Category: Specialty Topics

Marketing can feel like a mystery to farmers who are focused on growing their products, responding to changes in weather, and the day-to-day demands of managing a farm. Even more challenging is the fact that marketing has changed dramatically over the last decade. Previously, farmers had two primary marketing channels, packing houses or roadside stands. There are now new sales venues from community supported agriculture, farmers’ markets, direct contracts with the hospitality and retail industries, and online sales platforms. With changing consumer preferences for sustainably and locally grown foods, new avenues to advertise and make sales in the digital age, and the disruption to regional, national, and international food supply chains caused by the COVID-19 pandemic, farmers are finding themselves in a new paradigm. With so many innovative marketing opportunities, they are unsure of which ones to pursue.

The United States Department of Agriculture Economic Research Service estimated the number of farmers’ markets increased by 180% between 2007 and 2014 and the number of regional food hubs increased by more than 288% (Low et al. 2015). In addition to these structural changes, consumers’ demand for food products has been evolving with a growing demand for locally, sustainably produced goods, organic or otherwise, that are of the highest quality (Roper & Rumble 2018). In 2020, US farmers made $9 billion in direct food sales, and increase of 3% from 2015 (USDA NASS 2022b). Direct food sales in the Southeast accounted for just 7% of these sales, $609 million (USDA NASS 2022a). Florida was the only state in the Southeast that made it to the top ten of direct food sales with $247 million, 41% of the regions total (USDA NASS 2022b). Please refer to https://southernagtoday.org/2022/06/local-food-sales-practices/ for more detailed information on local food sales in the Southeast.

This proliferation of niche and specialty markets are most accessible to small-scale farmers who are focused on quality and diversity and whose small size makes them nimbler to meet a particular buyer’s requirements and obtain the premiums for meeting them. The ability to participate in a variety of markets allows agribusinesses to have multiple revenue streams to diversify their risk so they can still earn an income when there is a disruption in one market. Farmers in the Southeast, in particular, may have more opportunities to take advantage of direct-to-consumer marketing schemes to be on par with the use of these markets by farmers in other regions of the US (USDA NASS 2022b).

While creating a marketing plan may seem daunting, it is a straightforward process when broken down into nine easy steps: 

If you are interested in learning more about creating your own marketing plan and utilizing social media to market your agricultural services and products, you can find workbooks and step by instructional videos in English and Spanish at https://ruralengagement.org/digital-marketing-toolkit/

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References

Low, Sarah A., Aaron Adalja, Elizabeth Beaulieu, Nigel Key, Steve Martinez, Alex Melton, Agnes Perez, Katherine Ralston, Hayden Stewart, Shellye Suttles, Stephen Vogel, and Becca B.R. Jablonski. (2015). Trends in U.S. Local and Regional Food Systems, AP-068, U.S. Department of Agriculture, Economic Research Service, January 2015. Available at https://www.ers.usda.gov/webdocs/publications/42805/51173_ap068.pdf?v=6801

Roper, C & Rumble, J. (2018) Talking local: Florida consumers’ reasons for purchasing local food. Available at  https://edis.ifas.ufl.edu/publication/WC176

United States Department of Agriculture National Agricultural Statistics Service (USDA NASS). (2022a). Census of Agriculture: 2020 Local Food Marketing Practice Survey. 

United States Department of Agriculture National Agricultural Statistics Service (USDA NASS). (2022b). Direct Farm Sales of Food: Results from the 2020 Local Food Marketing Practices Survey. Available at https://www.nass.usda.gov/Publications/Highlights/2022/local-foods.pdf

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Authors:

Trent Blare

Assistant Professor in Food and Resource Economics at the Tropical Research and Education Center, Homestead Florida

Lauri Baker

Associate Professor in Agricultural Education and Communication at the Center for Public Issues Education, Gainesville, Florida

Fredy Ballen

Data Management Analyst II at the Tropical Research and Education Center, Homestead Florida

