to synthesize

current best practices in local food economic impact analysis.

Team members selected because of their specific research

expertise in local food systems and economic impact

assessment.

What the Toolkit offers

Empowers community stakeholders to undertake reliable economic

impact assessments of planned local food interventions.

Equips stakeholders to gain broad-based support for local food projects

based on solid evidence drawn from well-accepted methods

Allows applicants and recipients of USDA/AMS local food grant awards to:

Develop appropriate frameworks for determining local food systems

priorities.

More accurately estimate project benefits and tradeoffs.

Encourages greater consistency and accuracy in research and evaluation

methods.

Project Team:

Dawn Thilmany, Coordinator, Colorado State University

Contributors:

David Conner, University of Vermont

Steve Deller, University of Wisconsin

David Hughes, University of Tennessee

Ken Meter and Megan Phillips Goldenberg, Crossroads Resource

Center

Alfonso Morales, University of Wisconsin

Todd Schmit, Cornell University

David Swenson, Iowa State University

Allie Bauman, Rebecca Hill, Becca Jablonski, Colorado State University

Editor:

Debra Tropp, USDA/AMS/TM/LFRD

Toolkit StructureCovers two stages of planning:

(1) Assessment

Modules 1-4:

Provides guidance on the preliminary stages of an

economic impact assessment - framing the scope of the

study, establishing suitable boundaries, identifying

relevant economic activities, using reliable data gathering

and survey techniques,

l

(2) Evaluation

Modules 5-7:

Overview of technical set of practices, including how to

conduct a more rigorous economic impact analysis using

input/output (IMPLAN) software

Economic Impact of Shared-Use KitchensNorth Central Region Case Study

Led by Purdue University, but taking place

throughout the North Central Region

Goals:

1. Identify factors that influence local grower

participation

2. Evaluate regional economic impacts

Methods:

1. Survey kitchens and kitchen clients

2. Visit kitchens

3. Hire analyst to support economic impact

assessment of project advisory team

For More Toolkit Information

Website, listserv, FAQs, upcoming regional

trainings: localfoodeconomics.com

Also available from AMS/LFRD webpage at

www.ams.usda.gov/services/local-regional

In the pipeline:

Fall 2016:

Community Supported Agriculture: New Models for

Changing Markets

(Examines results of national survey and focus group interviews

in six states)

Winter 2016:

Highlights of 2015 National Farmers Market Manager

Survey

Potential Demand for Local Fresh Produce by Mobile

Markets

Spring 2017:

The Promise of Urban Agriculture:

National Study of Commercial Farming in Urban Areas

Late Spring 2017: Release of Federal Reserve 15-chapter

compendium on regional economics and local food systems

(supported in part by USDA/AMS and USDA/RD)

Forthcoming Reports on Local Food Systems

Background on Urban Agriculture Project

USDA/AMS cooperative research study with Cornell University

Principal Investigators:

Anu Rangarajan, Director, Cornell Small Farms Program

Molly Riordan, Program Associate, Cornell Small Farms Program

Objectives:

Evaluate factors that have contributed to or inhibited the

success of commercial urban agriculture

Determine policy, investment and community actions that

could foster development of commercial urban agriculture

Identify strategic research, training, extension and education

needs to advance commercial urban farming

Background on Urban Agriculture Project

Defining "commercial urban agriculture"

Commercial:

earned revenue greater than $10,000

through multiple direct and wholesale channels, and

income earned from product sales accounts for a sizeable

portion of earned revenue.

Urban: includes peri-urban areas; using Weeks' (2010) definition,

urban and peri-urban places are "concentrations of people

whose lives

are organized around nonagricultural activities

where agriculture is not a primary land use, and

there may be competing land uses.

Case Study Farms

Case Studies are the primary foundation, supplemented by a literature

review, focus groups and site visits.

1. Little City Gardens- San Francisco, CA

2. Love Is Love Farm at Gaia Gardens- Atlanta, GA

3. Growing Home- Chicago, IL

4. Mellowfields Farm- Lawrence KS

5. Karen Fresh Garden- Kansas City, KS

6. Our School at Blair Grocery- New Orleans, LA

7. Brother Nature- Detroit, MI

8. Rising Pheasant Farm- Detroit, MI

9. Wilson Street Farm- Buffalo, NY

10. Brooklyn Grange- New York, NY

11. Green City Growers - Cleveland, OH

12. Side Yard Farm- Portland, OR

13. Mycopolitan Mushroom Co.- Philadelphia, PA

14. Springdale Farm- Austin, TX

LFRD Facility Design Services

Provides targeted site assessment and design services for clients

who are considering the construction or remodeling of wholesale

markets, farmers markets, public markets, and food hubs. These

facilities can be:

• indoors or outdoors,

• single buildings or building complexes,

• industrial or commercial

Our goal is to help maximize the reach of available construction

dollars by proposing creative solutions to design problems and

ways to keep costs within budget. The resulting facilities add to the

productivity, efficiency, and overall effectiveness of market operations.

