Study: Food Hub a Viable Option for Small Growers

2/16/2013 7:00 AM
By Paul Post New York Correspondent

SARATOGA SPRINGS, N.Y. — Opportunities exist for a Hudson Valley food hub that would link small- to mid-size farms with large buyers, which they need for financial viability.

Farmland preservation would be a major side benefit, because such farms comprise about half the Hudson Valley’s agriculture properties.

These are among the key findings in a report due out next month for the Local Economies Project of the New York City-based New World Foundation, which makes grants available to foster economic growth in local communities.

“New York is the biggest food market in the country,” said Sarah Brannen, of Poughkeepsie-based Upstream Advisors, the study’s author. “Plus, you have the surrounding densely-populated Northeast region.”

The Local Economies Project funded her firm’s study with a $191,400 grant early last year. Brannen presented her findings at the Feb. 10-12 Northeast Sustainable Agriculture Working Group conference in Saratoga Springs, N.Y. More than 400 people from 12 states were on hand, including academics, growers, researchers and policy makers.

Previously, she was senior policy analyst to the New York City Council, where she advised the speaker on economic development and food policy issues. While there, she researched, designed and launched the FoodWorks initiative to improve economic, health and environmental outcomes in the New York food system. As a result, the city passed legislation to encourage more procurement of regional food, local food processing, improved food distribution and urban agriculture.

Brannen said 12 percent of the nation’s farms account for 84 percent of agricultural output, and 99 percent of the food consumed goes through wholesale channels. Quite often, it’s difficult if not impossible for small farms to link with large buyers. A hub provides a venue where numerous growers can bring their goods to meet a large buyer’s demands.

“We need farms to aggregate to be part of the supply chain,” Brannen said. “The focus should be on distribution and marketing.”

When preparing her study, she didn’t start with the premise that a food hub is needed. Instead, she evaluated the financial success and best practices at existing food hubs, along with market demands in the Hudson Valley, before drawing conclusions.

In Kingston, a hub-type venture called Hudson Valley Harvest is located in a former IBM plant. The business was begun by New Paltz farmer Paul Alward and has a network of local farms that provide fresh produce and meats, which are flash-frozen and sold to New York City and Hudson Valley restaurants.

In Poughkeepsie, a not-for-profit dairy cooperative called Hudson Valley Fresh is providing a market for the region’s dairy farms. The firm’s website says it is “dedicated to preserving the agricultural heritage of the Hudson River Valley and promoting it as one of the premier food regions of the United States.”

Future projects envisioned by the study will seek to strengthen the regional food system and increase market opportunities for Hudson Valley farmers and food products. Brannen said food is a $30 billion industry in New York City and the Hudson Valley, but that less than 2 percent of it is locally-sourced.

“There’s room for growth,” she said.

During her study, Brannen analyzed a variety of existing food hubs, including a firm called Regional Access, which has a 25,000-square-foot warehouse in Trumansburg, near Ithaca. It has $6 million worth of annual sales and deals with 100 farms and 65 specialty processors.

“Food hubs continue to struggle to achieve financial viability,” Brannen said. “It’s great to have a passion for this. But that’s not enough. You need industry knowledge because it’s a very thin margin industry.”

Processing infrastructure is also needed for meat and poultry, grains, specialty dairy products and fresh-cut produce.

“We think there’s unmet demand in those areas,” Brannen said. “We need to work with existing infrastructure to build something new.”

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