The wholesale link to a sustainable food-distribution market has always been the trickiest piece in the puzzle of commercial agriculture. It’s the piece that adds cost to the product – the “middle man” in conventional, corporate-controlled consumer models.
Wholesale markets can increase the amount of purchases, but in agriculture and ranching, the profitability of perishable goods is completely dependent on timely harvest, packaging and delivery. The costly infrastructure that supports any food-distribution system is proportionately more expensive for the small-scale, individual farmer growing food for localized specialty markets like farm-to- table cuisine.
Ironically, regional farmers have no affordable distribution model to work with, yet they are the closest source to the highest-quality local food and sustainable agricultural practices today.
The Southwest Farm Fresh Cooperative, a group of 20 local farmers in Southwest Colorado, is working to re-connect consumers to the food resources in their own back yard as local food-distribution systems did in the past, before consolidated food production and supermarket consumerism contributed to their disappearance.
“The network supporting our local food system did exist in this rural community a long time ago, but it has gone by the wayside,” said Kim Lindgren, president of the year-old cooperative. “Essentially, what we are resurrecting is the local infrastructure that worked for the local farmer and the customers at a local food store. Both were squashed by the consolidation market.”
Lindgren, owner of Red Canyon Farms in McElmo Canyon west of Cortez, is one of the founding members of the cooperative, which organized in March 2014. She estimates it will take five years to rebuild what has been lost. “Today, it costs a ton of money to rebuild and implement that distribution link to the markets, but that is our goal.”
A cooperative plan
A year ago, Mancos resident Ole Bye presented the farmers with the co-op idea after he tried on his own to create an independent distribution business. His business, Local Food Logic, had a delivery truck and a coterie of budding wholesale contacts. What was needed to make it work for the farmers, the distributor and the wholesale clientele was a cooperative organizational structure.
Bye presented the farmers with a for-profit model that provided refrigerated storage and pick-up equipment at points of harvest to enable farmers to connect their locally sourced produce to the wholesale markets.
“He urged the growing community to establish a board of directors and incorporate,” explained Lindgren. “His concept was something we could support and he had the experience. We did all the incorporating structural work, and then Livewell Montezuma, [a Colorado project that invests communities in healthy living] had funds to put toward the co-op on the ground level, so we organized around the map he created that showed how this could work.
“It’s something to say that all the farmers are willing to work together, a very professional approach.” The delivery distances to high-end wholesale restaurant clients in Telluride, Durango and Cortez create a need for reliable equipment that can transport the produce from the farms. Fresh produce must reach the client before its quality deteriorates.
It was a natural fit for the farmers, Bye and the clientele to come together and form their business based on a plan created around the challenges facing farmers located mostly in Montezuma County. Bye said the approach to their venture is based on conservative, considered steps. Because this is a for-profit venture, the grants available to them are very slim.
But last year the co-op applied for an award from the USDA Local Food Promotion Program, which was open to for-profit businesses. The award provided $70,000 to be used for a mobile office trailer, a walk-in cooler and three refrigerated cargo trailers.
This equipment is the basis of the distribution infrastructure. Individual farmers are rarely able to afford such expensive equipment, but collectively the co-op can pool efforts to break down the barriers created by economics, time and distance. It becomes feasible for local farmers to fill the orders they receive because the perishable produce can be transported in the refrigerated cargo trailers and delivered to clients within a workable time frame.
No rural models
Many distribution models have worked in urban areas, but none of them fit a rural region such as ours, Lindgren explained. “We may be developing the first. It’s really something to say that all the farmers in the food co-op are willing to work together, a very professional approach.”
Bye described the far-ranging network of farms to food markets as “very challenging. The point is, we are owned by the member farmers who each have a little equity in the business and it’s our mission to support the viability of the member farms. We are one year old and have identified it’s the high-end market that will support our products and the co-op.”
