We invite all who are interested in food and farm issues to join the Missouri Valley Sustainable Farm Partnership.
Raised Free’s immediate objective is to convince qualified investors to back farmer-owned food brands for high-end grocery and food service outlets in near-by in Missouri Valley cities. However, a wide range of talents and disciplines beyond marketing and finance are essential in sustainable food systems.
Technology and Farmland Succession
“Restorative” farming methods and technology along with legal service in farmland succession are among these key disciplines. Therefore, we invite the private sector, non-profit and public research and extension groups to join the proposed regional partnership.
The balance of this page returns to our focus on marketing and finance and suggests services that might be available through the partnership.
Raised Free Strategy
As suggested above, our strategy for steady and sufficient farm profits uses local and regional resources to build cost-efficient farmer-owned food brands for local and regional retail markets. With enough reliable income, young farmers and ranchers can once again buy and hold land for future generations of sustainable producers in their home communities. The prevailing business model is not cost-efficient.
Many believe that the “conventional” farming model requires ever-larger farms with continual investments in new equipment and other non-local inputs, including credit and risk capital. There is little doubt that this combination has produced very low unit costs for all types of farm commodities, while at the same time draining away rural populations, decreasing real average incomes and causing environmental harm.
The economic losses associated with farming in rural communities have at least been matched in big Midwestern cities as the meat packing industry moved west and south toward low cost land and water. To make matters worse, middle and upper income residents in the Omaha and Kansas City areas spent a combined 290 million dollars in 2016 on organic foods and products (Organic Trade Association, USDA and Census data). In almost every case, these foods come from outside of Missouri Valley trade areas.
There are four key reasons for this economic dysfunction. First, from long experience in organic agriculture, I know that young sustainable farmers cannot afford to rent land at rates that will cover the taxes while maintaining pastures, water systems, terraces, fences and buildings.
Second, although sales through farmers markets, community supported agriculture projects (CSA’s), food hubs and restaurants have increased in recent years, these direct sales methods do not produce the free cash required to scale up local food systems for retail grocery customers. As discussed below, sustainable farmers need food industry support to reach large numbers retail consumers.
Third, both Omaha and Kansas City lack affordable processing for specialty meat, grain and fresh produce. Meat and poultry processing are particularly important because these products have the potential to support large and efficient pasture-based food systems that require far less grain and eliminate the need for large-scale confinement feeding.
Fourth and most important, the Missouri Valley lacks an effective financial infrastructure for sustainable agriculture. Without adequate investments, the vast majority of organic, pasture-based and Biodynamic start-ups will fail, and in all likelihood, their land will return to conventional methods.
Economies-of-Scale = Farmland Succession
The proposed Partnership can help experienced sustainable farmers, ranchers and conventional owner-operators build toward local and regional retail markets. The idea is to expand the existing “commodity only” business model to include production and processing of branded organic meat and poultry for local and regional retail outlets. These products can be competitive in the Missouri Valley with non-local brands in urban grocery and food service outlets. This strategy starts with the recognition that the “conventional” farming model is changing. Farmers are adopting more environmentally friendly methods, including no-till planting, cover crops, integrated pest management and filter strips.
Further and often overlooked by sustainable producers is the fact that many conventional producers and their food chain partners have direct experience with branded retail products like milk, fresh produce, meats and poultry. Sustainable producers should take note of the existing retail supply chains and look for shared opportunities in retail marketing.
And while conventional producers adopt more sustainable farming practices, many USDA-certified organic producers are moving toward the conventional business model (while continuing to avoid farm chemicals). This group is investing in land and new technology to produce low cost organic commodities as well as value-added products for high-end retail markets. However, these investments are centered on the East and West Coasts and near big cities like Chicago and Denver. Missouri Valley cities need functioning investment programs focused on farmland succession and economies-of-scale in sustainable food production and processing.
Wall Street Is Not Helping
The vast majority of middle and upper income urban residents in the Missouri Valley place all of their savings and retirement funds with Wall Street firms – without considering local investment opportunities. They (we) can’t be blamed because professionally managed investment programs for sustainable agriculture are not available in the Missouri Valley. This financial outsourcing drains away essential resources from low-income rural and urban communities that need healthy food and decent jobs.
Local investment professionals and lenders need help to understand the potential of large and local sustainable food systems. There is no doubt that Wall Street can play an important role in sustainable agriculture, and at the same time, create new business opportunities in local fund management.
In fact, some urban investors are beginning to take notice and work directly with Missouri Valley farmers and ranchers. For example, farms and supply chains associated with Baumans Cedar Valley Farms and Central Grazing Company have expanded with the help of the national Slow Money organization and a local volunteer group from Lawrence, KS. Omaha, Nebraska investors are also working with local growers and food businesses. On a related front, the Metro Omaha Food Policy Council was organized to educate consumers on public and private policies that build strong local food economies.
Potential Partnership Services
We invite food chain members, from farmers to retailers, to support projects and programs that build local and regional markets for Missouri Valley organic meat and poultry. This section outlines our thoughts on potential support services for retail-oriented farmers, ranchers and food processors. A well organized regional partnership could:
• Assist with “farm to fork” business plans
• Provide market information for all supply chain members
• Evaluate marketing strategies and campaigns for their impacts on ROI
• Build working relationships with local and regional food system members
• Develop standard succession plans for farmland and key food chain businesses
Investment Workshops and Showcases
The partnership could sponsor a series of local “business planning workshops” modeled loosely on Slow Money’s work in Kansas and Nebraska. Three to four workshops could be held in locations with potential investor interest. The public, along with selected investors and lenders would hear sustainable farmers and other food entrepreneurs present summary business plans. These brief conceptual plans would demonstrate in broad terms how the proposed enterprise would make money in local and regional sustainable agriculture.
After each planning presentation, the audience would have an opportunity to ask questions and meet the presenters. There will be no voting.
Partnership members could also volunteer to help presenters refine their conceptual plans in preparation for a final capstone or “showcase” meeting to be held in each location. Together, the planning and showcase meetings would provide a “match making” process designed to connect investors with local food entrepreneurs.
Please contact me for more information.