Increasing food system efficiencies

Having our food and eating our food are not the same.

The fall harvest season can bring to mind the ability of U.S. farmers to produce abundant supplies of safe, wholesome foods. Additionally, shopping at the market I see aisles stacked from floor to nearly the ceiling with seemingly endless choices of food. However, let’s remember having all this food available to us does not mean we are being effective consumers.

Food loss and food waste are becoming increasingly important issues as the world’s population grows and significantly increases pressure on agricultural land and other necessary resources. Recently, USDA, Economic Research Service (ERS) researchers calculated that at the consumer level, 31% of food available for human consumption in the United States in 2010 was not eaten. At 2010 retail prices, this translates into $161.6 billion worth of food. Think of the economic and social losses from this waste. It is important to note that some food loss is unavoidable as we seek to provide an affordable, diverse, and safe food supply. Identifying how much and where food loss occurs in the food system is the first step in efforts to reduce food waste.

Between the farm and our plate - much food can be lost.

On a per person basis, 290 pounds, or 0.8 pounds per day, of food was wasted in 2010. This is valued at $371, or 9% of the $4,016 average amount spent on food per person in 2010. Meat, poultry, and fish; vegetables; and dairy products accounted for most of this annual loss.

As we consider the value of the food we have and how to adequately feed everyone, perhaps we can try to minimize the waste we generate ourselves. By more effectively utilizing the resources necessary to feed ourselves we may be able do a better job of feeding others. Awareness of the scope and sources of food loss will likely result in new government policies, enhanced food-handling practices and technologies, behavioral changes among consumers, or other actions that reduce food waste and conserve resources.

This article is based on information in: Food Availability (Per Capita) Data System, by Jeanine Bentley and Jean Buzby, writers for the USDA, Economic Research Service, and published November 2012.

Mid-Atlantic Consumer Demand for Ethnic Produce is on the Rise

Why is demand increasing for ethnic produce in the mid-Atlantic?  U.S. Census data indicates New York City, Washington DC, and Philadelphia are among the top ten cities that are majority-minority in population, meaning ethnic minorities account for more than half of the population (Census 2010). U.S. Census data also shows that the mainstream population only increased by 9.7% from 2000 to 2010 as compared to 43% for Asians and 43% for Hispanics (Census 2000, 2010). With this increase in population, there certainly would be an increased demand for ethnic produce and therefore more economic opportunities for producers, wholesalers, and retailers who grow and sell these products.  

To address this increased demand for ethnic produce, researchers at Penn State, Rutgers, the University of Florida, and the University of Massachusetts along with industry members (including farmers, retailers, wholesalers, distributors, etc) gathered earlier this year to discuss research data and trends related to ethnic crops in the mid-Atlantic at the 2014 Ethnic Greens and Herbs Workshop.  One of the projects developed by the research team was the Worldcrops.org website.  The World Crops site provides information about vegetables and herbs that can be grown in the northeastern United States. The emphasis is on crops that are popular among ethnic groups living here and can be grown here.  The site is organized by country. 

Another helpful aspect of the site is the glossary which is available in English to Spanish and vice versa.  A user can easily find the English or Spanish name for a particular type of produce as well as the genus and species of more than 350 entries.  Example 1 shows that an avocado is called an “aguacate” (Spanish), “pagua” (Mexican), or “pahua” (Mexican) and the genus and species is Persea americana.

Example 1.  Screenshot of English to Spanish glossary on Worldcrops.org.

Visitors can also find ethnic crops based on the country of origin.  In the “Go to region” box on the main page, visitors can click on a region and then select a country.  In example 2, Brazil is shown.  The language spoken is Portuguese and some of the main crops used in this country are listed including cilantro, maxixe, and okra. 

Example 2.  Screenshot of "Go to region" listing for Brazil on Worldcrops.org.

If you are an ag entrepreneur and are interested in exploring ethnic crop opportunities, it's imperative that you DO YOUR RESEARCH as you would with trying any new opportunity for your business.  Good luck!

