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Farmers can increase income by expanding small operations with creative new businesses
Farms that sell only fresh produce are dependent on buyers for markets and pricing. The UC Cooperative Extension small farms team in Fresno and Tulare counties believes farmers can earn more money by taking production a step further, by adding extra value to their products with processing, preserving and packaging the produce.
UC Cooperative Extension small farms advisor Ruth Dahlquist-Willard, the UC Sustainable Agriculture Research and Education Program, and Fresno State's Office of Community and Economic Development brought a group of small farmers together for a workshop in January to learn about resources available to help them develop value-added businesses.
“Value-added products can improve the bottom line of a small family farm by bringing in additional income and diversifying production,” Dahlquist-Willard said. “We wanted to connect beginning farmers and Southeast Asian farmers to programs that could help them develop and market value-added products from their farms.”
The value-added workshop included presentations from a farmer with a successful value-added business, government agencies and non-profit organizations. Alternative lenders such as Fresno Madera Farm Credit, who provided funding for the workshop, also presented on loans available for small-scale farms. UCCE agricultural assistant Michael Yang translated the presentations into Hmong.
Kingsburg organic farmer Paul Buxman opened the workshop with his personal journey into value-added production. Buxman's story begins in 1994 when a spring hail storm swept through his farm.
“The hail marked all my fruit. I had 100,000 pounds of plums, peaches and nectarines I could not sell. What could I do?” Buxman said. “An idea came to my head like a lightbulb. Take the fruit, cut off the scar, cook it and make jam.”
The new venture wasn't an instant success. Buxman found himself delivering unsold jam that first year to a Bay Area homeless mission, pulling up right behind a bread truck.
“Man does not live by bread alone,” he said with a laugh.
But each year he and his wife improved their product, and the market grew.
“This jam is so addictive, it's barely legal,” Buxman said. His “Sweet Home Ranch Homemade Preserves” costs $2 per jar to make, and sells for $5 each.
Buxman suggested the farmers at the UCCE workshop to try making a value-added product. The new products could be spices, food, cleaning products, handicrafts, and even experiences, such a teaching a skill.
“You have so much more to offer people than you realize,” Buxman said.
During the subsequent panel discussion, Kiel Schmidt outlined the support that Food Commons Fresno can provide. An important element is the opportunity to rent the organization's commercial kitchen to create value-added merchandise to health department specifications. Patti Chang of Feed the Hunger Foundation said her organization provides technical assistance and loans to new ventures that can carry out their mission of reducing hunger and helping people out of poverty.
“We worked with two Oaxacan women in Madera who didn't want to be field workers anymore,” Chang said. “They wanted to make a product from their culture: mole. They became a certified business, opened a bank account at Wells Fargo and opened a small restaurant in a grocery story. We helped them negotiate the lease.”
Eduardo Gonzalez of Fresno State's San Joaquin Valley Rural Development Center said his facility can help small businesses with marketing, website design and getting value-added products to market.
Dawn Goliik of the U.S. Small Business Administration said the organization can help small farmers start, grow and run businesses with training, mentoring and counseling.
“It's all free to you,” Golik said.
The UCCE small farms team also has a marketing associate, Lorena Ramos, who is available for farmers to contact regarding value-added product development.
Presentations and one-on-one consultations were offered by a variety of organizations that can loan funds, including Fresno Madera Farm Credit, Access + Capital, Northern California Community Loan Fund, California FarmLink, USDA Farm Service Agency and Valley Small Business Development Corporation.
The workshop ended with a presentation on California's Cottage Food Law, which allows residents to process and prepare foods in their own home kitchens to sell to the public. Some of the home-prepared products the law permits are jams, jellies, cookies, cakes and fudge, dried fruit, vegetables and spices. A complete list of approved foods is on the state website.
The Cottage Food Law is for businesses with a gross annual income below $50,000, which have no more than one employee (not including household members).
“There is no charge, just paperwork to fill out,” said Matthew Gore with Fresno County Environmental Health. “This isn't difficult, and we're here to help you with the forms.”
Dahlquist-Willard said an important part of her UC Cooperative Extension program is the connections she and Yang can help farmers make with the myriad services available to them.
“We encourage small farmers to contact us in our Fresno office,” she said.
Contact information:
Ruth Dahlquist-Willard, (559) 241-7515, rdahlquistwillard@ucanr.edu
Michael Yang, (559) 241-7523, myang@ucanr.edu
Lorena Ramos, (559) 241-7524, mlramose@ucanr.edu
Farmers get a taste of the possibilities of value-added farm products
Farmers, food artisans, agricultural support organizations and representatives from Sonoma County agencies recently gathered to share ideas for creating small-batch and artisanal “value-added” products featuring locally grown fruits and vegetables. On Nov. 3, UC Cooperative Extension hosted “Taste the Possibilities: Adding Value to Your Ag Business” in Sonoma County.
“Value-added production is an emerging food trend with the potential to help grow the local economy and support farmers' livelihood by tapping new revenue streams from preserving the peak of harvest and farm seconds that may otherwise go to waste,” said Julia Van Soelen Kim, UC Cooperative Extension advisor for the North Bay Area.
