North Dakota farmers seek creation of food hub

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Farm Forum

BISMARCK, N.D. (AP) – A group of North Dakota farmers want to take their business from the farmers market to hospitals, schools and grocery stores.

“Local food is ready to take the next step in North Dakota,” said Annie Carlson of Morning Joy Farm in Mercer.

Carlson is one of about 10 family farmers along the Highway 83 corridor participating in the formation of a growers cooperative aiming to start a farmer-owned food hub in the state. She is hoping, by working together, smaller farmers will be able to market a steady supply of produce on a larger scale, the Bismarck Tribune reported (http://bit.ly/1lhNcTq ).

“I’m just one of many,” Carlson said. “I think there is a pool of talent waiting to be released.”

Common Enterprises Development Corp. and Foundation for Agricultural and Rural Resources Management and Sustainability began work in January studying the sustainability of a food hub. Now CEDC is coordinating organization efforts to create the hub.

“The end result is an actual organization,” said Tyler Demars of CEDC. “We can do this feasibility study, but if there’s no one to take and run with it, it just sits there.”

CEDC will develop a business plan for the farmers involved to help them scale up their businesses.

The group received a $60,000 U.S. Department of Agriculture Rural Development grant to conduct the necessary research to establish the hub.

Carlson said the only option community farmers have now is direct marketing, either through Community Supported Agriculture or a farmers market.

Carlson said some producers have managed to tap into restaurants or grocery stores. A local farmer provides the basil used by Fireflour Pizza in Antler for example.

Carlson herself has been asked to provide pork shoulders to an area restaurant. She’s held back because the business only wants shoulders. She can’t raise enough pigs and she doesn’t have an outlet to sell the rest of the meat.

To break into a market like the Bismarck Public School District, Carlson said it would take farmers producing enough food for 8,000 meals per day. Purchasers also don’t want to have to deal with multiple farmers. They want to be able to buy what they need from one entity.

“We have to work together to make this work,” she said.

Pooling resources would give farmers the selling power they need. Carlson said it also would give them buying power.

“The idea here is rather than continuing to talk about same critical challenges, let’s get together a co-op that can solve them,” Demars said.

For small fruit production, like strawberries, a farmer needs a transplanter. If they choose to plant three acres of carrots to meet demand, they would need a carrot lifter to gather them all. Carlson said the cooperative could purchase these things and multiple members could use it while splitting the cost.

Demars, also is involved with the formation of the Bisman Community Food Cooperative. He said a community-owned retail grocery outlet is not dependent on local growers for stocking the shelves but members do want a strong local presence also in the store. He said, if it’s formed, the growers cooperative could begin marketing to the food co-op and get accustomed to selling food wholesale rather than retail.

Demars said the cooperative model will allow those farmers who want to scale up production and rely on farming as their sole source of income to increase production without losing the profit margin of selling wholesale rather than retail.

Membership would require equity investment. Farmers would sell to the cooperative, which would process and sell the produce. The profit margin would then go back to the farmer based on how much they sold. The margin would be higher because expenses would be shared rather than fronted by one person.

Demars said the first step is to incorporate the group. CEDC’s feasibility study for FARRMS will be complete by the end of the year. On the growers cooperative initiative, CEDC has already started surveying potential customers to determine demand and will finish by the end of the month. A survey of producers will take place next. Cooperative member meetings will start this fall.

“It’s ambitious so we have a big challenge in front of us,” Demars said.

Developing the business plan and starting the cooperative will take two to three years.

“This is really just a very first step in process,” he said.

From the member survey, CEDC will be able to determine what is being grown and what producers would be willing to grow. The survey of potential customers determines what products there is demand for and how it would need to be processed.

“If there’s not a market for a product, it’s not going to be successful,” Demars said.

For example, would a school prefer carrots sliced in coins or in sticks? What produce would need to be dried or frozen?

“There’s just a lot of unknowns,” Carlson said.