Marketing Small Grains Direct

Final report for FNC21-1311

Project Type: Farmer/Rancher
Funds awarded in 2021: $26,824.00
Projected End Date: 01/31/2023
Grant Recipient: Doubting Thomas Farms
Region: North Central
State: Minnesota
Project Coordinator:
Noreen Thomas
Doubting Thomas Farms
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Project Information

Description of operation:

We farm 1200 acres certified organic. This is a family operation with daughter-in-law Melany Thomas farming her first year. She took on growing buckwheat, growing barley and peas, and also selling direct to end user.

Summary:

Developing a regional grain alliance opens markets for farmers, giving more financial control back to local producers while offering other options beyond the dominant corn and soy system. The expanded options helps develop business plans that are more ecologically diverse and economically resilient (as grains can be sold year-round). The grantees are specifically interested in more cover crops and using less costly, more eco-friendly inputs to preserve water and soil. Grains typically travel the farmer-cleaner-middleman-buyer-packer-market route. We plan to shorten the chain and provide stability by offering direct sales while developing long-term business relationships.

Community members will have an option to use regional grains and are able to trace the origins of their loaf of bread all the way back to the ground. Currently, there's not a centralized direct source of food-grade grains in our area. A local grain collaborative could promote healthful varieties like pumpernickel and buckwheat (part of many New American diets). Grain and mixtures/flour could help CSAs too by creating the possibility of incorporating grains/mixes into their usual assortment of produce. CSA/owners could receive some profit and form important partnerships with grain farmers, while also benefiting from grain sales when produce availability wanes.

Project Objectives:
  • Increase sales of regional grains to retail/wholesale accounts.
  • Develop marketing plan and public relations for grains.
  • Develop packaging/labels/logos of both retail and wholesale sales.
  • Create business relationships with retail/co-op outlets and emerging businesses (dog treat, granola companies).
  • Provide educational outreach to other regional farmers.
  • Provide opportunities for farmers to attend field days to learn more sustainable ways to grow small grains and market grains.
  • Encourage farmers to take classes and gain knowledge about soil health and importance of crop-rotation.
  • Provide field day/Zoom field day/special invite to be inclusive of New American farmers and beginning farmers.

 

Cooperators

Click linked name(s) to expand/collapse or show everyone's info
  • Melany Thomas - Producer
  • Noreen Thomas - Producer
  • Elise Trangsrud - Producer

Research

Materials and methods:

sare graph

For the scope of this grant, we plan to use several platforms to track our sales, profits, number of businesses and retail stores, as well as total sales. We can compare that to the traditional practice of simply selling grain to the buyer. We can determine which products are top sellers and pinpoint the best seasons for buying (example: wintertime baking, etc.). We also can compare sales at different venues, for instance, a farmers market, selling through food hubs like Sprout vs. sales at retail stores. We can also track effectiveness of promotions, for instance, comparing the reach and engagement of an ad or boosted post on Facebook vs. in-store promotions. These assessments will give a clear and quantifiable picture of what works and how that translates into our bottom line. We can also track income by crop/farmer. (See above for example of charts we would use.) We also can track where customers are from and whether they become repeat customers to figure the conversion factor.

We can get a good overview of community engagement and challenges by tracking social media comments and analytics and monitoring web traffic. Social media and the web also would help us identify competition and popular price points. We can also use social media to track demographics, age, and other data that indicates a high interest in buying small grains. 

Research results and discussion:

We looked hard at the income and loss and profit. The result was that we were able to gain a lot by going from a conventional farming model to a cleaned, tested, packaged and shipped grain model. We gained 3 to 6 times the amount of money we would get per bushel if we just sold "bin run" grain that is loaded and carted off by semi. It drives home how many middle people handle your grains all the way to the end user.  BUT it means work on your side and responding quickly to customer requests/orders which is not for everybody.

We also looked at the financial results from the connections made to reduce costs. We were able to group buy supplies like super sacks (to fill totes holding 2000 pounds each) and reduce that from $600 a farm down to $100 per farm=$1500 total savings. We also leveraged buying power for pallets needed for shipping. Wood pallets were in short supply (wood prices skyrocketed). So by working as a cohesive group we were able to work with a food manufacturer and went from $30 a pallet down to $5.00 per pallet saving hundreds of dollars for each farm just in the first year! As sales increase the savings do also.

We are working closer than ever with plant breeders to develop varieties and potential crosses (old varieties of grains mixed with new non-gmo varieties making a mix of flavor and growing ability). This means more direct participation in what is being developed. Previously there was zero input from farmers. The plant breeders and plant scientists find this gives much better job satisfaction and comment that they like the feedback. It is a faster track than releasing a variety with a flavor that the bakers don't like -- most plant breeders have been in this track. This also allows us first into the market with the ability to grow foundation seed. If we have foundation seed and follow the guidelines, we can also sell the seed to the other farmers and the group capturing  $1 to $5.00 a bushel.

