Food Hub Feasibility in Oregon’s Mid-Willamette Valley: Interviews with Conventional and Organic Small and Mid-Sized Farmers

Organic Agriculture September 28, 2018 Print Friendly and PDF

eOrganic authors:

Eliza Smith, Oregon State University

Javier Fernandez-Salvador, Oregon State University

Introduction

A food hub is a centralized location, either brick and mortar or online-based, that connects farmers and food buyers. Food hubs are becoming an increasingly common model for producers to sell their products in local markets (Colasanti et al., 2018). Food hubs may be a website where farmers post their products for sale, or a physical location that provides services to growers such as aggregation and distribution management, a commercial kitchen, or a USDA meat-processing facility (Colasanti et al., 2018). Food hubs may also be a vehicle to educate the community on the value of buying products from local producers (Cantrell and Heuer, 2014). Food hubs can be especially beneficial to small growers because they provide infrastructure and services that those growers may not have the means to provide on their farms (Conner et al., 2017). In fact, the 2017 Food Hub Survey showed that over 90% of food hubs had “increasing small and mid-sized producers’ access to markets” included in their mission (Colasanti et al., 2018). A previous study showed that food hubs are most successful in metropolitan areas because of their accessibility to growers, wholesale buyers, and retail consumers (Fischer et al., 2013). For example, in Portland, Oregon the nonprofit Ecotrust organizes both an online and physical location food hub. The physical food hub is The Redd on Salmon Street and the online food hub is located at food-hub.org.

Introduction to the Food Hub Feasibility Survey

Salem is the capital of Oregon with a population of 168,000. It is the second-largest city in Oregon, behind Portland. In 2016, the City of Salem proposed a food hub as one option to revitalize a low-income area that was slated for improvement with urban renewal dollars. The city collaborated with ECONorthwest consultants and the local OSU Extension Service Small Farms Program to develop, conduct, analyze, and present the results of a survey of small and mid-sized farmers (both organic and conventional) in the Salem area to assess their interest in a potential food hub. 

The survey consisted of two sections with both multiple-choice and open-ended questions. The first section included general questions about the farming operation (location, acreage, what products they sell, when the products are available for sale, and where they currently sell their products). The second section was designed to assess the farmers' interest in a food hub in Salem, and included questions about farmers' interest in increasing local sales, whether they thought a food hub was needed in the Mid-Willamette Valley, and their top farming challenges. The second section also asked what services a food hub could provide that would benefit them, as well as whether they would be interested in participating in a food hub, where they would ideally like it to be located, and barriers they see to their participation in a food hub. Since this survey was only an initial inquiry to see whether the farmers were interested in a food hub, more specific questions like what farmers would pay for services provided by the food hub were not included.

A total of 19 small and mid-sized farmers (10.5% of the estimated total in the region) were interviewed for the survey, from September 2016 to March 2017; 18 on-site at their farms and one over the phone. While the survey was being developed, a database of small farmers in Oregon's Mid-Willamette Valley was compiled from internet searches, extension contact lists, and county tax assessor data. Survey participants were contacted from this database. As in most research that includes interviews or surveys, the data was limited to responses from farmers that chose to participate. Many of the farmers who responded to the request for an interview had been previously involved with the OSU Extension Service (participated in research, answered surveys, hosted workshops, etc.). A breakdown of what crops/products the survey participants grew or produced is shown in Table 1. 

Table 1. Number and percentage of participants that farm and sell various products 

Sales outlet On-farm Farmers' Market CSA Restaurant Grocery (retail) Institutions Wholesale Online  Other
Number of participants that sell via that outlet 7 5 7 6 4 0 8 0 2

Seven of the farmers interviewed were certified organic and the remaining 12 were not. The non-organic farmers were a mix of six conventional farms and six farms that were practicing alternative agriculture (no-spray, ecological, etc.) but were not certified organic. 

The same interviewer conducted the interviews with producers for consistency of data collection. Data were analyzed in one and two-way tables by breaking the participants into sub-groups based on farm location, years of farming experience, farmed acreage, products farmed and sold, and organic certification status.

Key Findings from the Survey

  • Three-quarters of the farmer participants had heard the term food hub before the survey. It was important to ensure that all of the survey participants had a common understanding of a food hub, as that would affect their responses.
  • Participants sold their products through a variety of outlets, ranging from farmers' markets to wholesale (Table 2).

Table 2. Sales outlets that participants use to sell their products

Service the food hub could provide Responded that it would be helpful
Community Education 84%
Value added processing  74%
Aggregation 68%
Direct Sales 68%

  • All but one of the farmers interviewed for the survey were interested in participating in a food hub in Salem, Oregon. The producer that was not interested in participating had a variety of long term wholesale buyers and was not looking to expand farm sales.
  • Community education was the most common option chosen by all participants interested in a food hub when asked what services they would like a food hub to provide (Table 3). Value-added processing, direct sales, distribution, and aggregation were of secondary interest to participants (Table 3).

Table 3. Services that farmers said would be helpful as part of a food hub, ranked from highest to lowest percentage of respondents. 