Results from a survey on success factors for value-added dairy enterprises

by Sarah Cornelisse, Sr. Extension Associate, Dept. of Agricultural Economics, Sociology, and Education.

A Journal of Dairy Science article from 2013 reports out findings from a survey conducted by researchers at the University of Kentucky aimed at identifying "indicators of success for those considering on-farm processing."  The researchers sent out a 12 question survey to 120 value-added dairy processors across the U.S.  Thirty-one of those survey recipients responded, providing answers and comments on a range of questions, including; cash flow, products produced, information sources, and challenging aspects of starting the enterprise.

Cheese is the most popular value-added dairy product to process.

Of those who responded to the survey, 64% had been involved in their value-added processing enterprise for fewer than 10 years.  Cheese and milk were the two primary value-added dairy products.  And while 74% of farms were using milk only from their own dairy, 22% were using a combination of their own and an outside supply of milk.

An important consideration when starting a value-added enterprise is the length of time expected before you attain positive cash flow.  Of the respondents for this particular survey, the majority (32%) reached this point between 1 and 3 years after launch.  It is important to note however that while only nine percent of the respondents have been involved in on-farm processing for less than a year, 12.5% had not yet achieved positive cash flow and for another six percent, it took between five and ten years; giving weight to the fact that a value-added enterprise is not a quick solution to profitability issues for a dairy.

"Do not plan to get rich and support a dairy that is not making a profit."               - respondent advice for other farmers

Other additional findings from the survey include:

• Sources of funding to finance the value-added business primarily came from loans, personal savings, and family,
• Commodity milk price was a driving factor for the majority of respondents to start the new business, and
• Regulations, product marketing, manufacturing, and funding ranked as the top four most difficult aspects of starting the business.

When asked for advice that they would give to other dairy producers considering on-farm value-added processing, most responses fell into the following general categories (ordered by number of comments that fell into each category):

• Business planning
• Marketing research & planning
• Understanding regulations
• Time management
• Having a support system
• Entrepreneurial thinking

To end on a positive note, 97% of survey respondents indicated that they were either "extremely satisfied" or "satisfied" with their decision to start on on-farm value-added dairy enterprise.  If you are passionate about the value-added enterprise and well-researched and planned, you have increased your likelihood of success.

If you are considering a value-added dairy enterprise, our publication "Get More for Your Milk," has valuable planning information.

Margin Protection Program for Dairy Producers (MPP-Dairy)

Under the 2014 Farm Bill dairy producers now have the opportunity to participate in the Margin Protection Program for Dairy Producers or MPP-Dairy.  According to the United States Department of Agriculture Farm Service Agency’s website, “the Dairy Margin Protection Program replaces MILC and will be effective not later than September 1, 2014, through December 31, 2018.” The margin protection program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee; and (2) various levels of buy-up coverage. Catastrophic coverage provides payments to participating producers when the national dairy production margin is less than $4.00 per hundredweight (cwt). The national dairy production margin is the difference between the all-milk price and average feed costs. Producers may purchase buy-up coverage that provides payments when margins are between $4.00 and $8.00 per cwt. To participate in buy-up coverage, a producer must pay a premium that varies with the level of protection the producer elects.  

In addition, the 2014 Act creates the Dairy Product Donation Program. This program is triggered in times of low operating margins for dairy producers, and requires USDA to purchase dairy products for donation to food banks and other feeding programs.

The Penn State Dairy Extension Team and the Center for Dairy Excellence are offering information sessions across the state to help producers to answer questions on the program and walk through farm examples and the online decision tools developed by Dairy Markets and Policy members. Producers are encouraged to bring their production histories from their co-op from the years 2011, 2012 and 2013 to help determine MPP-Dairy coverage levels.

For program years 2014 and 2015, individuals must sign up between September 2 and November 28, 2014.  Now is a great opportunity to learn more about this new program before the deadline approaches.

For more information about these Farm Bill Margin Protection Program-Dairy Information Sessions and a location near you contact your local Penn State Extension Office or visit the Dairy Team’s website.