Although the group is not qualified for not-for-profit grants, many not-for-profits seeking the benefits of nutritious locally sourced food can apply for grants that will fund their association as a client of the co-op, as did Livewell Montezuma last year.
Kitchens in schools and hospitals, Farm to Table, Head Start programs, and senior centers are gradually signing on as co-op customers.
“We had a terrific first year – a 47 percent increase in sales over projected gross revenues,” Lindgren said.
That may be due, in part, to the demand for fresh local meats and produce growing out of the high-end gourmet restaurants in resorts such as Telluride.
“The restaurants in Cortez are a good example,” she explained. “They have all really done a great job supporting us in this, as well as the awesome customers in Durango and Telluride, all of them part of the 25 or more wholesale accounts we now have, and we are expecting more this season.”
The Wiley Carrot, a five-year-old farm in Mancos, is owned by farmer Kellie Pettyjohn, a member of the co-op. She’s enthusiastic about school involvement in the wholesale end of the co-op business, especially the Montezuma School to Farm project that wrote the co-op into one of their grants last year. “It’s a great example of collaboration. We are excited about the orders coming from the growing number of school cafeteria directors in Mancos, Ignacio, Bayfield, Cortez and Durango. It’s a bid process. We must be competitive yet the process is working. “
Her farm does not grow as many carrots As the name implies. “I was growing a lot more carrots when I named my farm. Today I only grow about 500 pounds per year. I’ve replaced them with micro-green produce. I just liked the name ‘The Wiley Carrot,’ the energy in it, but I am really focused on the micro- green market now.
“I have two acres in production and four high tunnel houses. The microgreens are grown in the hoop houses where they are protected.”
Pettyjohn said the conversion to the co-op made sense to her because she couldn’t get to the wholesale markets on her own.
Today her micro-green crop is thriving because she has the resources of the co-op to help her get the greens to her gourmet-restaurant clientele in Telluride.
During high season at The Wiley Carrot, she estimates she produces about 200 pounds of micro-greens per week. “The volume in the wholesale market is very important to me. I’d like to sell more in the direct-sales market, at the farmers market, for instance, but the micro-greens are a little more difficult, because I have to educate people about them, how to cook with them, why they are nutritious.”
The working crew she brings in to help her harvest is mostly women. They harvest, clean and package the produce. Some of them have returned every year, she said, and many of them do piece work at a couple of other farms in Mancos.
Teamwork ripples through the culture.
“The younger farmer group is like a ‘crew of growers,’ all of us willing to work together,” Pettyjohn said. “They come to the community here with very different backgrounds, few of them with prior experience in farming or ag education.”
Pettyjohn has degrees in anthropology and journalism as well as a graduate degree in geography. “Obviously, I hoped to travel the world and write about my experiences, but I came here for one season of farming, like many of us did, and stayed. It’s a choice we are making.”
Direct sales to consumers is a market the co-op farms hope to develop, but costs are high and profits are risky. Lindgren describes the desire everyone has to open “a luscious storefront where the customer could just walk in and pick up what they want at any time, and there are a lot of people in Montezuma County. Everyone that eats food should be able to buy it from us that way. Maybe we’ll get there, but first we need to develop a direct-sales model that is manageable and profitable and the infrastructure to support it.”
Another grant awarded to the group this year earmarked $10,000 to a direct sales pilot program specifically funding a part-time marketing/coordinating position and the development of an on-line ordering procedure.
According to Lindgren, the co-op has to begin direct sales in the greatest concentration of people, “because we’re for-profit,” she said. “In this case, Durango will be our first because it has the densest population and may be the easiest to develop as a model.”
Bye said if the program works in Durango, “we’ll bring the model west to Montezuma County.”
“People are excited about the consumer’s ability to order on-line and the opportunity it will bring for small farms in our region. In our process you’ll be able to see what’s available and what you want.
“To complete the links in distribution we need a go-to pick-up place and that location, that system, has to work for the co-op as well.”