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Economically Empowering

Food hubs help farmers scale up and improve their bottom lines. 

“We can’t compete in international markets, so food hubs allow smaller, local farmers to scale up and become economically viable.” 

Barry Thoele loves working the land. He started raising bait minnows in 1992 and eventually expanded into produce, growing anything from romaine lettuce to kale to cherry tomatoes that are so sweet he says moms from across the region serve them to their kids for treats. His farm, called Barry’s Cherries —named for those delicious tomatoes—sits on 22 acres in Staples. But because Thoele also uses hydroponics, which replaces soil with a nutrient-rich mineral and water solution, he’s been able to boost his capacity well beyond what the land alone would provide and extend his growing season with 7,000 square feet of plastic-wrapped high tunnels and a green house. “I do a lot of research into sustainable practices,” he said. “It’s my life’s dedication.” 

Thoele isn’t as adept at the hustle and bustle involved to get those products to new customers. While he grows far more vegetables than he could personally sell at the farmers markets he attends, Barry’s Cherries is too small an operation to attract large-scale customers such as school districts, senior residences, restaurants and hospitals.

Luckily for Thoele and other small and mid-size growers like him, there’s a new way for their food products to reach a broader customer base. Called food hubs, these regional businesses and nonprofits manage the aggregation, distribution, billing and marketing of products from local and regional farmers to wholesale, retail and institutional customers. A farmer growing basil, for example, can now take her weekly yield to a food hub, where it will be combined with other farmers’ basil to satisfy a nearby restaurant’s need.

It’s a possible solution that excites regional economic experts. “Central Minnesota has a short growing season and many of our counties have marginal soil quality and limited production capacity,” said Don Hickman, the Initiative Foundation’s vice president for community and economic development. “We can’t compete in international markets, so food hubs allow small, local farmers to scale up and become economically viable.” The Foundation has provided funding for food hub feasibility studies in the region and supports initiatives that benefit small farms through its Family Farm Fund.

Growing Business

Today, most of the food we buy at the grocery store is grown and raised on large corporate farms in California, Florida and Mexico, according to a report by the United States Department of Agriculture’s Economic Research Service. Because mid-size and small commercial farms can’t compete with the big farms’ prices or distribution reach, they have typically relied on direct-to-consumer channels, including community sponsored agriculture (CSA) and farmers markets.

While the popularity of those markets has certainly been a win for customers seeking the most flavorful and nutritious food available, it hasn’t always meant economic success for farmers. “A grower could do three or four farmers markets a week, which involves a lot of work harvesting, sorting and transporting the product to the market, which could be more than an hour away, all the while keeping it fresh,” said Greg Schweser, an associate program director for the Regional Sustainable Development Partnerships (RSDP) at University of Minnesota Extension. “If it’s raining or the market isn’t always crowded, you might have a hard time making your money back.”

Selling through a food hub expands and diversifies a grower’s business model. As the enthusiasm for the local food movement moves beyond the individual shopper to restaurants and other large institutions that serve meals, small farms, many of which have been struggling since the Farm Crisis of the 1980s, may now have an opportunity to strengthen their bottom lines. “There isn’t just one way to grow food,” said John Mesko, executive director of the Sustainable Farming Association and a Princeton farmer who raises pork and beef. “Food hubs are critical if we are going to have a diversity of models for food production.”

Creating a market for locally produced foods keeps more money in the community and has the potential to increase revenues. The annual resident food expenditures in Central Minnesota add up to almost $1 billion each year, according to the USDA Economic Research Service. And while current Minnesota food hubs still rely on donations and grants to stay in business, a National Food Hub Collaboration survey found that food hubs create an average of seven full-time jobs and five part-time jobs within the hub itself.

That extra income could in turn boost the prospects of the towns that surround the small farms. “Small businesses have a bigger impact in rural areas than they do in cities,” said Carol Anderson, executive director of Community Development of Morrison County. “If people move here and buy a small farmstead, they’ll come into town to sell their produce. They’ll also buy their groceries and other things they need. And if they have kids, they’ll send them to the local schools.”.

Filling a Need

While there currently are only a handful of food hubs in Minnesota, one of the leaders is Sprout, a Brainerd-based nonprofit founded by Arlene Jones, a grower who owns The Farm on St. Mathias. Jones started Sprout in 2012, when the food she grew on her farm could no longer meet the needs of the Brainerd Public Schools, where she was selling her produce as part of a farm-to-schools initiative. So she reached out to other farmers, including Amish and Latino growers, to help her satisfy the demand.

Today, Sprout sells produce and other products from 50 farmers in eight counties to large-scale customers, including school districts and regional restaurants and resorts. Sprout is currently located on Jones’ farm, although that will change once the government approves the conversion of the former Crestliner boat factory in Little Falls into Sprout’s new headquarters. When complete—a grand opening is planned for sometime around Christmas—the facility also will have a commercial kitchen, where growers can cut, chop and blend their products to make them more readily suit customers’ needs. There also will be a year-round farmers market that will sell anything from kohlrabi to pumpkins to Christmas trees, as well as locally made crafts such as quilts and jewelry.

Located in the center of Minnesota on a route that’s busy with people traveling to and from their cabins, experts hope Sprout will make a positive impact on the surrounding communities. “Food hubs have a triple bottom line,” said Cheryal Lee Hills, executive director of Region Five Development Commission, which has helped secure crucial funding for Sprout. “They improve the economy, the environment and quality of life.”

Promoting Health

On average, each fruit or vegetable purchased in the Midwest travels 1,500 miles from farm-to-plate, according to the Central Minnesota Food Hub Feasibility Study, produced in part by Happy Dancing Turtle, a Pine River nonprofit organization that promotes sustainable living. Central Minnesota has the capacity to replace a large percentage of out-of-state produce with locally grown fruits and vegetables. The shift would bring fresher food options to the region’s residents while potentially eliminating thousands of tractor trailer miles from the distribution chain, resulting in reduced carbon monoxide emissions.

Having access to fresh fruit and produce instead of heavily processed foods also can improve the region’s health and wellbeing. As part of Sprout’s partnership with the Brainerd School District, students explore food and healthy eating choices by shucking corn, sampling kohlrabi and purple carrots and serving themselves at the salad bar. “It’s an amazing opportunity for learning about nutrition, where food comes from, and how to handle it,” said Colette Pohlkamp, food service director for Brainerd School District.

In fact, improving the nutrition of low-income Central Minnesotans is a core value of food hub supporters. “We see food hubs as an important part of taking control of the food system and providing more food security,” said Jim Chamberlin, food and water security coordinator at Happy Dancing Turtle.

In Staples, the Choose Health program at Lakewood Health System is a CSA that is “prescribed” by physicians to low-income residents who qualify for the program. “The medical community is increasingly recognizing that investment in healthy choices and good diet is far more cost-effective than treating the adverse outcomes associated with poor diet,” said Hickman. Along with weekly delivery of fresh fruits and vegetables, recipients get recipes, demonstrations and educational lessons about the value of good nutrition.

That’s the kind of news that excites Barry Thoele. And that’s not just because he donates a portion of his produce to his local food shelf. “At one point I was using food shelves,” he says. “I want to pay it back.” 

 

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