Most market projects are driven by a local nonprofit or government entity

and depend on broad-based community and government support to

succeed. Our involvement often provides customers with the needed

information and technical credibility to move projects to the next stage of

development.

LFRD Facility Design Services

Our predesign services include assistance in:

Market analysis

Review of environmental issues

Site selection

Our design services include:

Initial design concept

Building cost study

Architectural rendering

We also provide varied support services to each customer throughout the

design, construction, and operational phases of the project, such as:

Review of equipment specifications

Advice on facilities management

Advice on energy efficiency

Markets Built with AMS Technical Assistance

• Santa Fe Farmers Market, New Mexico

• Mississippi State Farmers Market, Jackson

• Lansing City Market, Michigan

• Potala Market Place, Everett, Washington

• Walterboro Farmers Market, South Carolina

• Greenwood Uptown Farmers Market, South Carolina

Master Plans

• Central New York Regional Market, Syracuse, New York

• Proposed Birmingham, Alabama

• Proposed Sea Island Farmers Market, South Carolina

Proposed Market Site Development Plans

• Chester County Agricultural Economic Development Center (CCAEDC),

• South Carolina

• Shawnee Farmers Market, Kansas

• Headlands, Alabama, Food Hub with a community kitchen

• McGregor Farmer Market. Texas

• Brighton Farmers Market , New York

Proposed Indoor Public Markets

• Moore Street Market (Butcher Shop), Brooklyn, New York

• Broadway Market with a community kitchen

• Bowling Green with a community kitchen and bakery

Proposed Wholesale Market Master Plans

• North Ohio Food Terminal, Food District

• Capital District Farmers Market in Menands, New York

• Conceptual Prototype for a Self Sustain Refrigerated

Food Warehouse

34

Design Concept created by

Agricultural Marketing ServiceTransportation & Marketing Programs

35

The 26,000 square foot market was

built at the cost of $5 Million by a local

Santa Fe building contractor. This

facility is LEED Gold certified and

features innovative energy saving

devices. The structure features a

market hall for year round vending.

The market hall accommodates 50

indoor vendors. An additional 100

vendors are accommodated outside of

the building in the plaza area.

Santa Fe Farmers Market

36

Mississippi Farmers’ Market

Farmers’ Market

opened June 2006

Design through a

cooperative

effort with USDA

Agricultural Marketing Service Transportation and Marketing Programs

Marketing Services Branch

37

http://www.mdac.state.ms.us/Library/Marketing/MakeMineMississippi.html


Mississippi Farmers’ Market

38



David C. VanderKlok, AIA,

Michigan

Opening Day April 24, 2010

Lansing City Market

AMS provided Technical Design Assistance. The work was coordinated with customers and local

architects

40

Lansing City

Market

AMS provided Technical Design

Assistance. The work was coordinated

with customers and local architects 41

Participation in GroupGAP Task Force:

Worked with AMS Specialty Crop Inspection Division and the Wallace

Center to develop, implement and assess pilot GroupGAP project with

10 entities. GroupGAP national rollout took place in April 2016

Local Food, Local Places:

Represent USDA on EPA interagency task force that delivers intensive

technical assistance workshops on a competitive basis to communities

seeking help with local food system action plans.

Additional Research and TA Activities

Farmers Market Promotion Program

Local Food Promotion Program

Specialty Crop Block Grant Program

Specialty Crop Multistate Grants

Federal-State Marketing Improvement Program

AMS Grants and Opportunities

Farmers Market and Local Food Promotion

Program

Eligible entities include:

Agricultural Businesses Economic Development

Corporations

Producer Associations

Agricultural

Cooperatives

Local Governments Public Benefit

Corporations

CSA Networks Nonprofit Corporations Regional Farmers

Market Authorities

CSA Associations Producer Networks Tribal Governments

http://www.ams.usda.gov/services/grants



Purpose

• Develop, improve, expand, and provide outreach, training, and

technical assistance to, or

• assist in the development, improvement and expansion of

domestic farmers markets, roadside stands, community-

supported agriculture programs, agritourism activities, and

other direct producer-to-consumer market opportunities.



