Regional Food Hubs are Viable Business Models Says Merrigan

USDA Identifies Infrastructure and Economic Opportunities for Regional Producers; Food Hubs Emerging as Viable Business Model Supporting Regional Food Systems Release No. 0170.11 Contact: USDA Office of Communications: (202) 720-4623 DETROIT, April 19, 2011 - Agriculture Deputy Secretary Kathleen Merrigan today released the results of a nationwide analysis of food hubs and provided highlights of how Michigan can tap into USDA's 'Know Your Farmer, Know Your Food' initiative, which promotes local and regional food systems by stimulating community economic development and facilitating efforts to expand access to affordable fresh and local food. Merrigan released the analysis at the Making Good Food Work conference and highlighted the economic opportunities of food hubs, an emerging business model that offers aggregation and distribution services for small and midsize producers across the country. “We have a historic opportunity to help win the future by laying a new foundation for economic growth, creating jobs and building and revitalizing critical infrastructure here in Michigan and in rural communities across America through supporting and establishing local and regional food systems as an economic development strategy to keep wealth in local communities,” said Merrigan. “This new data clearly demonstrates that small and midsize farmers can work with a variety of players to overcome the infrastructure challenges they face, while creating effective economic opportunities for their communities at the same time.” In partnership with the National Association of Produce Market Managers, the Wallace Center at Winrock International, and the Project for Public Spaces, the USDA’s Know Your Farmer, Know Your Food Subcommittee on Food Hubs has identified over 100 operational food hubs in the country and has conducted in depth analysis of over 70 operational food hubs. Preliminary survey results of this research indicate:

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•Over 100 food hubs are in operation around the country, with large clusters of food hubs in the Midwest and Northeast.
•Average food hub sales are nearly $1 million annually.
•On average, each food hub creates 13 jobs.
• The median number of small and midsize suppliers served by an individual food hub is 40.
• Almost all food hubs offer fresh produce and the majority offer dairy and protein products as well.
•Nearly 40 percent of food hubs surveyed were started by entrepreneurial producers, nonprofits, volunteer organizations, producer groups, or other organizations looking to build a strong distribution and aggregation infrastructure for small and midsize producers.
•Over 40 percent of existing food hubs are specifically working in “food deserts” to increase access to fresh, healthful and local products in communities underserved by full-service food retail outlets.

This latest research on food hubs was released at Making Good Food Work, a conference in Detroit, Mich., sponsored by the CS Mott Group for Sustainable Food Systems at Michigan State University, University of Wisconsin Extension, the Wallace Center at Winrock International, Detroit’s Eastern Market, the Food Systems Economic Partnership and the Detroit Food Policy Council. Additional support was provided by USDA’s Agricultural Marketing Service and the National Institute of Food and Agriculture. The meeting focused on developing effective distribution and aggregation strategies for regional food systems.

USDA’s ‘Know Your Farmer, Know Your Food’ initiative emphasizes the need for a fundamental and critical reconnection between producers and consumers. The effort builds on the 2008 Farm Bill, which provides for increases and flexibility for USDA programs in an effort to revitalize rural economies by supporting local and regional food systems. ‘Know Your Farmer, Know Your Food’ is helping to break down barriers that keep local food systems from thriving, create new opportunities for farmers, ranchers, consumers and rural communities, and expand access to healthy food throughout the country. USDA expects consumer demand for locally grown food in the U.S. to rise from an estimated $4 billion in 2002 to as much as $7 billion by 2012.

One example of how farmers can get involved is to participate in local farm to school programs that enable schools to feature healthy, locally-sourced products in their cafeterias. USDA sent teams out to various school districts working on farm to school and the information gathered during these site visits is being used to develop and/or reissue appropriate resource materials, guidance, and technical assistance for both schools and farmers. Some of the programs visited also incorporate nutrition-based studies, as well as food-learning opportunities such as farm visits, gardening, cooking, and composting activities.

More information about USDA’s work on food hubs can be found at https://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5090409.

The ‘Know Your Farmer, Know Your Food’ website, at www.usda.gov/knowyourfarmer, features social media tools to help focus the public conversation about farming and food, while engaging American agriculture and linking producers to customers.

USDA is an equal opportunity provider, employer and lender. To file a complaint of discrimination, write: USDA, Director, Office of Civil Rights, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (800) 795-3272 (voice), or (202) 720-6382 (TDD).