Best Hispanic Farmer’s Management and Marketing Strategies in Michigan

View the project final report

• 2008 annual report
• 2009 annual report

Commodities

• Fruits: apples, berries (blueberries), berries (other), berries (strawberries), cherries, grapes, peaches
• Nuts: chestnuts
• Vegetables: asparagus, peppers, tomatoes
• Animals: poultry

Practices

• Farm Business Management: farm-to-institution, market study, marketing management, new enterprise development, risk management, value added
• Sustainable Communities: analysis of personal/family life, ethnic differences/cultural and demographic change, leadership development, local and regional food systems, new business opportunities, partnerships, social capital, social networks

A survey and analysis of best marketing and management practices among Hispanic farmers in Michigan was conducted to determine the opportunities and barriers to access retail and food services markets in the Midwest.

More than 40 percent of Hispanic farmers are new farmers and have limited technical knowledge of production and marketing practices. Lack of markets in rural areas limits their capacity to diversify their marketing strategies. Skills gained selling in local markets help Hispanics adapt to requirements of different direct and indirect markets. Supporting the growing number of Hispanic farmers will benefit the thriving Michigan agriculture.

Introduction:

In Michigan, agriculture and related agri-food and energy system contributes around $64 billion and supports more than 1 million jobs. Farming represents around 11 percent of total direct and indirect impact to the agri-food and agri-energy system in the state (Patterson and Richards 2000). Michigan ranks number two in land use for vegetable, fruit and berry production in the Midwest and is a leading state in production of blueberries and tart cherries, among others products (Census 2009). However, small-scale farmers and in particular Hispanic farmers, continue to have poor economic performance despite overall indicators of economic expansion of the agricultural sector (Census 2009).

Small-scale farmers, or those farms with sales less than $250,000 per year have grown in number by 21 percent from 42,762 in 1997 to 51,540 in 2007, but they have posted decreasing value of total sales by 12 percent from approximately $1.24 billion in 1997 to $1.09 billion in 2007 (Census 2009). This is of particular concern for certain groups of small-scale farmers. Observing the category of fruit and vegetable producers out of 6,278 farms currently producing for fresh and processed markets, 57 percent of them are classified as small-scale operations. When we look at the category of limited resource farming, 15 percent of small-scale farms in Michigan fall into this group.
Michigan is the leading Midwest state in number of Hispanic principal operators (Census 2009). Like in other parts of the US, Hispanic farmers tend to specialize on production of fruit and vegetables (Lopez Ariza 2007). However, Hispanic farmers continue to struggle to maintain their farm viability. According to the Census of Agriculture, 53 percent have total annual sales of less than $5,000 in Michigan (Census 2009). This information reveals not only the importance of finding alternative strategies to increase farm viability for this segment of the farm population, but also the need to include and address in studies of local food systems the kind of support certain groups of small-scale farmers require to participate in markets which will only benefit the overall performance of the agricultural sector in Michigan.

Studies addressing small-scale farmers’ market access suggest that the expansion of the local demand for food have positive outcomes for farmers. In 2009, a consumer survey found that one in six adults in the US would buy locally produced food more than once week and 3 in 10 adults would buy local fruit and vegetables at least once a week or more (Mintel 2009). These shoppers, considered “true locals”, usually pay higher prices and will make considerable efforts to source local food (Carpio and Isengildina-Massa 2009; Mintel 2009). Consumer interest drives other participants the food value chain to demand more locally grown products from their suppliers. Sysco Inc., the largest food service company in the world, is actively organizing farmers to supply them with local produce in the Midwest (Sysco 2008). In 2008, Wal-Mart announced that they would source around $400 million of locally produced fruit and vegetables, with a projection that this would be the beginning of their ‘Heritage agriculture’ program (Gambrell 2008; Wal-Mart 2008). At the same time, other national and regional food retailers (e.g., Whole Foods Inc.) have made sourcing locally grown products a commitment throughout their organizations (Hollinger 2008; Meijer 2009; Whole Foods Markets 2009). However, expansion of local demand does not automatically translate in inclusion of small-scale farmers and Hispanic farmers in retail and food service supply chains.

Information that specifically focuses on understanding the perspective of small-scale Hispanic farmers and their current marketing strategies to access to and participate in retail and food distribution channels are limited. Two studies on Hispanic farmers in Michigan have addressed the limitations of these farmers when it comes to marketing their products. Santos and Castro-Escobar (2007) reported that most Hispanic farmers in Michigan never farmed before coming to the US and they follow the paths of family members who migrated before them; thus, their connections to markets tend to be limited. Lopez-Ariza (2007) found that marketing was an issue mentioned by Hispanic farmers during interviews (Lopez Ariza 2007; Santos and Castro-Escobar Forthcoming) However, both studies did not address in depth the issue of marketing and market access which are fundamental to maintain farm viability.

• Appendix 1. List of References

The objective of this project is to analyze and document the best management and marketing strategies that Hispanic farmers use in local markets and that can be adapted to include in their portfolio retail and food service channels to expand the availability of Midwestern-grown produce.

This case study starts from an understanding of the structure of the retail and food service channels which provides information about opportunities and barriers to access these highly competitive market channels. At the same time, it introduces the perspective of small-scale Hispanic farmers with respect to their own marketing strategies (e.g., mix of production and markets outlets) and what they perceive as constraints to expanding their marketing into different retail and food service markets.

In the short term, this case study is intended to help Hispanic farmers assess the requirements of supermarket and food service distributors. At the same time, it will help farmers and extension agents develop strategies based on the current marketing experience and skills farmers already developed in local markets and adapt their management and marketing practices that are most appropriate for their operations and that can improve their production and profit expectations.

In the intermediate term, the project offers an approach for working with Hispanic farmers throughout the Midwest in order to help them assess how to adapt their diverse production-marketing portfolios and improve their market access and profitability.

In the long term, the livelihood of Hispanic farmers should improve when adding retail and food service markets to their portfolios. In addition, the availability of Midwest produce in Midwest markets should increase as more Hispanic farmers adapt coupled production-marketing models to new market opportunities.