As part of our shared work on farm to institution in Minnesota and the Upper Midwest, the Institute for Agriculture and Trade Policy (IATP), the Sustainable Farming Association (SFA) and Renewing the Countryside (RTC) conducted an online survey of Minnesota growers interested in farm to institution markets in fall 2014. The goal of the survey was to determine the resources Minnesota growers—specifically specialty crop growers—need to engage with institutional markets in a consistent and economically viable manner.
Background and Motivation
Farm to institution practices—particularly farm to school —are well established in Minnesota, with the 2012 Farm to School Census demonstrating that 72 percent (1,351 schools) of the state’s K-12 schools engaging in farm to school practices (with eight percent potential growth) and directing over $12 million of their food purchasing dollars toward local purchases. Of these local purchases, a clear majority were specialty crops: vegetables (88 percent) and fruits (87 percent).1 Survey research on farm to institution market potential (e.g., K-12 schools and health care facilities) in northwest and central/northeast Minnesota conservatively estimate a 20 percent market capture of $480,000 and $590,000 for each region (respectively) on an annual basis for local producers. While ground beef constitutes 50 percent of this figure due to its relatively high cost per pound and high demand with institutions, specialty crops (i.e. vegetables and fruits) constitute the majority of the remainder.2 When considering that public institutions include not only K-12 schools and health care facilities but also child care providers (home and center), elderly care providers, government offices, preschools, prison/correctional facilities, universities/colleges, it is clear that institutional sales could be significant market for Minnesota producers, particularly specialty crops growers. This is particularly possible should other institutions follow the exponential growth pattern of the farm to school movement within the state and nationwide.
While it is growing, institutional markets can be a difficult for farmers to access, particularly for small and medium scale producers. This is due to a number of systemic challenges (e.g., limited budgets, logistical needs, food safety requirements, etc.) that are difficult, yet not impossible to overcome. Such challenges are natural within an emerging market, but also must be seriously and actively addressed as they can reduce producer confidence to include institutional markets into their farm business plan. Further such challenges are often compounded by negative perceptions that are not informed by direct experience with such institutional customers.
This survey was designed to uncover farmer interest in institutional markets and the challenges and opportunities they see for accessing those markets.
Survey Design and Structure
The survey was co-designed by IATP, SFA and RTC, with advisory input from over 20 different non-profit organizations, state agencies, growers and experts with experience in both farm to institution practices and grower surveys. This included feedback collected from in-person meetings, as well as via e-mail. The survey was heavily influenced by previous grower surveys conducted by IATP, RTC, the University of Minnesota (UMN) and others. Combining existing best practice with feedback from a broad range of stakeholders throughout the process, a comprehensive online survey of 38 questions was designed using Survey Monkey. The survey was beta tested by a number of growers and other experts to refine language and functionality. The final survey was released on November 6, 2014. The final survey structure is included in the appendix.
Survey Promotion and Response
A promotional webinar entitled “Building Farm to Institution Markets: Webinar and Survey” was hosted by IATP on November 6, 2014 to officially launch the online survey.3 This webinar was aimed at Minnesota growers and was promoted to growers via a postcard mail-out, newsletter listings, social media postings (IATP, SFA, RTC, others) and e-mail list postings. The webinar was attended by 74 individuals. The survey was open for growers to complete between November 6 and December 22, 2014. During that time, 142 responses were received—including partial and complete responses. The majority of respondents live in Minnesota, with a few respondents from Wisconsin and South Dakota.
The design of the survey was affected by the length of time required for completion. Reducing the length of the survey was considered a priority because participation was voluntary and uncompensated. Thus, certain clarifying questions were omitted—particularly regarding real versus perceived benefits and barriers—to reduce the overall length. To further reduce the impact of time for completion on respondents, the survey was timed to be released in the late fall/early winter, after the fall harvest was complete in Minnesota.
Further, due to the online platform through which the survey was delivered, there is the potential that one individual could have submitted multiple surveys, however, this is unlikely. Efforts were made to make the survey linguistically accessible, but resources were not available for translation into other languages.
Key Highlights and Challenges
Respondents and Production:
The most common demographic characteristics identified by respondents were: white, male and age 55 to 64 years old. However, while there were limited responses from non-white individuals women represented over one-third of respondents and the age category of 45 to 54 years old was the second most common response.
While a majority of respondents had five years or less of farming experience and are thus considered “beginning” farmers, the second most common respondent had between 21 and 35 years of farming experience and would be considered highly experienced.
The most common farming operation was the family farm. The most common respondent operated a small-scale farm (i.e., one to three acres), but nearly one fifth of respondents operated a farm between 10 and 69 acres.
While the most common respondent reported earning less than $24,000 in gross annual income from agricultural activities, one out of every three respondents reported earning between $25,000 and $100,000 in gross annual incomes from such activities.
The most common product produced by respondents were specialty crops—specifically perishable vegetables—followed by animal products such as beef, bison and grains. Looking to future crop diversification, the most common crop that respondents were interested in adding to their operation were specialty crops—specifically fruits (non-apple) and apples.
Current Business Practices:
Most respondents were currently selling their products via wholesale or direct-to-consumer market channels. Looking to the future, most respondents were interested in exploring expanded direct-to-consumer, co-op and on-farm retail market channels in the coming five years.
A majority of respondents were delivering their product within an average radius of 40 miles with a 10 mile radius being the most frequent response.
Related to the challenge of delivery logistics, one in every four respondents were currently aggregating their product with other producers. Nearly half were interested in aggregation, though they weren’t currently doing so.
Farm to Institution Connections:
Of those currently selling to institutions, K-12 schools were the most common buyers (purchasing directly or through a distributor). Perhaps most importantly, three out of four respondents were interested in selling their product to institutional markets in the future, with universities and hospitals be most appealing markets. Those not interested in institutional markets cited liability, logistical and price concerns.
The primary benefit of institutional markets for respondents were the relationships with the local community, prices that they considered fair and steady, having an additional local market, and the option for advanced/reliable contracts. However, a majority of respondents still saw low purchasing prices (real or perceived) and the large volume needs of institutions as major barriers for engaging institutional markets.
Information Tools and Resources:
Regarding informational tools and resources that respondents were interested in for engaging institutional markets, the top three responses were focused on orienting business practices to meet institutional volume and product demands: food hub, cooperative and/or other aggregation setup information/support; common product specification sheets/checklists for various institutions; and business planning advice for starting or expanding institutional sales.
Respondents were interested in accessing information and resources on institutional markets through a mixture of in-person and online forums, including: regional farmer-buyer networking events, in-person workshops, an online producer-seller directory, informational webinars and farm visits/field days.
Respondents were most interested in working with other producers and existing farmer networks in expanding farm to institution sales, followed by working directly with institution staff and staff from state departments of agriculture (i.e., Minnesota Department of Agriculture). Distributors and Extension educators were the fourth and fifth most common response.