This month we speak with two women who have been promoting and tracking an emerging niche market in Alabama agriculture—the market for locally sourced food.
A recently released study commissioned by the North Alabama Food Bank, “Local Foods: Potential to Build Wealth & Health in Alabama, ” by national food system analyst Ken Meter, concludes that if 15 percent of Alabama residents bought their food from Alabama producers—rather than the current 0.2 percent—this would generate $980 million a year in new income for the sate.
The director of the North Alabama Food Bank, Kathryn Strickland, is one of our interview subjects. The other, Karen Wynne, is former director of the Alabama Sustainable Agriculture Network, who is now program director for the 10-year-old organization.
Director of the North Alabama Food Bank
We commissioned the Meter study because we were looking at ways to enhance our self-reliance as an agency and a region. We see local sourcing of food as a vehicle to do that. In the study, we were trying to gain a snapshot of where we are and what the potential is for locally sourced food. The results are both sobering and promising. In the last agriculture census, 2007, 54 percent of north Alabama farms had net losses, even though those farms made a significant contribution to the economy, over $200 million a year. If you adjust for inflation, our farmers were earning $89 million less than they were in 1969.
On the promising side, consumers in our north Alabama region are spending $2.4 billion a year on food, but $2.2 billion of that is outside the region, outflow. So there is significant turnaround opportunity. If you look at consumer trends, from the National Restaurant Association the number one trend is locally sourced meat and seafood and the second highest is local produce. The current Food Institute Report says the best way to enhance the health and wellness of consumers and reduce rising food prices is to address food origin, to reduce the farm-to-plate journey. Across the board, consumers want healthy food choices, and it crosses all social and economic levels. If demand is out in front of supply, that decreases the enormous risk that farmers take to meet this demand. And that’s why models like the CSA (community supported agriculture) are effective: The farmer has a commitment from the consumer.
You can see these trends in north Alabama. There were 17 farmers’ markets in the region in 1999, and in 2010 there are 125. If you look across the landscape, there are some innovative emerging businesses that are focused on local food: from composting to aeroponics to grass-fed beef cattle, and there is organic fertilizer being introduced by Alabama companies. I’ve heard that a lot of the CSAs are at full capacity.
There are also new ways of marketing products online. Some growers are concentrating on selling local products to school systems and other institutions. The state school system is trying to encourage local sourcing of food. There are still hurdles, but locally sourced foods are making inroads. The Jefferson County School System is making serious strides. And the Opelika schools have a history of sourcing locally.
A lot of the successful models for the local food business entail clusters of local food business. An example of that is a restaurant in Huntsville, 1892 East. The owner and chef have a creative relationship with local growers. Other restaurants are experimenting as a shareholder in a CSA farm, paying for supply in advance and providing cash flow for the farmer and receiving a discount in the summer when the supply comes in. Other restaurants are collaborating with Blue Pants Brewers, taking grain that could be wasted and making homemade bread out of it.
The Food Bank is in the beginning of its efforts. The focus now is to create markets for local farmers and to build a strong supply base of local farmers. There are some challenges at each step of the supply chain, but one of the big hurdles is infrastructure, for processing and distribution. We are examining ways we can use our food bank infrastructure, our warehouse and freezer and truck, to help aid local farmers to tap into new markets. And we are participating in a USDA research grant with Auburn, Tuskegee, Harvard, the University of Illinois and the Alabama Association of Food Banks, a research grant to examine how the food bank network can assist farmers to tap into these markets.
Program Director, Alabama Sustainable Agriculture Network
Local sourcing of food is a major trend. I’ve been to a lot of different parts of the country for 20 years or more, and I’ve seen it really taking off. People say the South is a little slower to get into it, and that might be. But if it’s more the craze in California, that just means there is more significant potential for further growth in our food economy here. Since 2003—when Alabama Sustainable Agriculture Network started—for the first five years, I felt like I had a pretty good concept of the things going on around the state in sustainable agriculture. But now it’s gone way beyond what you can keep track of, and that’s pretty exciting to me, that you can’t keep up with it.
One thing that is really promising is the market for grass fed beef. There are a lot of people looking at the health benefits of finishing beef on grass versus grain, and there are also related issues of humane animal care. At this point, we raise a lot of grass-fed cattle in Alabama, but we don’t export it, don’t sell a lot of finished product. So, we’re losing a lot of value. We have a great climate and plenty of grass and a lot of other resources at Auburn and other land grant universities, so it’s not such a stretch to see us finishing cattle and processing it here in Alabama as a higher value export product.
When we started, we did a lot of work on direct marketing, linking farmers directly with consumers and skipping the middleman. But ultimately, that’s only going to be a small portion of the market. So I think it’s great if we can keep doing that, but the next level is to look at the food distributors, and not just Alabama—to get products sold within the region.
In the past four years or so, things have really picked up speed in the food education end, and, with the recession, a lot of people are looking for different economic growth opportunities. A lot of people are doing local vegetable production, with organic or close to it, and selling through farmers’ markets and CSAs. Some of them have been pretty successful. We’ve had a tremendous growth in farmers markets. Some of the bigger vegetable farmers are selling there and take a lot less product to the retail market, and they make a significant amount of sales in a few hours and make more of a profit. They’re selling tomatoes by the quart, versus the 25-pound box.
The biggest challenge is just getting a handle on your market before your start production, if you’re selling something from the field. It’s being prepared to sell it before you harvest, knowing what people will want to buy. You do that by talking to experienced farmers who can help you with the more individualized markets. The growers are getting more sophisticated about this. I hear about some young farmers who take pictures of their crops with iPhones and send them to customers that day. For growers who have specialty crops, it’s a motivator for their customers to try something new.
Right now one of the big issues is looking at the infrastructure and connecting the dots. You have farmers and distributors who are interested in developing local markets, but they are not necessarily talking to each other. So, you have people who want to buy local food and can’t find it. You figure a way to get to them that won’t wear them down, versus just buying whatever comes off the Sysco truck and not having to worry about it.
Access to capital is always an issue. Farming is not a super profitable business, and if you’re trying to sell a traditional lender on lending money to an organic vegetable farm, they have to really take your word for a number of things that are not part of their business model—so the problem is finding alternatives for those traditional lenders. Most growers have to find alternative ways and build the business slowly, so that they don’t take on very much debt. It becomes a different kind of risk—more time than money.
The Alabama Sustainable Agriculture Network is 10 years old. It was formed at a 10-state conference, in a breakout section in which 15 people from Alabama got together and decided that we needed our own state organization. We started with a field day program, featuring farms that were doing innovative things around the state, and we went from there into educational programs, to link farmers with consumers and resources. We help people access information and resources—things that already exist but are hard to find. We offer training activities for farmers and community gardeners, and we are studying new and different markets. We learn from people who have already tried something, so that others can skip the hurdles. And we work with local groups interested in developing community-based local food systems.
Chris McFadyen is the editorial director of Business Alabama.
Interview by Chris McFadyen