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More Michigan Farms, Food Firms ‘Thinking Local’

Studies, successful pioneers confirm positive powers of homegrown products

November 20, 2008 | By Patty Cantrell
Great Lakes Bulletin News Service

  The Michigan Asparagus Advisory Board published a recipe book as part of a state campaign to expand local markets for fresh, Michigan-grown asparagus.
Part Two of a six-part series

The growing quest by consumers for tasty, healthy food produced by people they could actually go visit is opening doors for local farms and food businesses, and their communities.

But actually moving through those doors into a successful, regional food economy is quite another thing. It requires helping farms interested in “going local” start up or transition to new, sometimes drastically different business models. It requires more storage, packing, distribution and other services needed to move food around at a regional scale.

That’s what Rick Schnieders, chief executive officer of SYSCO International, is trying to figure out. The driving force, he says, is that the market is moving toward foods that provide “romance, memory, and trust” versus foods that are “fast, convenient, and cheap.”

Denis Jennisch, regional produce manager in SYSCO’s Grand Rapids office, is one who has been tasked with sourcing more products from nearby farms, which offer more “romance, memory, and trust” than anonymous, distant suppliers. He’s even received some money from headquarters to help farms find cooling and other equipment they might need to scale up for SYSCO.

“The Grand Rapids and Kansas City offices are the two regions working on it and learning from each other,” Mr. Jennisch said. “Eventually the program will go to all of SYSCO.”

Meanwhile, other distribution companies and all sizes of farms are working on their end of that new trend. As they do, they could learn well from the success of Michigan’s asparagus farmers, who recently diversified into “local fresh” markets.

Fresh Success
In 2002, Michigan’s asparagus growers, centered in west Michigan’s Oceana County, were swamped by a flood of imports from Peru that severely depressed the prices they were getting from processors. A small group of growers, acting on the fact that health-conscious consumers were eating more fresh asparagus than canned, made a determined effort to redirect their asparagus to fresh markets.

As part of that strategy, they took advantage of the Michigan Department of Agriculture’s brand-new Select Michigan marketing campaign, which helps local growers break into Michigan’s grocery markets.

Select Michigan has been huge for us,” said John Bakker, executive director of the Michigan Asparagus Advisory Board. “First, it created demand. Second, it made more folks in Michigan aware that we have an asparagus industry in this state, and about when we are harvesting so they look for it and buy it.”

It wasn’t easy. Switching from processed to fresh markets meant new plant varieties, cooling equipment, and market relationships. But in three years, the pioneering growers increased the amount of Michigan asparagus going to higher-paying, fresh produce markets from 5 percent to 25 percent. They earned 20 percent more, and the processors themselves began to pay more because they were now competing with fresh markets.

So, what if more Michigan farms diversified into fresh and local markets to satisfy new and growing appetites for healthy, tasty, trustworthy food?

Thinking Bigger
A 2006 study by the Michigan Land Use Institute and Michigan State University researchers investigated that scenario for fruits and vegetables. The study found that if Michigan farms tripled the relatively low volumes of fruits and vegetables going to higher-value fresh markets in Michigan, the state’s net farm income could increase by 14 percent, or $164 million annually. As farms spent that new income at local restaurants, stores, doctor’s offices, and the like, they would stimulate nearly 1,900 new jobs.

Similar studies, such as two by Iowa State University’s Leopld Center for Sustainable Agriculture, point to significant economic benefits that can come from more local spending on local foods. The benefits come from stopping the drain of dollars to other states and countries. They also come from the fact that dollars spent locally add up to more money over time as they circulate around a community—from a customer’s purchase to an employee’s paycheck to the grocery checkout lane.

And a recent study by Dr. Mike Hamm, director of MSU’s C.S. Mott Group for Sustainable Food Systems, estimated that if Michigan residents ate recommended levels of fruits and vegetables, and bought them from Michigan farms, the state would gain $200 million in net farm income and some 1,800 jobs as farms spent that incomei.

It all starts with investment in Michigan’s food and farm entrepreneurs, says David Armstrong, senior vice president of Greenstone Farm Credit Services, Michigan’s largest agricultural lender.

“I was probably a little skeptical a few years ago,” Mr. Armstrong said. “But now there’s very clearly demand in the marketplace by people who want locally grown food. I think it can be a rallying opportunity for entrepreneurs who want to take some business risk and come up with a plan to serve that emerging need.”

Similarly, Chris Peterson, director of MSU’s Product Center for Agriculture and Natural Resources, believes local and regional food is a valuable strategy for Michigan agriculture.

“Regional food systems have been a very important focus of the Product Center’s work for several years now,” he said. “We’re working on several projects where we’re looking at how we could make connections between local producers and local consumers of food.”