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Blare, Trent, Lauri Baker, and Fredy Ballen. “How to Create a Marketing Plan in the Digital Era.” Southern Ag Today 2(51.5). December 16, 2022. Permalink

The United States has faced a shortage of farmworkers for several decades. In areas of the country that grow labor intensive crops, the lack of a reliable supply of agricultural workers is one of the main concerns among farmers. The reduction in the availability of workers in the fields is attributed to multiple factors, including a reduction in the number of undocumented immigrants engaging in agricultural work, increased border enforcement, and the reticence of native-born individuals to take physically demanding jobs even in periods of high unemployment (Gutierrez-Li, 2022). 

While the decline in the number of farmworkers may be explained in part by fewer people interested in taking agricultural jobs, the exodus to other sectors is also increasing over time. One of the main industries to which agricultural workers are moving is the field of construction. This sector requires a similar skillset to agricultural work, which facilitates workers’ mobility out of the farm sector (Barham et al., 2020). One incentive that motivates farmworkers to leave farm work to find jobs in construction is relatively higher wages. According to the U.S. Bureau of Labor Statistics, the mean hourly wage of a construction worker in 2021 was $21.22, compared to $14.27 in the agricultural sector. 

In addition to offering better wages, the construction sector has been luring farmworkers as metropolitan areas in the nation are experiencing rapid growth, thereby requiring additional labor to complete real estate developments. As seen in Figure 1, some of the fastest growing cities are in the Southeast. These include areas–Charlotte/Raleigh-Durham in North Carolina, Nashville in Tennessee, Atlanta in Georgia, Jacksonville/ Miami in Florida, and multiple cities (Austin, Dallas, Houston, San Antonio, Fort Worth) in Texas—have also experienced a sizable increase in population. The rise in urbanization in southern states has been driven by their relatively larger percentages of gross domestic product (GDP) growth as shown in Figure 2. If urban development continues to accelerate in states where the agricultural industry is heavily dependent on a human workforce, it is expected that farm labor shortages there may continue to worsen, and the demand for H-2A foreign agricultural workers will continue to rise. 

Figure 1. Population size and growth rates in the 50 largest U.S. cities

Figure 2. Growth in Gross Domestic Product in 2022

References

Barham, B. L., Melo, A. P., & Hertz, T. (2020). Earnings, wages, and poverty outcomes of US farm and low‐skill workers. Applied Economic Perspectives and Policy, 42(2), 307-334.

Frey, W. (2021). 2020 Census: big cities grew and became more diverse, especially among their youth. Report. Brookings Institution. Washington D.C.

Gutierrez-Li, A. (2021). The H-2A visa program: addressing farm labor scarcity in North Carolina. NC State Economist. North Carolina State University.

The American Growth Project. (2022). 2022’s Fastest-growing U.S. cities, ranked. October report. Kenan Institute of Private Enterprise. University of North Carolina, Chapel Hill.

Author: Alejandro Gutierrez-Li

Assistant Professor and Extension Economist

alejandro-gil@ncsu.edu

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Gutierrez-Li, Alejandro. “Urban Development and Farm Labor Scarcity: Are Workers Leaving Agriculture for Construction?” Southern Ag Today 2(50.5). December 9, 2022. Permalink

Growers in Florida and California, where the majority of fresh tomatoes are grown in the U.S., continue to lose market share to Mexico (due in part to relatively higher U.S. farm labor wages and overlapping seasonal production) and Canada (greenhouse production), resulting in reduced numbers and consolidation among Florida’s growers (Fig. 1). Over the past two decades, shipping point prices reported by the USDA Agricultural Marketing Service are trending upward. Input prices are on the rise since 2020 due to global shocks such as the COVID-19 pandemic and Russia-Ukraine conflict, resulting in record high prices for phosphorus, nitrogen, potash, cardboard boxes and wooden pallets, and irrigation supplies.  Truck driver shortages remain the biggest challenge in distribution logistics, driven mainly by too few drivers and rising fuel costs. 

