Q&A: Discussing Local Farming Initiatives with Agricultural Economics Professor Tim Woods
In this edition of our Q&A series, we talk to Dr. Tim Woods about the effect of local agriculture programs on both consumer spending habits and financial literacy within the small business community. Dr. Woods is a professor in the University of Kentucky’s Agricultural Extension program and the Principle Investigator for the school’s MarketReady Training initiative.
Local is just so hot right now.
With apologies to Ben Stiller and Zoolander, it’s true – at least as far as the restaurant industry is concerned. The National Restaurant Association recently released its annual list of the top 20 trends for the new year, as voted on by chefs around the country, and guess what topped the list?
Locally sourced meats and seafood took the top spot, followed by locally grown produce. Considering that both beat out the likes of healthy kids’ meals and environmental sustainability, it’s clear just how locally-focused the culinary world will be in 2013. This shouldn’t be too big of a surprise, though. The number of farmers markets in the United States grew by more than 348% from 1994 to 2012, according to the United States Department of Agriculture, and the most recent Census data shows that crop and livestock production alone added $450.2 billion in value to the economy in 2009.
Shows such as Top Chef and supermarket chains like Trader Joe’s and Whole Foods have also made it chic to buy local and organic, and many of the country’s land-grant institutions have also been working behind the scenes to help local farmers assimilate into the modern, large-scale economy.
The University of Kentucky’s MarketReady Training initiative, run through the school’s extension program, is one such example. Working in concert with Kentucky's Departments of Agriculture and Public Health, this program instructs the state’s farming community on a variety of different small business-oriented topics – including distribution, marketing, promotion, brand development, accounting, business communication, and food safety – and helps foster important connections with local restaurants.
Why is this important?
Well, the MarketReady program not only provides a service that’s clearly in high demand right now, but it’s also helping to boost both sides of the economy – pushing suppliers into a broader market and providing unique goods to a greater number of consumers. Plus, it’s just the kind of continuing education program that politicians have been touting in recent years as a way to give people a viable entree into the labor market.
Since we’re all about promoting financial literacy and a healthy economy here at WalletHub, we thought we’d go inside the UK MarketReady Training program with one of its driving forces – Dr. Tim Woods. Here’s what he had to say:
WalletHub (CH): How did your MarketReady Training initiative develop?
Woods: "What we’ve seen here, particularly over the last five to seven years is just a huge crescendo, if you will, in terms of interest in this ‘local-foods-to-local-markets’ phenomenon. As a result of that, we’ve tried to step up and fill that gap there where there’s been a need for a lot of training for producers in terms of preparation for selling into the market [as well as] commercial requirements to selling into markets beyond the farmer’s market. For example, the MarketReady Training program that we’ve developed here recently is really geared to try to help equip producers to sell to restaurants, to grocers, to wholesalers, [and to] farm-to-school type programs. Those kinds of market channels have much higher expectations in terms of the commercial readiness of the producer-suppliers. Many of our producers, particularly with produce, that have been used to selling at a farmer’s market-type venue have had to really ramp up a lot with their professional business presentation on things like insurance and packaging and quality assurance measures that these other retail markets are looking for. [There is] tons and tons of opportunity in terms of a demand for local foods, but the challenge is just getting our producers up to speed to be able to bring the quality, consistency, and volume of product that these buyers are looking for."
CH: What does the program entail and are there similar initiatives elsewhere in the United States?
Woods: “In this MarketReady Training program, we basically do the dog and pony show across the state. We’ve had over 400 producers that have gone through our MarketReady Training program here in Kentucky. This specific MarketReady Training program is actually being delivered in 10 other states besides Kentucky right now. It’s just become a really practical vehicle, a platform to talk about the best practices in terms of commercial sale for local foods that these buyers are looking for, and also, state-by-state, to bring in the local resources – Department of Agriculture programs [and], on the food safety side, the Department of Public Health programs – that producers can take advantage of and integrate into their operations.”
CH: What are the farmers you work with typically most and least proficient in when it comes to personal finance and running a small business?
Woods: “Most of the folks I’m working with are pretty good on the farm-level production side of things, and I think they’re much better at the food-safety, quality-assurance side of things than some of the buyers are aware of. I think a big part of that is just helping to put in place assurances to these buyers – whether it’s using third-party audits or auditing other kinds of quality-certification programs – that give buyers assurances that they’re going to have consistent, high-quality products and that producers are doing due diligence to provide safe products. … A lot of them have really innovative products. We deal with folks that are selling value-added products too, like the cheeses and other dairy products, salsas, and jams, and things like this on a very small scale. They do a good job with the small batch – you could call it artisan – type products, but to move from that level to a commercial scale – instead of selling a few cases at a time, you need to ramp up to be able to sell 100 cases at a time – that’s a big step for a lot of our small-scale folks. Distribution becomes a challenge for a lot of them, commercial packaging becomes a big challenge, so we try to connect people that are going through our training program to local resources that may be able to help folks do a better job with that.”
CH: Do you have a sense of the program’s economic impact?
Woods: “It hasn’t been running long enough for me to quite be able to put a dollar value to it just yet. But, just to give you an idea, we do a 6-month follow-up for folks that have gone through the training and just something like the fact that the average person that’s gone through this training program, in that six months since they’ve been through the program, have engaged 11 new buyers is one piece of data, for example, that jumps out at me that encourages me that it’s equipping and giving our producers more confidence to go and talk to buyers. In this MarketReady Training, we try to give the producers a best-practices checklist where they go through, almost doing a self-audit, on 'how am I doing with packaging, what are these folks expecting with respect to business-to-business communications, invoicing, quality assurance, insurance, etc.' So, by the time producers have that stuff worked out either through the training program or just post the training program, they’re really in a much, much better position to approach these buyers and say, ‘here’s how I’ve worked out my operation to be able to be a better commercial supplier,’ even in a ‘local products to local markets’ type venue.”
CH: How do restaurants and consumers benefit?
Woods: From the buyer’s point of view, there are several reasons why they like to reach back to these local producers. I think especially for the independent restaurants that aren’t part of a big chain, being able to merchandise or promote their relationship with these local producers on their menu, in their restaurant really gives them a really important point of differentiation. … In addition to that, there is an opportunity for some kinds of products – fresh produce in particular - where chefs can get a better quality, fresher product that could have been picked just that morning. And so they could be hours away from the farm instead of days away from the farm. In many cases, the more progressive restaurants that do a really good job with local producers have such a strong relationship with those producers that they’re able to be in conversation over the long term in terms of, 'grow this for me, grow that for me,' – an almost dedicated, informal strategic alliance, if you will, between the restaurant and the local producer.”
CH: Besides MarketReady, what other initiatives does the Agricultural Extension program have its hands in?
Woods: “We do a lot of local food consumer survey work, and actually I’ve got so much going on there I can’t hardly get the material out fast enough in terms of the surveys that we’ve worked on. We just finished a monumental farm-market patron survey that covered eight states with over 3,4000 farm market visitor responses there, particularly focused on farm market sampling and the importance of sampling to these folks that were visitors there and trying to use that as a resource to develop a best-practices guide. … We have a lot of information on what consumers are looking for in some of these local markets and trying to integrate all of that kind of stuff into our information on the business design with some of these different local foods ideas.”
CH: Are students involved these programs?
Woods: “We use students in some of our consumer survey research – at farmer’s markets where we’re doing consumer-intercept surveys. … We do have a really neat program here in our Sustainable Agriculture program, where the students actually run a student owned and operated CSA – Community Supported Agriculture program.”
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