Stronger Regions, Healthier People
In addition to jobs, concerted efforts to build more regional food systems can help Michigan address two other big needs: Stronger regional economies and lower economic and social costs from dietary diseases.

Strong farms support regional economies not only with local spending, but also with local amenities like wineries, pumpkin patches, and the simple pleasures and environmental protections that come from open fields and woodlands.

For Michigan to have local food and farm amenities in the future, however, it must view the farmland around its cities and towns differently, and then invest accordingly.

Thanks to the last 50 years of industrialized agriculture, open land on the urban edge is seen not as valuable for food, clean water, and family outings but as the location of the next shopping mall or suburb—a trend confirmed by a 2002 American Farmland Trust study. Michigan ranks high in the study—ninth in the nation—for the most threatened farmland. Over the next 35 years, our metropolitan counties stand to lose the most: 25 percent of our urban-influenced land.

Yet fully 86 percent of the country’s fruit and vegetable production occurs on so-called “urban-influenced” land. Sixty-three percent of dairy, 39 percent of meat, and 35 percent of grain production happen there, too. Regional food-system building is a key step toward keeping this land on the job of nurturing our bodies, hearts, and minds.

It’s also key to addressing Michigan’s high rate of diet-related diseases, which cost jobs and lives.

A recent study comparing Michigan to other states found that diet-related health problems in the state contributed significantly to higher health insurance costs, which makes it even more difficult for Michigan to keep and attract employers.

The solution, according to much research and well-established dietary guidelines, is for everyone to eat more fruits and vegetables, particularly fresh produce. And that means business opportunity for existing and new farms, if Michigan invests in the ability of Michigan farms to meet this need.

Growing Regional Success
MSU’s Mike Hamm says the opportunity is a big one.

“To provide a healthy food supply in terms fruits and vegetables, we need a lot more farmers on the landscape,” said Mr. Hamm said. The U.S. Department of Agriculture agrees; it estimates that the country needs 13 million more acres of such production to provide enough fresh produce for Americans to eat according to dietary guidelines.

The potential to build happening, healthy local economies by keeping more of Michigan’s food dollars at home is also clear to Mr. LeVanway, the Benton Harbor Fruit Market manager.

“Here in Berrien County, we’re number one in the state for agriculture, but we spend $375 million each year for food that does not come from here,” he said. “If we spent more locally we would see an economic stimulus in our rural areas that would bring us back to the 1950s, when our communities were vibrant.”

Farms at that time sold locally and exported their excess, he said. More local money stayed in the local economy, circulating and multiplying as it moved from one person’s paycheck to another.

Oran Hesterman, chief executive officer of the Ann Arbor-based Fair Food Foundation, also argues that healthier food produced and sold locally can build more robust regions, which strengthens Michigan’s economic and social foundation.

“It’s really around creating opportunities for local ownership of sustainable food sources so that, as those entrepreneurs are successful, value that accrues to those enterprises also accrues to the community,” Mr. Hesterman said.

In short, it makes sense for Michigan to start feeding and employing its own people as part of its overall economic strategy.

Or, as Sibella Krause of Sustainable Agriculture Education in San Francisco wrote in A Call for New Ruralism: “To thrive and endure, regions and the cities within them need a vital local agricultural system that encompasses individual farms, rural communities, and stewardship of natural resources.”

That’s exactly what Lee and Laurie Arboreal (see Part One of this series) are doing for the state’s economic future. So are the 13 other beginning farmers who, like the Arboreals, participated in a small but powerful savings-match program two years ago. The community investment helped each farm entrepreneurs’ startup effort; for example, Lee says it helped him make a down payment on a new tractor.

The program, known as an Individual Development Account, was made possible by MSU’s C.S. Mott Group for Sustainable Food Systems and the local Van Buren County Extension office. Over the course of a year, IDA participants attended business classes and saved up to $1,000 each. The program provided a two-to-one match from federal and local funds.

“The $3,000 came at a key time,” Lee recalled. “I didn’t come from agriculture and have land or equipment from my parents.”

Neither did many of the other IDA-holders in his class. But they’re farming now and staying in touch with each other, often buying supplies together to get bulk discounts.

These new, local farmers are in Michigan to stay, providing food and local commerce no matter what happens to the dollar, the price of gas, or the safety of California spinach. They are contributing to a new economic future for Michigan in which its regions function, from urban core to rural edge, as key economic drivers for the state’s success in the 21st century.

In Part Three of See the Local Difference, Patty Cantrell will report on some of the things local officials and organizations are doing to build regional food systems in their areas. Patty directs the Michigan Land Use Institute’s Entrepreneurial Agriculture Program; reach her at pattyc@mlui.org.

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