Archive for January, 2009
As our economic challenges in this country continue to grow, I have started wondering how all the bad news on Wall Street will impact the local food movement. For years I have argued that food in this country has been a bargain and that consumers are both willing and able to pay a higher price for food that they consider tastier, safer or ,in this case, grown closer to home. I have cited the prices consumers are willing to pay for organic products as evidence that they are willing to step up and pay the premiums farmer’s need to make raising and selling into niche markets attractive.
Americans currently spend less than 10% of their disposable income on food, a figure which has slowly but steadily decreased over that past nearly 40 years. During the Great Depression nearly 25% of household income was spent on food.
The economic events of the past several months have made me worry that the tidal wave of support to coax local foods into the supply chain might come to a grinding halt. A recent report from the USDA states that in spite of rising food costs, food consumers are still continuing to budget the same per cent of household income for food (http://www.ers.usda.gov/AmberWaves/Sept … Income.pdf).
The report sees it as encouraging news but my reaction is, if food dollars aren’t going as far and families are still budgeting the same food dollars than they are either eating less or eating cheaper. While eating less may not be a bad thing for most US food consumers, eating cheaper could really hamper efforts to make locally and regionally grown foods more widely available. Many reading this will argue that locally grown does not necessarily mean more expensive. That may be true to a limited degree. I will leave that conversation for another day but I maintain that we are still a long way from the kind efficient infrastructure that makes locally grown foods widely available to all consumers.
Last week I shared these thoughts during my presentation at the Illinois Specialty Crop and Agritourism Conference in Springfield (http://www.specialtygrowers.org/confagenda.htm).
My audience was predominantly farmers engaged in on farm sales direct to consumers. These are the producers are on the front line of the local food movement. They were quick to reassure me that the demand for local food has remained strong. In fact Randy Graham, Co–owner of Curtis Orchard in Champaign (http://www.curtisorchard.com/index.php) went so far as to say he has seen an upsurge in interest for products straight from the farm. Others in the room nodded in agreement. My informal survey may not meet the rigors of sound market research but I took it as an encouraging sign. I can only speculate that the recent economic crisis is ushering in a “Back to Basics’ movement across the country. The per cent of household income spent on food may be in a holding pattern but perhaps consumers are shifting purchases from the local fast food establishment to the local farmer.
Do you need to be certified organic? It depends on your customer…
If you’re asking yourself this question, it’s probably safe to assume you are not a purist who would certify their farm organic simply for personal philosophy, but rather a grower who is deciding which market attributes and avenues best fit your business and your lifestyle. Getting a farm operation certified organic is certainly a commitment of time and resources (i.e. paperwork, inspections, certification fees), so it’s wise to make sure that farming organically fits your values and your marketing structure.
Those growers who are “relationship marketing” in a face-to-face context, such as farmers markets or CSAs, have the opportunity to interact with their customers directly, explain their production practices, and let the customer decide whether or not to buy. Those growers who are marketing in a more anonymous context, through a wholesaler or retail grocer for instance, might find that a third-party certification like “organic” will lend the credibility, and the traceability, necessary to command a premium price.
Several growers are finding success in the marketing “gray area” between conventional and organic. Their products may be unsprayed, pastured, natural, or local – credence attributes that are not necessarily verifiable, yet appealing enough for certain customers to pay a small premium while avoiding the “sticker shock” that can come with certified organic items. They read the local market and carve out a niche that is appropriate for their operation.
Do your market research and create a marketing plan for your farm, keeping in mind your lifestyle and income goals. This will help you decide if organic certification is right for you.
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