2016 FMPP Administrative Changes


Pre-2016 Grant Structure/Funding:

• All grants 24 months

• Max $100,000 per award

New in 2016:

• All grants 36 months

• Capacity Building Grants:Min: $50,000 Max: $250,000

• Community Development, Training and Technical

Assistance Grants: Min: $250,000 Max: $500,000



Example:

$75,000 was awarded to the City of Muskegon, MI to increase

resident awareness of locally sourced produce at the Muskegon

Farmers Market by:

• expanding a children’s educational program, Power of

Produce Club;

• facilitating a winter farmers market; and

• implementing a marketing campaign that utilizes farm tours

and provides technical assistance for farmers that plan to

implement their own farm tours.




Example:

$99,000 was awarded to the City of Aurora, IL to increase the

sales for farm vendors throughout the Market season by:

• creating a bilingual information resource on Aurora’s Farmers

Market website and a promotional campaign to increase the

Market’s visibility to low-income, high-obesity neighborhoods;

• developing bilingual online videos, in conjunction with local

Supplemental Nutrition Assistance Program (SNAP)

agencies, to show how easy it is to shop with SNAP at the

farmers market; and

• implementing a promotional campaign to strengthen

community awareness and attendance to the Aurora market

that includes cooking demonstrations at the market.




Purpose

• Develop, improve, expand, and provide outreach, training, and

technical assistance to, or assist in the development, improvement,

and expansion of local and regional food business enterprises

(including those that are not direct producer-to-consumer

markets).

LFPP projects must be aimed at processing, distributing, aggregating,

or storing locally or regionally produced food products.

Requires a cash or in-kind match of 25 percent of the total cost of the

project.



2016 LFPP Administrative Changes


Pre-2016 Grant Structure/Funding:

• Planning Grants: 12 months/Max $25,000 per award

• Implementation Grants: 24 months/Max $100,000 per

award

New in 2016:

• Planning Grants: 18 months. Min: $25,000, Max:

$100,000 per award

• Implementation Grants: 36 months, Min: $100,000,

Max: $500,000 per award



$95,130 was awarded to the City of Elgin, TX to provide technical

assistance to support value-added processing of local fruits and

vegetables. The work will support farmers, entrepreneurs, and

wholesale and institutional buyers in developing and managing new

markets.

Example:




$22,000 was awarded to the City of Buffalo, NY to determine demand

for a kitchen incubator, including assessing anticipated end users,

potential programming and staffing needs, sanitation and maintenance

needs, operating hours and regulations, and a fee structure.

Example:




• Funds projects that solely enhance the competitiveness

of specialty crops, including fruits, vegetables, tree nuts,

cut flowers, and other horticulture products.

• Funds awarded to State departments of agriculture in the

50 states and U.S. territories to partner with specialty

crop stakeholders to fulfill specialty crop priorities.

• Projects can focus on a wide variety of specialty crop

initiatives including food safety, education, marketing,

and research.




$29,600 was awarded to the Missouri Department of

Agriculture to partner with Kansas City Community Gardens

to

• improve gardening knowledge,

• increase access to healthy food, and

• increase fruit and vegetable production for low-income

urban gardeners.

The project provided education, greenhouse production of

high-yield food crops for transplant, cost-saving on bulk

seed, plant and fruit tree purchases, technical assistance

and community garden space.

Example:



Specialty Crop Multistate Program

• Funds projects that solely enhance the competitiveness

of specialty crops through collaborative, multi-state

projects that address regional or national level specialty

crop issues relating to food safety, plant pests and

disease, research, crop-specific projects, and marketing

and promotion.

• Funds awarded to State departments of agriculture in

partnership with other state entities in the 50 states and

U.S. territories.




• Funds market research projects that address barriers,

challenges, and opportunities in marketing, transporting,

and distributing U.S. food and agricultural products

domestically and internationally.

• Funds awarded to State departments of agriculture and

State experiment stations in the 50 states and U.S.

territories. Partnerships with stakeholders are

encouraged.

• Eligible categories include full range of commodity and

processed food, agricultural, forestry and horticultural

products.



An $80,444 matching grant was awarded to Washington

State University, in partnership with North West Agriculture

Business Center, to enhance the marketing of U.S.-grown

quinoa by addressing post-harvest infrastructural needs,

processing challenges, and new product development.

Example:


For Further Information

Grant Opportunity Contact Information

Farmers Market and Local Food

Promotion Program

Ronald Howell

(202) 720-2188

[email protected]

Specialty Crop Block Grant

Program

John Miklozek

(202) 720-1403

[email protected]

Federal-State Market

Improvement Program and

Specialty Crop Multistate

Program

Janise Zygmont

(202) 720-5024

[email protected]

mailto:[email protected]



Debra Tropp, Deputy Director

Local Food Research and Development Division

Phone: (202) 720-8326

Email: [email protected]

Website:

www.ams.usda.gov/services/local-regional

Contact Information


http://www.ams.usda.gov/services/local-regional

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