Tag: Specialty crops

In collaboration with AgLaunch and its Farmer Network, we conducted an online focus group with four small-scale, specialty-crop producers. Insights from the discussion may provide helpful information for Extension educators regarding farmers’ views and use of marketing contracts/agreements and digital trading, marketing, and payment platforms, including their experience trialing the features of different platforms and the advantages and disadvantages of the platforms used. The discussion also included farmers’ preferences for marketing their agricultural products, the effects of the COVID-19 pandemic on their operations, and farmers’ views and knowledge of blockchain technology, internet access, and mobile applications.

Here are the main findings of the focus group:

• Participating farmers were small-scale (1 to 6 acres), specialty-crop growers of leafy greens, root crops, and other vegetables. Current certifications included Certified Naturally Grown (CNG) and USDA Organic, while past certifications included Good Agricultural Practices (GAP). The presence of a buyer requiring GAP certification drove the farmers’ decision to get certified.
• Some digital trading/marketing platforms they use include Shopify and Barn2Door. Platforms they previously used or tested include Farmigo and Harvie for Community Supported Agriculture (CSA), Squarespace, and Local Line. They also discussed digital platforms to process payments at the farmers’ market, including PayPal, Square, Cash App, and (PayPal-owned) Venmo, as well as the pros and cons of these platforms based on their experience.
• Their most important concerns regarding digital trading/marketing platforms and the features they seek in such platforms include the benefits outweighing the costs, convenience for their customers, ability to communicate with their customers, privacy and security, cybersecurity threats, customer service/support by the platform developers, training and technical assistance opportunities, and the platform’s ability to work/connect with other systems used on the farm (in other words, interoperability).
• They agreed that the importance of communicating farm and product attributes to buyers through a trading/marketing platform depends on what their buyers want, their location, and their relationship with them. They also agreed that different buyers place different emphasis on these attributes.
• They observed the repercussions of the COVID-19 pandemic regarding the closure of many restaurants and food-service institutions and the negative impact those closures had on produce suppliers. Some farms emphasized online sales, while others downsized or closed permanently.
• They use or had used verbal or informal agreements instead of written or formal contracts. Key contract attributes include quality and processing specifications, payment method and turnaround, delivery and packaging requirements, delivery time, a guaranteed purchase, a guaranteed minimum price, and penalties for non-fulfillment. If formal contracts were an option, these would be important if they were selling higher volumes to wholesalers, selling to buyers with whom they did not have an established trust relationship, or if the transaction involved custom product requests for which they had to considerably invest additional time and resources. Depending on the parties’ risk tolerance, the higher their perceived risk from these transactions, the more they would favor formal contracts.
• The farmers had heard about blockchain before, but their level of familiarity ranged from minimal to very familiar. After learning more about blockchain and smart contracts, most farmers expressed that they would feel comfortable using blockchain ledgers to store their information but thought the technology might be better suited for transactions with institutional buyers.
• Their concerns about blockchain applications in agriculture and food supply chains included a need for a better understanding of these applications and their problem-solving capabilities, the cost and transaction fees, and long-term sustainability.
• They expressed comfort using mobile applications in general. However, all farmers viewed internet access as an issue for rural and urban locations.

To access an Extension publication with more information on the experiences shared by farmers, please click HERE.

It depends on whether you will be carving a jack-o’-lantern, decorating, or baking a pumpkin pie. And if carving a jack-o’-lantern, on what size. The U.S. Agricultural Marketing Service (AMS) surveys large retailers, and every week, publishes a national retail report of advertised specialty crop prices ending during a given period, usually an almost 2-week window. In this post, I take a closer look at the retail pumpkin prices for the Southeastern United States (i.e., Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia) published by the AMS in the specialty crop retail reports released in October 2018, 2019, and 2020.

On average, advertised retail prices for all pumpkins in the Southeastern United States in October 2020 were 8.9% higher than those in October 2019, and prices in October 2019 were 8.3% lower than those in October 2018, leading to similar average prices in October 2020 to those in October 2018 (Figure 1). Average retail prices for extra-large pumpkins in October 2020 were also close to those in previous Octobers, without much fluctuation in prices throughout the month this year (Figure 2). However, it seems that average retail prices for large and medium pumpkins this October were higher than in previous years, with medium pumpkins seeing yearly price increases. While average retail prices for large pumpkins in October 2019 were 1.9% lower than those in October 2018, they increased by 7.9% from October 2019 to October 2020 (Figure 3). Average retail prices for medium pumpkins in October 2019 were 1.7% higher than those in October 2018 and 18.0% higher in October 2020 than those in October 2019. Data collected from 311 stores show that advertised prices for medium pumpkins were highest for the period ending during the 2nd-3rd week of October 2020, when unit prices ranged from $4.00 to $8.00 and averaged $6.83 (Figure 4).

