Food Hubs Creating Economic Opportunity

Food hubs – centers of aggregation, distribution and marketing of food from small and medium-sized farms – are growing across the country. And intial research from the United States Department of Agriculture (USDA) indicates that they're making an economic impact on their communities as well. We've got some food hubs right here in Appalachia: Appalachian Sustainable Development's Appalachian Harvest project in Southwest Virginia, and the Chesterhill Produce Auction in southeastern Ohio are two great examples. The good folks at the National Sustainable Agriculture Coalition detail the results of the USDA's study in a blog post below.

On April 19, at the Making Good Food Work Conference in Detroit, Michigan, Agriculture Deputy Secretary Kathleen Merrigan released the results of a nationwide analysis of food hubs.  Merrigan focused on the  economic opportunities of food hubs, an emerging set of business models to provide additional outlets for small and medium sized farmers and bring local food to more consumers in a region.

“Food hub” is a general term that encompasses a variety of models.  Common features of food hubs are aggregation,  distribution, and marketing services for small and especially mid-sized farms.  The hub, for instance, may allow a farmer access to a broader market by packaging her product to the standards of a local grocery store, or may combine one farmer’s broccoli harvest with others in the area to fill a large order for a local institution.

Food hubs can manifest as non-profits, retail outlets, buying clubs, or even online directories of local producers.

“We have a historic opportunity to help win the future by laying a new foundation for economic growth,  creating jobs and building and revitalizing critical infrastructure here in Michigan and in rural communities across America through supporting and establishing local and regional food systems as an economic development strategy to keep wealth in local communities,” said Merrigan.

The USDA’s Know your Farmer, Know Your Food subcommittee on food hubs, in partnership with the National Association of Produce Market Managers, the Wallace Center at Winrock International, and the project for Public Spaces, has identified over 100 operational food hubs in the country and conducted an analysis of over 70 operational food hubs.  Preliminary survey results indicate:

  • Over 100 food hubs are in operation around the country, with significant clusters  in the Midwest and Northeast.
  • Average food hub sales are nearly $1 million annually.
  • On average, each food hub creates 13 jobs.
  • The median number of small and medium size suppliers served by an individual food hub is 40.
  • Almost all food hubs offer fresh produce and the majority offer dairy and protein products as well.
  • Nearly 40 percent of food hubs surveyed were started by entrepreneurial producers, nonprofits, volunteer organizations, producer groups, or other organizations looking to build  a strong distribution and aggregation infrastructure for small and medium size producers.
  • Over 40 percent of existing food hubs operate in “food deserts” to increase access to fresh, healthful and local products in communities underserved by full-service food retail outlets.

This research was released at Making Good Food Work, a conference in Detroit, Michigan, sponsored by the CS Mott Group for Sustainable Food Systems at Michigan State University, the University of Wisconsin Extension, the Wallace Center at Winrock International, the Food Systems Economic Partnership and the Detroit Food Policy Council.

The Know Your Farmer, Know your Food initiative promotes a connection between producers and consumers, and hopes to create new opportunities for farmers, ranchers, consumers, as well as rural communities. In addition, the initiative hopes to expand access to healthy food for people nationwide.

USDA expects demand for local food to grow from about $4 billion in 2007 to as much as $7 billion by 2012.  This indicates a great deal of economic potential for more food hubs around the United States, enabling smaller farmers to be connected to larger local and regional markets.

The preliminary findings can be found here.