Author: Rebekka Dudensing

Value-Added agriculture is often promoted as a way for farmers to capture a larger share of the food dollar and as a means of rural economic development. Under USDA definitions, farmers capture the enhanced value from either processing or intrinsic characteristics of the product (e.g., organically or locally grown). However, non-farm entrepreneurs within the regional economy can also add value by using local commodities in their products.

The table below provides an example of farm or non-farm entrepreneurs’ ability to capture a higher price and larger profit by processing locally-grown vegetables into salsa. The $1,000 in locally grown vegetables could be included in a jarred product worth almost $6,900. In the salsa scenario, sales and labor income are higher for both direct (entrepreneurs’) and community-wide impacts between businesses (indirect effects) and among households (induced effects). Labor income is double for the entrepreneur and triple for the community.

If a farmer processes the vegetables, s/he creates the additional value and retains the additional profit—a traditional value-added paradigm. If another business purchases the local vegetables, that business lengthens its longer value chain relative to purchasing wholesale vegetables from outside the region. 

Value-added presents promising opportunities to farmers, but it’s not for everyone. Only about 1.65% of US farms reported value-added product sales in the 2017 census of agriculture, and value-added sales were clustered among smaller farms. Farmers interested in value-added processing should consider the costs of labor (including their own), other inputs, and marketing and distribution when evaluating potential products.  

Example Economic Impacts of Raw Vegetable Sales versus Value-added Salsa

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Dudensing, Rebekka. “Value-Added Ag and Food Products.” Southern Ag Today 3(11.5). March 17, 2023. Permalink

Photo by Kunal Murumkar Patil: https://www.pexels.com/photo/bowl-of-hot-mexican-salsa-among-composed-bright-ingredients-3846896/

Americans don’t seem concerned about holiday spending. An October Gallup poll reported that we intend to spend 6-8% more on holiday gifts in 2022. The average of $932 was just $10 off the 2019 high of $942. Just over half plan to spend about the same amount as last year, while 17% plan to spend more and 26% plan to spend less. 

This is somewhat surprising given that consumer confidence inched up at the end of 2022 but still rivaled 1980 levels. Inflation slowed and unemployment dropped in the third quarter of 2022, but inflation remains well above average. The Federal Reserve has increased its interest rates six times this year with another hike expected before the end of 2022. Companies, including retailers usually adding holiday employees, announced layoffs throughout the fall, and the National Retail Federation expected seasonal hiring to decrease by 10-33% relative to 2021. 

A Deloitte study produced results similar to the Gallup poll, noting that after inflation, that money is expected to buy nine gifts rather than last year’s 16. Holiday spending plans are rosier than expectations for household financial expectations for 2023 in the Deloitte data. Holiday spending tends to trend with November unemployment and consumer sentiment (see chart). Holiday spending is a reflection of 2022 experiences as much as 2023 expectations. But, really, no one wants to give up holiday memories, many of which include gifting.

In other news, don’t forget to turn in your Ag Census form. Might be a fun way to spend time waiting for the kids to go to sleep on Christmas Eve or between bowl games. Filling it out while contemplating year-end business spending may economize on your holiday time.

Author: Rebekka Dudensing

Professor and Extension Specialist, Associate Vice President for Economic Development and Community Impact

rmdudensing@tamu.edu

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Photo by Ron Dauphin on Unsplash

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Duddensing, Rebekka. “Strong 2022 Holiday Spending Reflects Experiences and Expectations.” Southern Ag Today 2(52.5). December 23, 2022. Permalink

We all want the information we need when we need it. We want it to be easy to find and easy to understand. And we want to know we can trust it. That’s not too much to ask for.

The Texas Food Education & Discovery network (TXFED) aims to help local food producers and farmers markets to increase customers and sales and develop new market opportunities through online, on-demand training. Online courses provide content created by and for farmers & farmers market organizers, along with trusted organizations. 

TXFED’s first 9 courses, available with closed captioning and Spanish subtitles, cover topics ranging from whether selling at a farmers market is right for your business and how to make money at a farmers market to using social media to promote your farm. Multi-course series provides opportunities for more in-depth learning. Several additional courses are in development. For a limited time, these courses are free.

Thirteen collaborating organizations provide consistency in creating course outlines and content with input and additional videos and other content provided by more than 50 knowledgeable new farmers and farmers market organizers with different types of businesses and experiences relevant to each course. Courses are relatively short but include assessments, worksheets, and outside resources to help farmers put lessons to work. 

TXFED is funded in part by a grant from the USDA Agricultural Marketing Service, Farmers Market Promotion Program. The program is led by the Texas Center for Local Food. Other educational collaborators include the Texas A&M AgriLife Extension Service, The University of Texas – Rio Grande Valley Texas Rural Cooperative Center, the National Center for Appropriate Technology, the Small Producers Initiative at Texas State University. Business and association collaborators include Farmshare Austin, the Farmers Market Coalition, the Farm & Ranch Freedom Alliance, Grow North Texas, Terra Preta Farm, Texas Farmers Market, Texas Organic Farmers & Gardeners Association, and Texas Small Farmer & Ranchers Community-Based Organization.

Visit https://www.txfed.org/ to explore courses.

Dudensing, Rebekka. “On a Need-to-Know Basis: TXFED Online Training for Market Farmers“. Southern Ag Today 2(27.5). July 1, 2022. Permalink

Next week is Thanksgiving, and then the holiday season begins. “You get what you get and don’t throw a fit” may be the national holiday motto this year. National shipping companies have been warning of slow holiday shipping since September. You may be shopping for what you can find in stores near you. Fortunately, local shops have lots to offer. Plus, when you shop locally, your community gains not just the sales tax from your purchase, but also jobs and income, property tax, and vibrancy. If you’re avoiding crowds, many small businesses have website and are still offering curbside pickup.

The Small Business Administration (SBA) has co-sponsored Small Business Saturday (with American Express) since 2010. The SBA reported that last year, US consumers spent $19.8 billion at independent retailers and restaurants on Small Business Saturday. Still, a 2019 SBA study showed that 70% of U.S. consumers were unaware of the event. Now you know! 

Among Small Business Saturday shoppers in the 2019 survey, 97% agreed that small businesses are essential to their communities. The Small Business & Entrepreneurship Council notes 98% of businesses have fewer than 20 employees (96% have fewer than 10).

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Dudensing, Rebekka. “What does “Shop Small” mean for your Small Town?” Southern Ag Today 1(47.5). November 19, 2021. Permalink