Figure 1. Fresh tomatoes (field and hothouse): Supply and use, 1960 – 2020 (USDA-ERS)

Fresh produce consumption trends are affected by food prices, food safety, and dietary concerns. In a survey of Southeastern U.S. tomato buyers, fresh produce consumers reported they are more concerned about the safety of U.S. foods relative to U.S. food price trends (Maples et al., 2018). Also, people are searching for food relationships in response to diet-related disease incidences in themselves and their family members (Thapaliya et al., 2017). Since 1996 (just after Canada, Mexico, and the U.S. signed the North American Free Trade Act), per capita availability of fresh tomatoes (field and greenhouse, domestic and imported sources) hovered between 16-17 pounds a year, up from about 11 lbs. per person in 1960. 

The 2015–2020 Dietary Guidelines for American recommends an average adult may consume 2,000 calories per day, and suggest a well-balanced diet include two cups of fruit and 2.5 cups of vegetables. USDA food consumption surveys find that the average American falls far short, consuming only 0.9 (45% of recommended volumes) cups of fruit and 1.4 (56%) cups of vegetables per day. Are veggies really cost-prohibitive? Using the average vegetable price of $0.80 per cup and multiplying by the recommended 2.5 cups per day for a healthy diet, the cost of including vegetables in a healthy diet to equals $2.00 per day, about 20 percent of the average daily food cost of approximately $10 per person. Recently, the Bureau of Labor Statistics consumer price index (CPI) revealed that people are paying prices that are nearly double since 2000. 

There is a need for improved understanding of the roles and dynamic interactions among fresh produce supply chain participants to improve industry coordination and competitiveness, expand U.S. market demand, and build in supply chain resiliency.

Reference

Maples, M.C.*, M.G. Interis, K.L. Morgan, and A. Harri. 2018. Consumer Willingness to Pay for Environmental Production Attributes of Fresh Tomatoes. Journal of Agricultural and Applied Economics 50(1): 1-21. 

Stewart, H., and J. Hyman. August 2019. Fruit and Vegetable Prices. U.S. Department of Agriculture, Economic Research Service. Link: https://www.ers.usda.gov/data-products/fruit-and-vegetable-prices/

Thapaliya, S.*, M.G. Interis, A. Collart, L. Walters, and K.L. Morgan. 2017. Are Consumer Health Concerns Influencing Direct-from-Producer Purchasing Decisions? Journal of Agricultural and Applied Economics 49(2): 211-231.

U.S. Department of Agriculture and U.S. Department of Health and Human Services. December 2020. Dietary Guidelines for Americans, 2020-2025. 9th Edition. Link: DietaryGuidelines.gov

U.S. Department of Agriculture, Economic Research Service. 1 April 2020. Based on data from various sources as documented on the Food Availability Data System home page. Link: USDA ERS – Food Availability (Per Capita) Data System

U.S. Bureau of Labor Statistics. 2 August 2022. Consumer Price Index. Link: USDA ERS – Food Availability (Per Capita) Data System

Author: Kimberly L. Morgan

Associate Professor

Author: Xiuri Cui

Ph. D Candidate

Author: Zhengfei Guan

Assistant Professor

Morgan, Kimberly L., Xiuri Cui, and Zhengfei Guan. “Fresh Tomato Supply Chain: Challenges in Production & Markets.” Southern Ag Today 2(46.5). November 11, 2022. Permalink

2022 marks the 100^th anniversary of the Capper-Volstead Act, which gives farmers and ranchers the legal right to join together in cooperative associations. The founders of the first agricultural cooperatives held strong convictions and above all else, loyalty to the ideals of collective bargaining and market power for small farmers. Whether competing with large, investor-owned firms or serving an unmet need, this collection of farmers and ranchers planted a belief system and philosophy that would endure for decades. They built a culture around these values and grew a socio-economic model that enveloped the surrounding rural communities where the feed mill, cotton gin or grain storage silo set. These cooperatives invested in the future by developing capital locally and generating an economy that is a mainstay in the agricultural industry today. 

