Cooperative Marketing of Organic Produce and Animal Products Direct to Consumers

Project Overview

FS00-123
Project Type: Farmer/Rancher
Funds awarded in 2000: $15,000.00
Projected End Date: 12/31/2002
Region: Southern
State: Arkansas
Principal Investigator:
Margaret Carey
Organic Growers Assoc.

Annual Reports

Commodities

  • Animals: bovine, swine, poultry
  • Miscellaneous: mushrooms

Practices

  • Farm Business Management: community-supported agriculture, marketing management, market study

    Summary:

    The challenge facing small producers and marketers of high-quality pastured animal products and organic vegetables and fruits is how to survive in the rapidly-growing natural and organic foods market by increasing production income while decreasing costs. However, the organic wholesale market is steadily losing its viability for the small-scale farmer due to competition from large-scale growers.

    Although the market for sustainably-produced food is growing, Ozark small farmers dedicated to growing high-quality organic fruits and vegetables or pasture-raised animals are very much at risk. Large producers are entering the marketplace with factory production methods and labeling terms that imply sustainable production that can mislead the consumer. Competition at the wholesale level for limited shelf space combined with poor transport systems make small-scale farming for wholesale prices unprofitable and requires off-farm income to support the family farm as a lifestyle, not a livelihood.

    We at Ozark Organic Growers Association (OOGA) addressed the problem by exploring whether cooperative marketing of vegetables, fruits, eggs, and meats directly to consumers would favorably impact the individual bottom lines of OOGA growers and other regional producers.

    We did this by combining the marketing and distribution efforts of a diverse mix of growers and producers. Our product line included the sales of produce (fruit, vegetables & mushrooms) and meat (poultry, including turkey & eggs, beef, pork and lamb).

    Our greatest successes were sales made direct to consumers and to high-end restaurants. The first was accomplished by working with an established CSA. Our results indicated that a CSA could be started or expanded to include all of the above products and that if properly managed, coordinated and committed with enough product on a consistent basis, could be potentially profitable to everyone participating in the sales.

    Two of our producers functioned as marketing representatives to the high end, chef-owned restaurants. They made sales calls, promoted all of the products available and provided samples as necessary. This proved to be the most complex aspect of our effort because we had to develop a marketing plan and manage it, as well as following traditional sales protocol. We had to coordinate the billing for each customer, track the billing, collect the monies and disburse the funds.

    The most challenging and costly aspect of our project was distribution of product. Growers and producers were responsible for getting their product processed, packaged and delivered to centralized distribution points. But, due to logistics this was difficult to coordinate and proved to be very costly. Ultimately, we did not solve this problem for the whole group. Some growers in the more far-flung rural areas are selling individually, and some are going out of business. Others who are grouped around a target market area are coordinating on a smaller geographic scale where they can capitalize on the gains in consumer and restaurant sales while avoiding high distribution costs.

    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.