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Report: Farming a N.W. Michigan Heavyweight

New policies, investments, and marketing could make it a champ

March 12, 2009 | By Patty Cantrell
Great Lakes Bulletin News Service

  A new report from the Michigan Land Use Institute says that northern Michigan’s farm economy, while large, could become much more prosperous.
TRAVERSE CITY—Farms in northwest Lower Michigan have substantial opportunities to boost their profits by tapping into new, better-paying local and regional markets for their fresh fruits and vegetables, according to Northwest Michigan’s Farm Factor,a new report on the region’s food and agriculture sector.

The report, commissioned by the Michigan Land Use Institute, found, for example, that only three out of every 100 apples grown in this part of the state go directly to local consumers. Increasing such direct sales, as well as wholesaling other locally grown fresh produce, could generate as much as $11.6 million in new annual revenue for area agriculture, a mainstay of the region’s economy.

In fact, the new report finds that local agriculture’s nearly $98 million in annual sales and estimated total annual economic impact of nearly $140 million is four times more powerful as a local economic driver than agriculture is in other parts of Michigan.

“This report shows how important agriculture is to northwest Michigan’s economy now and into the future,” said Jim Bardenhagen, Leelanau County farmer and advisor to the research effort.

As a regional farm business counselor with Michigan State University, Mr. Bardenhagen is very familiar with the opportunities and challenges farms throughout this part of the state face. He noted that consumers now demand more fresh and local produce, and that fuel prices and climate changes such as the worsening drought in California are increasing Midwest farmers’ competitiveness in regional food markets.

“We’ve been limited in fresh markets for a long time,” he said. “But that’s changing, and that means new economic opportunity for our rural towns, our region.”

Mr. Bardenhagen is one of many individuals and organizations now uniting their efforts to make sure agriculture grows as a force for economic strength, environmental integrity, and public health in the region.

A number of them attended a recent summit in Traverse City aimed at expanding the region’s budding local-food economy. Organized by 15 local civic, business, governmental, and educational groups, the summit hosted representatives from different parts of northwest Michigan’s food and farm system. They spent a full day developing strategies for achieving the kind of food and farm future both local-food proponents and local residents participating in the six-county Grand Vision transportation and development planning process say they want for their community.

Bob Russell of the Neahtawanta Center, a local, non-profit research and educational organization that focuses on sustainability issues, said that the new report served as a springboard for the daylong set of presentations and discussions.

“If you want to realize the vision, you have to have some measurement along the way,” Mr. Russell said about plans made at the Farm Route to Prosperity summit to track progress on building a local food economy.

Mr. Russell and this reporter appear on a video blog about the summit, which is now available online.

How Big Is Local Ag?
In addition to putting dollar amounts to some specific opportunities in fresh produce markets, Northwest Michigan’s Farm Factor provides valuable baseline data for anyone interested in understanding and supporting the local agricultural economy.

It shows, for example, that farming, while not the largest source of sales and jobs in the region, is a sizable part of its economic life. Sales of farm products are equal to half of all retail sales in the region and one-third of all manufacturing sales. Those farm sales support more than 2,000 farm owner/operators with a total net income of $6.6 million and more than 3,000 workers with a total payroll of $12.8 million.

Those numbers, the report points out, do not include the powerful part local agriculture plays in the region’s largest industry, tourism. Studies show that viewing and visiting farms, farm stands, and wineries is a favorite activity for many of the 1.4 million people who visit the area each year.

Cherries and More
The report confirms that northwest Lower Michigan is among the Midwest’s major fruit producers, and that cherries top the list of fruits and vegetables the region produces. The report points out that, while the region produces more cherries than local people eat, there are opportunities both in the immediate region and around the state and the Midwest for cherries and many other fresh products that either are our could be grown here.

The study adds that those products have at least two natural advantages over their distant competitors: They are much fresher and better tasting when they arrive at the store, and the transportation costs for getting them there are significantly lower.

To help quantify such opportunities, Northwest Michigan’s Farm Factor compares the amounts of different fruits and vegetables the region produces with the amount regional residents consume. In most cases, local farms that could supply much more produce to local residents do not do so, leaving that market to distant growers and national and international distributors.

Specifically, the study identifies local and regional markets for fresh blueberries, apricots, table grapes, and pears that go virtually untouched by local agriculture, even though those fruits can grow relatively well here. In other cases, such as cucumbers and tomatoes, farms sell mostly to canneries and other processors and leave fresh markets, which pay higher wholesale prices, to those faraway suppliers.

And in some cases, such as strawberries and apples, there are many, largely untapped opportunities to sell direct to nearby restaurants, stores, schools, and other local buyers.

With its baseline data and market projections, Northwest Michigan’s Farm Factor provides a basis for local farmers, government leaders, and others to explore agriculture’s current and future role in the region’s economy.

The report is posted at http://www.mlui.org/ and can be accessed by looking for it under “Special Reports.”

Patty Cantrell founded the Michigan Land Use Institute’s Entrepreneurial Agriculture Project and directs its food and farm programs. Reach her at pattyc@mlui.org.

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