Farmers shared their inspiring success stories and business people provided insight on sourcing local produce, using commercial kitchens and co-packers, obtaining the right permits and registrations, and leveraging best practices in business planning and marketing.
But not everyone has the time, interest or ability to make the products themselves, said Merrilee Olson, a specialty food producer who participated in the workshop.
Her business, PRESERVE Sonoma, does custom co-packing services and private labels for growers and food entrepreneurs. As a co-packer, Olson makes value-added products in her commercial kitchen and cannery. She also helps food entrepreneurs connect with farmers and other sources of local produce.
“I started this business to help farmers get value-added products made,” said Olson, who opened in 2011, before the cottage food law passed. At that time farmers were losing money to overproduction and they didn't have very many options.
When a farmer found himself with an extra 1,500 pounds of ripe apricots, Olson turned them into apricot jam, which he is selling at the farm's store and farmers markets. Some people come to her with old family recipes and their own ideas for products. For tomato growers, she has made pasta sauce, salsa, tomato soup and bloody mary mix. “The bloody mary mix was the farmer's idea, and that will be on Whole Foods shelves,” Olson said.
“The idea of value-added products is well-known to farmers, but they may not know they don't have to do it themselves,” Olson said. “Some farmers don't really want to make the product, they want to farm. Even if you have a well-equipped home kitchen, making cottage foods isn't for everyone and you need insurance so it's easier to pay someone else to do it. We are a licensed cannery, which means we can make products like pickles, which are not covered in the cottage food law. ”
Olson thinks of the value-added farm products as preserving a way of life as well as food.
“Many farmers weren't aware of the range of options for value-added production that can help them use the abundance of their harvest, diversify their operations and generate new income for their ag businesses,” said Karen Giovannini, UC Cooperative Extension agricultural ombudsman in Sonoma County who helps local farmers expand their agriculture enterprises and navigate the regulations and permitting needed to do so.
“These emerging opportunities support farmers and food entrepreneurs, as well as regional economic development, and help to build a more robust local food system,” said Van Soelen Kim, who specializes in food systems for Sonoma County as well as Marin, Mendocino and Napa counties.
The workshop was offered as part of the “Opportunities in Ag Business” series presented by UC Cooperative Extension and Sonoma County Department of Health Services and was sponsored by American AgCredit. The educational workshop series aims to help make family farming economically viable, inspire the next generation of farmers, and support the development of a vibrant local food system.
Cottage Foods - a business in your home kitchen?
Have you thought of trying to sell your homemade jam, granola, pies, or candy? Do you have fruit from your orchard or vegetables from your farm that would have more value processed than sold fresh? Maybe a Cottage Food Operation is the place to test your product and your market and start your new business.
UC Cooperative Extension educators are offering two-session Cottage Food Operations Workshops at six different locations in Northern California. This hands-on workshop series is designed especially for farmers of fruits, vegetables, nuts, herbs, and honey interested in making value-added products in home kitchens as Cottage Food Operations (CFOs). The workshops are open to everyone. Classes will be small, with a maximum of 35 participants. Sign-ups are coming in fast, and some workshop locations are almost full, so anyone interested is encouraged to register soon. Registration is available on-line. Each two-session workshop costs $25 in advance, or $40 at the door, space permitting.
Workshop participants will learn multiple aspects of starting a safe and profitable home food production business, including the details of the Cottage Food Law, planning, processing, food safety, packaging & storage and marketing. Instructors will be UCCE nutrition educators, economists and farm advisors. Representatives from local environmental health agencies will provide information about the local application process. Each workshop will also feature hands-on demonstrations and tastings by current Cottage Food Operators making a variety of products.
Another big challenge to producing a commercial food product in a home kitchen, according to Hardesty, could be all the time that the producer will have to take properly sanitizing their home kitchen before and after they do the production work.
Although the new state law requires that Cottage Food Operations be permitted in all counties, with permits issued by the County Department of Environmental Health in each county, fees for registration and permits vary from county to county. Counties and municipalities may also vary in other restrictions and conditions required before Cottage Food Operations receive their necessary business license. Some counties or cities may place limitations on the number of customers per hour to a home business, limitations on open hours for sales from home, and parking space requirements for customers. The workshops will help participants understand how to navigate the registration and permitting process.
A Cottage Food Operation can be a good testing ground for a farmer to assess the marketability of a new product on a small scale. It can also be a low-cost way for a farmer to assess his or her own ability to produce and market a new product. Due to the restrictive nature of some aspects of the Cottage Food law, and the limited scale of production possible in a home kitchen, most producers may have to scale up eventually to be profitable. However, at least one farm family that is currently using a commercial kitchen for jam production is taking the class to decide whether a Cottage Food Operation would be an economical addition to their production capacity.
- Fairfield, May 13 & May 20, 2014
- Ukiah, May 15 & May 22, 2014
- Eureka, May 28 & June 11, 2014
- Redding, May 29 & June 10, 2014
- Jackson, June 12 & June 16, 2014
- Sacramento, July 1 & July 9, 2014
Cost: $25 in advance/ $40 at the door, space permitting
Register online: http://ucanr.edu/cfoworkshops
For more information: Shermain Hardesty, UC Small Farm Program, 530-752-0467, shermain@primal.ucdavis.edu