Service the food hub could provide Responded that it would be helpful
Community Education 84%
Value added processing  74%
Aggregation 68%
Direct Sales 68%
Distribution 63%
Transportation 58%
Cold Storage  58%
Marketing Support 58%
Local label 53%
GAP/food safety cert. assistance 47%
USDA meat processing facility 42%
Organic certification assistant 37%
Freezer storage  26%
Light processing 26%
Dry product handling 21%

  • All of the certified organic farmers grew mixed vegetables, which shaped many of their responses from product availability to services they want the food hub to provide. Only 58% of the non-organic farmers grew mixed vegetables.
  • All of the meat producers surveyed said processing is their primary farming challenge because of the limited number of USDA meat-processing facilities in the region that will work with small producers. All seven meat producers surveyed said a USDA meat-processing facility was their top priority for a service the food hub could provide. Two of the seven meat producers surveyed were certified organic. For their meats to be sold as organic after processing, the facility would have to be certified organic in addition to being USDA-certified.  

Farmer Concerns about a Food Hub

  • Three main concerns that emerged from the interviews with both organic and non-organic farmers about participating in the food hub were: 1) they would need to set their prices too low, 2) lack of consumer demand for their products in the geographical area around the food hub, and 3) too much competition from larger farms who would also participate in a food hub.
  • Both organic and non-organic farmers were concerned that end-consumers and/or buyers would not go to the food hub to buy their products. Considering that, they requested that the food hub provide community education about the value of buying local agricultural products.
  • The participant with one of the largest farms in the survey (100+ acres) that has robust transportation and wholesale distribution systems for their organic produce, expressed concern that the transportation limitations of smaller farmers due to fewer vehicles and employees (regardless of certification status) would limit large-volume accounts at the food hub.
  • Large-volume buyers (wholesale) commonly have an interest in purchasing goods at rates lower than direct-to-consumer prices. This decrease in profit margin would not prove sustainable or enticing for small and mid-sized farm operations, causing many of the survey participants to doubt or question the implementation of a similar business model, as reported in the ECONorthwest writeup of the survey results for the City of Salem (ECONorthwest, 2017).

Comparing Organic and Non-organic Survey Participants

It is important to compare the responses from these two groups of participants because organic and non-organic products command different prices, which we expected may affect the farmers' responses.

  • On average, the organic growers had been farming more years than the non-organic farmers surveyed.
  • A much higher percentage of organic farmers did not think a food hub was necessary in the Mid-Willamette Valley (29%) as compared to non-organic farmers (8%). Many of the organic farmers said that they would gladly participate in a food hub, but were worried that there wouldn't be enough people or companies in Salem to buy their products. A lot of the organic farmers take their products to Portland, the largest metropolitan area in the state, to sell them where the demand for organic foods is more mainstream and verified by existing organic sales in the city. Producers surveyed were concerned that it would be more difficult to sell their organic products in Salem and get the price they need for them.

Consumer Demand

  • The report presented by ECONorthwest stressed that overall, consumer energy for the local foods movement is not as strong in Salem as in other parts of the Mid-Willamette Valley (2017). This demonstrates a need for end-consumer education about buying local agricultural products, which was a point that all of the farmers mentioned and considered important.
  • Our study supported this finding, as many survey participants cited a potential lack of demand for locally produced foods by consumers as a factor that could contribute towards hesitation about building a food hub.

Conclusion

Food hubs may be useful and important resources for farmers looking for new local outlets to sell their products. This survey indicated a great interest from small and mid-sized farmers in participating in a food hub. It also collected a variety of concerns from the farmers about price point, consumer education, and competition from larger farms. As backed by other studies and farmer responses, we determined that for a food hub to be successful, farmers' interest in participating must be met by sufficient consumer demand for local agricultural products, and this may be particularly true for organic products. Establishing a food hub is a large undertaking and conducting preliminary surveys to gauge interest from both farmers and consumers is an important first step before investing in more comprehensive assessments. When farmers are considering participation in a food hub, it is important to ask many of the same questions that a survey like this would pose, such as: What services will the food hub provide? What are your price requirements to sell at a food hub? Is the food hub in a convenient location? And, do you see any potential barriers to your participation in a food hub?

Additional Resources

  • National Good Food Network Food Hub Center (The Wallace Center). Provides a variety of resources, including: webinars about existing food hubs, a link to the USDA food hub directory, a food hub consultant database, funding sources for food hubs, and research about food hubs.
  • USDA Regional Food Hub Resource Guide. Summary of what a food hub is, its impacts, economic viability, potential barriers to growth and possible solutions to those barriers. Starting on page 29, there are listings of various funding sources available to help establish a food hub.
  • USDA Agricultural Marketing Service. General information about food hubs and links to resources. The USDA AMS Food Hub Map is a visual representation of the USDA food hub directory.
  • A Food Hub Facility Design Case Study. A case study of the establishment of the Tuscarora Organic Growers food hub in Pennsylvania, focusing on the physical building of the food hub. Includes building dimensions and operational expenses.
  • Healthy Food Access Portal: Food Hubs. This webpage provides an overview of food hubs, including resources, strategies, challenges and food hub success stories from all over the U.S.

References and Citations

This is an eOrganic article and was reviewed for compliance with National Organic Program regulations by members of the eOrganic community. Always check with your organic certification agency before adopting new practices or using new materials. For more information, refer to eOrganic's articles on organic certification.

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.