“Local” has been a buzzword in the produce industry for years, and the trend has allowed consumers to take advantage of fresher foods and allowed retailers to reduce transportation costs.
But what has it actually meant for growers?
“I don’t think it’s an advantage for the grower,” said Jeff Walker, salesman for TC Marketing Inc., Napoleon, Ohio.
“Retailers want you to be priced out for six weeks. It pinches you. It’s hard for a small regional farm that’s only in business six months a year. If the market is strong, you can’t take advantage.”
Walker said some big retailers, such as Wal-Mart Stores Inc., ask for up-front pricing for the entire season.
“We don’t sell to Wal-Mart for various reasons,” he said.
“That’s one. We want to make more per box if the market warrants it.”
Tim Hanline, president of Onion Boy Inc., Shelby, Ohio, said it’s difficult to agree to long-term pricing before a season because growers “don’t know what you’re going to have until it comes out of the ground.”
Onion Boy typically begins its harvest in late July or early August and ships onions from storage into April. Hanline said some retailers have asked for six-month contracts.
“That stops upswings in the market,” he said.
“There are no peaks.”
Hanline acknowledged that fixed pricing protects growers against dips in the market, but he added that some of the contracts the company has been offered by retailers are below the price of production.
That has forced the company to seek more customers in the processing, foodservice and wholesale segments of the supply chain.
Urbana, Ohio-based Michael Farms also has been offered below-production-cost contracts, president Scott Michael said, but the company has rejected them.
“Local is a big deal,” he said. “Retailers are buying whatever we have for local, but they temper that somewhat with price.”
Michael said the grower-shipper uses the state’s Ohio Proud logo on some of its items, and the majority of its product is sold within Ohio, Indiana and Michigan.
He said retailers in the state have used photos of his family and local banners to sell their green beans.
“It helps,” he said.
Ben Wiers, president of Willard-based Wiers Farm Inc., said the company has participated with customers in advertising at the point of sale as well as commercials on regional television.
“In general, we do everything we can to help our customers tell our family farm’s 120-year story,” he said.
“I think most people appreciate it when they read our label and realize they can find the point on the map where that food was grown and packaged and can learn about the people who produced it.”
Local demand extends to foodservice, said Kirk Holthouse, co-owner of North Fairfield, Ohio-based Doug Walcher Farms and Holthouse Farms, Willard, Ohio.
Holthouse also handles product from partners in Michigan, New Jersey, Kentucky and Indiana.
“Everything we’ve got, they want to know where it’s coming from,” Holthouse said.
“Is it coming from Ohio? What city is it coming from? They are definitely promoting it just like retailers, whether it’s hospitals, schools or restaurants. They want to know their food is coming from as close to home as possible. That’s a big selling point.”
Local all year long
Although some may associate local with summer, Leamington, Ontario-based NatureFresh Farms has taken advantage of local demand with product from its Ohio greenhouse.
“During the winter season, I would think most retailers would embrace the opportunity to sell product that is grown in the USA or even considered locally grown, depending on where they are located,” said director of marketing Chris Veillon.
“In the end, it is about quality delivered to the consumer.”
Veillon said demand for locally grown is “growing like wildfire” because of its ability to remove significant food miles and ensure a better quality product is getting to market faster and getting to consumers’ homes faster too.