 

 

 

Many factors can drive up the prices of consumer goods, like supply chain disruptions, government policies that boost demand and economic growth to the point that demand exceeds production capacity, and people’s or firms’ expectations of higher prices. Food inflation measures how much more expensive food has become over a certain period. According to the latest inflation data available from the U.S. Department of Labor Statistics, the average price of food at home in the United States rose 1.0% from October 2018 to October 2019 and 4.0% from October 2019 to October 2020. Thus, the increases in retail prices for large and medium pumpkins in October 2020 relative to October 2019 (7.9% and 18.0% for large and medium pumpkins, respectively) were higher than the food inflation rate of 4.0% for October 2020. Although the food inflation rates published by the U.S. Department of Labor Statistics capture many factors influencing food prices during the previous 12 months, this comparison might suggest that the cost of those two pumpkin sizes in October 2020 grew at a faster pace than recent estimates of the overall cost of food.

In contrast with other sizes, miniature and pie type pumpkin prices were lower this year than in previous years. On average, advertised retail prices for miniature pumpkins in October 2020 were 13.3% higher than those in October 2019, and prices in October 2019 were 17.4% lower than those in October 2018, leading to lower average prices in October 2020 than those in October 2018 (Figure 5). Average retail prices for pie type pumpkins in October 2020 were also lower than those in previous Octobers, with pie type pumpkins having yearly price decreases. Average retail prices for pie type pumpkins in October 2019 were 6.7% lower than those in October 2018 and 5.0% lower in October 2020 than those in October 2019 (Figure 6).

 

 

Whether you will be carving a jack-o’-lantern, decorating, or baking a pie, the figures in this blog post can give you more insights on how pumpkin prices at your local store compare with average prices at major retailers in the U.S. southeast region—and on whether those local price tags are scary or not.

 

Google Trends is an online tool that allows you to analyze the popularity of Google Search inquiries. If you enter a search term, the site randomly samples Google Search’s massive database to produce indicators of Google users’ past interest in that term. For a given region and time range, the site calculates an index between 0 and 100 for each point in time and produces a chart of interest over time, among other indicators. If analyzing a single search term, a peak value of 100 indicates the point at which the term was most popular for the region and time range selected (that is, the point with the highest percentage of searches for that term out of all searches conducted). The other values represent search interest relative to the highest point on the chart. So, if point A has a value of 100 and point B of 50, the term was half as popular at point B than it was at point A.

I used this tool last year for a talk at the Southern Agricultural Economics Association in which I illustrated how people in the United States, including consumers, lobbyists, and policymakers, are actively searching online for information on key topics related to the food industry (such as the terms local food, food waste, food miles, cottage food, pasture-raised, cage-free, vegan, GMO, bioengineered, or gene editing), and how sometimes their interest starts picking up years before legislators pass major food bills into law. Recently, Dr. Tim Woods at the University of Kentucky asked me what one of my graphs would look like if I included observations from the COVID-19 era, a great question that I will try to answer in this post!

Figure 1 below shows the average Google Trends scores for the terms Local Food, Food Waste, Cottage Food, Online Groceries, and Home Gardening from 2004 to September 2020 so far. Figure 2 shows the Google Trends scores for the same search terms but disaggregated monthly from January 2018 to September 2020 so far. Because I am interested in search interest for these industry segments relative to themselves, which in this case makes any spikes more meaningful, I first entered each term in Google Trends and then combined the data, instead of comparing the different terms against each other.

 

 

 

Here are a couple of things that these figures might tell us: Figure 1 suggests that search interest in the terms Local Food, Cottage Food, Online Groceries, and Home Gardening in the United States has increased during 2020, with Online Groceries showing the most noticeable change relative to previous years, and that search interest in Food Waste has decreased during 2020. Many news outlets have reported that the pandemic has given consumers more reasons to eat local food, accelerated the trend toward online grocery shopping, and changed gardening forever, reports that might partly be behind the increases in search interest in these terms as people respond to media coverage. News outlets might also write more media coverage in response to high search interest.