Two of the beginning farmers had more pushback with loans since they were just beginning. We shared invoices, history and new contracts with bankers documenting potential. The loan officers had less difficulty in understanding the true financial picture of the farms. It also opened the door for better crop insurance by the pricing in the documents. We also pushed using the beginning farmer reduction in crop insurance of 10%  (can be $100 to $900.00 per farm savings) of the premium making sure the farmers could take advantage of the discount. This is sometimes not mentioned to new farmers. 

We have developed a revenue stream for screenings or grains that are smaller or not good for milling. So far sales in one year have added 5 other farmers from cricket farms, chicken farm, pig farms and homesteaders. We are able to be at zero waste and add revenue not captured before of $3 to $5000 in sales in one farm.

We have reduced shipping rates by keeping companies we can work with as a group. For out-of-state shipping we established a business relationship with several shippers which previously at the start of this project was at 1 to 2 time higher in prices per pallet to ship the grains. Prices for shipping dropped by establishing a business account, and have stayed competitive even during times like covid, despite being pushed by the high demand by large firms trying to push their products for shipping. There also was a rise in diesel fuel but we were able to keep this stable by bunching some orders together.

Communication between the farms is strong sharing any obstacles and working together to help each other creating more satisfaction and quality of life. Financial gains for the farms include selling at a better price, adding new grains not ever offered by the farms, and also creating new products utilizing several grains that benefit all the farms. (New products include 5- and 7-grain cereal. Number one seller at a local restaurant). Also we were able to cross sell our grains and utilize cover crops which could be milled. This is better for the soil, water quality, and better for farmer rotation. This previously was not done in the scope currently done by the farms. It also helps keep work flow more even for the farms. By not having just soybeans and corn all harvested in fall at the same time you have cover crops harvested in July spreading out the use of machinery, labor, and grain space.  The summer was impacted by severe drought so by getting higher prices we were able to better handle the lower yields.

I am sure we are just beginning with a roll out of how we can develop even more collaboration together and add on other farmers in the mix.  As a side story one of the bakers we started to work with needed pumpkin seeds. A  New American we contacted tried to grow the seeds and it looks like he will be a grower for the baker and able to ship with us (putting the seeds on top of our grain in a secure bag) and provide a niche and income for a beginning New American farmer. There are several projects developing like that because of the relationships forged through this SARE grant. The amount we forecasted to sell has doubled and we expect that to increase as we gain traction. It would not have been possible without the help of you! Thanks for being part of our story.

For the beginning farmers, helping them to blaze a trail is important. Relationships with chefs and bakers were forged, and being able to prove it to the bankers that it is not all soybeans and corn, that the beginning farmers have a place at the table too was so worth it.

 
 
Participation Summary
3 Farmers participating in research

Educational & Outreach Activities

4 Consultations
2 On-farm demonstrations
2 Online trainings
2 Tours
4 Webinars / talks / presentations

Participation Summary:

60 Farmers
5 Ag professionals participated
Education/outreach description:

We published the soil health day in NPSA as well as the local newspaper. We also connected with NRCS staff as well as Sustainable Farming Association. sare article in Germinator

Learning Outcomes

6 Farmers reported changes in knowledge, attitudes, skills and/or awareness as a result of their participation
Lessons Learned:
By direct marketing of the grains together, we have really learned to understand the language of many of the millers, retail sellers, and bakeries and cottage industries. It is understanding too how the end user wants the grain shipped (totes or retail?) or what the specifications are for each business we work with.  We've learned "bin run," or straight from the combine is not always what the end buyer wants. We invested in better screens for cleaning and continue to learn about the best approach for cleaning grains. Factors like grain size and how clean/dirty it is can really determine what screens, etc., we use. Important pieces of the puzzle are shipping logistics: How will we get a tote (2,000 pounds grain) from farm to business or how to transport several totes to the other businesses buying the grains. We also found we could coordinate to get a full load, thus reducing shipping costs.

Project Outcomes

5 Farmers changed or adopted a practice
5 New working collaborations
Success stories:

"We opened a new door through this grant. Everything from small cottage pet food makers, to bakers in larger cities. I have never thought about selling direct before and learned a lot," said a beginning farmer. 

 

We were able to sell our cleaned grains but very importantly were able to sell our scratch grains to hobby chicken farmers, turkey farmers, hog and cricket growers. "We are at zero waste," was one comment from another farmer.

Recommendations:

This already has bubbled up to include more grain farmers in our area, mostly women. The resources such as seed, tools, and knowledge are quickly being shared and things are moving fast. We have formed a Women in Conservation group sharing best practices and sponsored a soil health day for all. 

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.