Cooperatives are important on the national landscape for multiple reasons. According to the National Council of Farmer Cooperatives, 1,779 cooperatives in the United States provide300,000 jobs, sales exceeding $200 billion, with $7.8 billion in net income generated in their local economies. Therefore, it is imperative to ensure these businesses are successful. Not surprisingly then, a major part of the cooperative business culture is a recognition of the need for continual education for the board of directors and managers. As leaders of the cooperative system, directors and managers take time outside of the boardroom to participate in various seminars, webinars, conferences, and other educational events each year in order to protect their cooperative. 

For example, the Texas Agricultural Cooperative Council hosts a variety of educational events each year, including:

• Director Development workshops
• The Farm Store Summit
• Board Chair Conference
• The TACC annual meeting
• The Academy of Cooperative Excellence
• South Texas Leadership Conference

If you were to run for a position on the board of directors of your local cooperative, what could you expect in terms of training topics? In our experience, much of director training is geared to simple best business practices and provide information on the challenges facing the modern agricultural industry: carbon sequestration, climate change, agricultural policy, surviving drought, and changes in land use. But some topics are more germane to cooperatives: distribution of cooperative returns, cooperative taxation, maintaining the separate roles of managers and directors, running a board meeting, legal issues, fiduciary duties, and simply, leadership.

The leadership demands on cooperative boards of directors and managers are increasingly becoming a topic of great interest and research. Current leaders are expected to meet new and complex economic and global challenges while continually pressing against the modern challenges of governance, such as inclusion, diversity, and the increasing difficulty of leadership succession. Park, Friend, McKee, and Manley (2019) introduced the concept that leadership competency in agricultural cooperatives is defined by six essential elements of effective leadership: consciousness, conduct, connectedness, interaction, representation, and cooperation.  Cooperative leaders meet many challenges by applying these skills to communicate, inspire others and evoke change in this increasingly complex industry. These are the leaders which will continue to thrive and weather any storm, and it is their agricultural cooperatives that help promote this legacy of leadership education. 

For more information:

The National Council of Farmer Cooperatives,  http://ncfc.org

Park, J.L., Friend, D., McKee, G., & Manley, M. (2019). A framework for training and assessment of the 21^st century cooperative. Western Economics Forum, 17(2 ).https://ageconsearch.umn.edu/record/298048/files/WEF17.2%20-%201.pdf

Diane Friend

Assistant Professor of Instruction 

Department of Agribusiness

Texas A&M University – Kingsville

diane.friend@tamuk.edu

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Friend, Diane. “A Legacy of Cooperative Leadership“. Southern Ag Today 2(45.5). November 4, 2022. Permalink

Producers face production and marketing risks that could affect the operation’s financial performance every growing season. Developing strategies to mitigate such risk is essential for the health of the operation. USDA offers a number of programs to insure specialty crops including individual insurance programs, federal crop insurance, whole-farm revenue protection, and the production and revenue history insurance plan. 

Interest in insurance plans for specialty crops has increased with the Federal Crop Insurance program alone providing coverage for specialty crops amounting to more than $22 Billion in 2021 (Figure 1). In terms of broad categories, fruits and tree nuts receiving the highest share followed by vegetables and horticulture nursery crops.

Figure 1. Federal Crop Insurance Coverage for Specialty Crops, years 2007-2021. 

Some expansions of insurance products and programs to specialty crops piloted in 2021 with the production and revenue history insurance plan made available to FL strawberry producers for the 2021 crop year. Interested in learning more about available programs? A list of individual crop insurance programs is provided by the USDA Risk Management Agency: hyperlink https://www.rma.usda.gov/en/Topics/Specialty-Crops

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Bampasidou, Maria . “Insurance Plans for Specialty Crops“. Southern Ag Today 2(44.5). October 28, 2022. Permalink