Although the increase in online search interest might signal increased demand for information on these topics but may or may not translate into more actual transactions by the general U.S. public, some horticultural businesses might interpret this inflow of information as a sign of steady consumer demand for related products and services beyond 2020 and decide to pivot their businesses toward these industry segments. Yet, Figures 1 and 2 combined suggest that some of these segments might have more staying power than others. While search interest in Local Food, Online Groceries, and Home Gardening has increased during 2020, Figure 2 shows that their interest peaked between March and May of 2020 and dropped considerably in the following months. Interest in Cottage Foods was relatively low in March but peaked in July. After dropping, interest in Local Food and Cottage Food has increased, interest in Online Groceries has fluctuated, and interest in Home Gardening has continued to decline. A look at Google users’ search interest since 2004 to date (Figure 1) shows upward trends for Local Food and Cottage Food, an also upward but much flatter trend for Online Groceries, and a declining trend for Home Gardening. Interest in Local Food has increased over time at a pace slower than but similar to that in Cottage Food and Food Waste (as indicated by Local Food’s flatter trend), while interest in Online Groceries has increased over time at a pace much slower than that in Local Food (as indicated by Online Groceries’ flatter trend).

If pre-pandemic trends are any indication, it is possible that search interest in Local Food, Cottage Food, and Food Waste will continue to rise after the pandemic, maybe fueled by the recent interest in short local supply channels, the expansions to some states’ cottage food laws, and the growth in the upcycled food products industry. While search interest in Online Groceries has seen an upward trend since 2004, interest after COVID-19 might not grow as fast and dramatic as 2020 levels might suggest. It is also likely that interest in Home Gardening will wane beyond 2020. In a recent presentation at this year’s virtual Southern Outlook Conference, Dr. Ben Campbell from the University of Georgia reported that the Green Industry (which includes home garden centers, nurseries, turf, floriculture, among other sectors) has grown over the past decade and during COVID-19. He finds in a survey that 60% of respondents planted a garden, put in new turfgrass, or did some outdoor renovation like putting in new plant beds because they spent more time at home during the coronavirus pandemic. But he also warned that some firms might overproduce in 2021 because they might expect 2020 demand levels. Of course, many other factors like the effects of the pandemic-induced recession on the U.S. public’s income will influence the direction of these industry segments in the future, particularly for non-essential goods.

The Food Safety Modernization Act (FSMA) has important implications for the marketing of fresh produce in the United States. Under FSMA, the U.S. Food and Drug Administration (FDA) is charged with crafting, implementing, and enforcing most of the rules that constitute FSMA. In essence, FDA is introducing more frequent food safety inspections and, for the first time, science-based prevention-oriented mandatory standards for different stakeholders in the U.S. food supply chain. These standards pertain to five key areas: food preventive controls; produce safety; import safety; intentional adulteration of food; and sanitary transportation of food.

Since FSMA was enacted in 2011, several rules have slowly yet successfully evolved from the proposal stage to the final stage, with five of the FDA’s seven proposed foundational rules being finalized and published last year. These five rules relate to the areas of food preventive controls, produce safety, and import safety. A rule of particular importance to the fresh produce industry is the produce safety rule, Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption, which was issued on November 13, 2015. 

For an overview of FSMA’s final foundational rules published so far and a discussion of their possible implications for the U.S. specialty crop industry in terms of costs and benefits, market structure, and public health concerns, click HERE.

 

Important implications for the U.S. Specialty Crop industry can be found in several titles of the recently passed 2014 Farm Bill. Key programs to solve critical issues in the industry have been reauthorized and changes related to funding level and matching requirements have been incorporated in some of these programs. For instance, the Technical Assistance for Specialty Crops (TASC) program, the Healthy Food Financing Initiative (HFFI), the Specialty Crop Research Initiative (SCRI), the Farmers’ Market and Local Food Promotion Program (FMPP), and the Specialty Crop Block Grants program have been reauthorized. Three key farm bill programs that have formed the success of U.S. organic farmers over the past decade: The Organic Agriculture Research and Extension Initiative (OREI), the Organic Production and Market Data Initiatives (ODI), and the National Organic Certification Cost-Share Program (NOCCSP), have also been reauthorized.

Moreover, changes in the definition of a “Retail Food Store” in the Nutrition title allow agricultural producers who market directly to consumers (i.e. Farmers’ Markets, CSAs, roadside stands) to accept SNAP benefits. The feasibility of redeeming these benefits through on-line and mobile transactions will be tested through pilot projects. If these pilot projects prove to be successful and are implemented nationwide, agricultural producers who sell directly to consumers may be able to accept SNAP benefits through on-line and mobile transactions starting in 2017. Overall, this bill contains considerable support for direct-to-consumer marketing, locally or regionally produced agricultural products, Farm-to-School efforts, organic agriculture, and food safety initiatives – all crucial topics for stakeholders in the U.S. Specialty Crop industry. For a summary of these and other important implications, click HERE.