Regional food hub eyes growth as it starts second year of supplying locally produced, fresh food
Jill Elmers is happy with the status of her certified organic farming operation in the Kansas River bottoms east of Lawrence.
It’s on her 7 acres and the 38 more she owns with neighbors Tom and Jenny Buller that she grows fruits and vegetables that she sells directly to customers enrolled in seasonal weekly distributions, to farmers markets and to a number of Lawrence restaurants.
She also knows there’s potential for a different approach, one that would tap into an unmet demand for fresh, locally produced foods. With that vision, Elmers is one of five founding members and is treasurer of the Fresh Farm HQ, a producer-owned cooperative that is attempting to expand opportunities for small, intensive farming operations.
The cooperative grew from two market-feasibility studies for establishing food hub cooperatives in the area, said Lawrence-Douglas County sustainability director Eileen Horn. One was commissioned in 2013 by the Douglas County Food Policy Council through a $58,250 U.S. Department of Agriculture Rural Development grant and a $10,000 matching grant from the Kansas Health Foundation to study 14 counties in northeast Kansas.
Coincidentally at that same time, the Greater Kansas City Food Policy Coalition also commissioned a food hub feasibility study of a 250-mile radius of the metropolitan area. The authors of the two studies coordinated and collaborated when possible. It ultimately was decided to merge the food hub efforts for greater efficiency and to avoid having competing cooperatives, Horn said.
The feasibility studies found that markets existed. The Douglas County study reports that by its fifth year, a food hub could attain $2.35 million in sales to the 16 counties studied. The Kansas City study found a $78 million untapped market in the larger area it reviewed.
With the studies, Douglas County Food Policy Council’s food-hub efforts ended and the founders of the food hub got busy, Horn said.
“You’re wary when you do a study that it will sit on the shelf and not go anywhere,” she said. “It’s so exciting to see what they have done with this.”
Elmers is not averse to risks. She gave up an electrical engineering consultant career to get into organic farming, but she said the numbers in the feasibility study gave Fresh Farm HQ the needed reassurances.
“We all thought there was a market here,” she said. “The process confirmed it (a food hub) could be beneficial to local food consumers and small farmers.”
Fresh Farm HQ is now in its second year, said Wayne Parks, director of operations for the cooperative. But that’s somewhat deceiving because the co-op began its first year in mid-April with the start of the outdoor planting season and was further challenged because its business plan and structure weren’t fully developed, he said.
The food hub’s membership grew from nine farms at the start of last year to 11 by season’s end, Parks said. It’s starting 2017 with 12 farms, all of which have at least one greenhouse, hoop house or tunnel for year-round production, he said.
The cooperative’s strategy is to recruit member farms and market in a 100-mile radius of the Kansas City metropolitan area, Parks said. It has a few members in Clay Center on the Kansas side and near Jefferson City and Nevada in Missouri that are outside that circle, he said. Nonetheless, the startup cooperative isn’t looking to supply its entire market area too quickly.
“We solely focus on the KC metro area,” Parks said. “Anything else is unaffordable because of transportation cost.”
That’s not to say other potential customers are ignored. Parks said the cooperative did sell to The Merc and to a number of restaurants in Lawrence. Should another high-volume opportunity develop, the cooperative would look to fill it, he said.
When first discussed, it was thought the food hub would have a central warehouse. That model was later jettisoned for one with multiple “sub-hubs,” where processed and packaged food items from the various members are collected, Parks said.
“Sub-hubs is where we aggregate the product and then transport into the city for sale,” he said. “Right now, we have two sub-hubs. We’re working on having four for this year.”
The central concept of the food hub is that farmers working collectively can produce the volume to get into markets they would be excluded from on an individual basis, Parks said. With that goal, Fresh Farm HQ looks to market in the five areas of corporations, wholesale distributors, grocery stores, restaurant chains and public and private institutions. Year-one successes in those areas included providing food for Hallmark’s Crown Room Cafeteria and produce to the distributor U.S. Foods, Parks said. Fresh Farm HQ ended 2016 with $124,000 in total income, he said.
The collective punch that opens markets also works to members’ advantage in purchasing, Parks said. The large-volume buying of food cartons was able to reduce individual members’ expenses significantly, he said.
Members also benefit from the sharing of equipment such as bean pickers or planters in the labor-intensive, hands-on business and through classes in which members share knowledge or learn from outside experts about such topics as food safety, Parks said.
The classes were a big bonus, said Elmers, who admitted she was not interested in changing her current production model to take greater advantage of the cooperative’s large markets. Her interest in the food hub is its potential to change the local food culture.
“I sell everything I grow,” she said. “I don’t need to add to supply the food hub. But I want it to be successful. I want consumers to have the opportunity to have more locally produced healthy food.
“The food hub appeals to the farmer who wants to sell by the pallet. If you want to take a couple of boxes to market, it’s not for you. Also, some producers aren’t interested in the consumer retail aspect. I enjoy that a lot.”
The food hub approach is also a good fit for producers who want to specialize in four or five things rather than a wide variety of produce, Elmers said.
In its second year, the food hub is looking to become a year-round provider, Parks said.
“We’re getting input from farmers on what they will have available starting in March,” he said. “There’s certain kinds of production we’ll have 12 months a year — spinach, leafy greens, cabbage, iceberg lettuce. We’re just now getting operational with poultry. We used 2016 to stand the business up. We’re now working on poultry and meat production in 2017.”