Despite increasing demand, small farms face disadvantage

March 7, 2012

Central Valley farmers focused on quality have a tough time in quantity-driven market

Jason Soares sells containers of fresh-squeezed juice from blood organges, grapefruit and more from his farm in Woodlake. Photo: Todd Brown/California Health Report

By Todd R. Brown, California Health Report

Maria Abuelas is off to a modest start as a rancher in the Sierra foothills, where she keeps a herd of about 20 grass-fed cattle on 200 acres.

“That’s my passion these days,” she said with a gleam in her eye, “growing good grass.” For ranchers in her field, alfalfa is their herd’s prime indulgence.

For generations, most American meat eaters have supped on grain-fed beef, which some of today’s connoisseurs say lacks taste and nutrition compared with the grass-fed variety.

Consumers are more and more concerned with such food production matters as supporting sustainable farming, buying from local growers and avoiding genetically modified fare. That trend encourages small-scale producers like Abuelas, who are connecting with customers alarmed by bioengineered foods making their way to the table and who pine for a more time-honored approach to their sustenance.

Yet for the most part, food distribution remains dominated by quantity-driven corporations, and some small farmers in the Central Valley struggle with a food system controlled by a few distributors and dominated by larger-scale producers who are jumping on the green bandwagon for a piece of the $30 billion industry.

“Voting with your fork or voting with your dollar is beginning to take shape,” said Adam Scow, the California Campaigns Director for Food & Water Watch, a national nonprofit that pushes for consumer awareness of conservation and food safety issues.

But that does not mean small producers will find a mass market for their products. In the case of producers like Abuelas, artisanal supply and cultivated demand do not meet at well-stocked shelves at the supermarket. Instead, she meets her customers face-to-face to extol the benefits of her farming philosophy at the Vineyard Farmers Market in Fresno.

Despite such meetings between buyers and sellers at the market, one of many such venues in Fresno, California’s unofficial agriculture capital, getting their wares distributed and consumed remains a hurdle for small farmers.

Abuelas said she drives three hours from her Coarsegold ranch to the coast to a USDA-approved processor to turn cow into steak. She could use a bigger plant closer by, but said she worries about turning her carefully raised beef over to an operation that handles such volume in a world where fast food burgers might contain meat from a hundred cows.

“If I took my animals there, who knows what I’d get back?” she said.

Dairy farmers, cattle ranchers say they feel the squeeze

The Central Valley cradles one of world’s the most fecund agricultural zones, a $37.5 billion farming economy. The region’s exceptionally diverse productivity, crooked between the metropolises of the coast and the splendor of the Sierras, stems from an industrial-scale approach to farming that transforms vast swaths of land into alfalfa, grape, almond and tomato havens, among other offerings.

Up the production scale and away from the face-to-face exchanges at city farmers markets, dairyman Joaquin Contente faces a pipeline pinch that can put the squeeze on his profit.

A partner with his brother in Contente & Co. in Hanford, an 800-cow operation that churns out milk for the Land O’ Lakes plant in Tulare, he also is president of the California Farmers Union, with 1,400 members.

While catering to the natural food trend can help a small or middling farmer’s bottom line, a more basic problem for California’s multitude of dairies — organized into cooperatives — is that a handful of processors ultimately control the market, said dairyman Contente. Photo: vpickering/Flickr

While catering to the natural food trend can help a small or middling farmer’s bottom line, a more basic problem for California’s multitude of dairies — organized into cooperatives — is that a handful of processors ultimately control the market, Contente said.

Contente said he chooses to farm “borderline organic” because of the laborious rigors and expenses that goes into certified, wholly organic production. “I don’t use Roundup Ready alfalfa seed, or a lot of insecticide. I may use an herbicide for a certain weed,” he said.

He nets a small payment for certifying that his product is made without Bovine Growth Hormone treatments, something consumers have broadly demanded.

But Contente’s efforts to improve quality don’t improve his bottom line much in a market that rewards quantity more than quality, he said.

“The large processors and marketers, they’re larger than the co-ops themselves,” he said. “They’ve got a tremendous amount of market power.”

Scow, with Food & Water Watch, said about 40 percent of a dollar spent on food at the grocery store went back to the farmers who produced the goods in the 1960s. Today, with the dominance of fewer chain retailers and giant processors, that figure is closer to 19 percent, a profit shift to the middleman that has pressured small and mid-size farms.

Scow said his group is working to raise the price that dairies receive for milk, which has lagged inflation through the decades, as part of the 2012 Farm Bill.

“We have a food system that is very much geared toward producing as much as possible … which has put some farmers out of business,” Scow said.

Scow pointed to titanic processors such as Cargill, Conagra, Farmland Foods and Tyson that together handle 80% of beef packing as a potential antitrust concern that illustrates the change.

“They have enormous control. This has been a huge detriment to cattle ranchers,” he said.

A similarly narrow production channel exists for dairy products, dairy farmer Contente said. Nearly a quarter of milk for cheese, butter, protein powder, fluid and other dairy varieties for the U.S. comes from California and funnels through a very narrow production channel.

“When 20 percent of the nation’s milk winds up in the hands of three or four major players,” Contente said, “you can see why fifteen hundred dairymen can’t get a fair shake.”

For most of 2009, the price paid to dairy producers was well below what most farmers say they need to make a profit. That, coupled with a jump in feed costs, evaporated life savings and forced many producers out of business. The National Family Farm Coalition said the nation lost 7,000 dairies in recent years.

In the Central Valley, hundreds of dairy producers — some in business for generations — went bankrupt as expenses outstripped profits and banks held off making risky loans. At the same time, some smaller producers that have focused on selling premium, organic milk for the retail market have done better than survive the carnage.

Yet while those producers sell their wares for a premium, their higher production costs still squeeze profits thin, Contente said.

The food system’s big enough for all, processors say

At the top of the food production scale, multinational corporation Cargill bought Fresno’s former Beef Packers Inc. site about six years ago and now operates a 60-acre processing plant there, with a thousand employees handling up to 1,800 head of cattle a day.

“At Cargill we’re dealing in scale,” said Mike Martin, spokesman for the company based in Wichita, Kansas, in the traditional heartland of cattle ranching. “We’re producing a large volume to feed the majority of people. It’s easy to talk about sustainability, but what framework are we talking about? Our point of view is, there’s room for all points of view.”

He said his company — the second largest beef, third largest turkey and fourth largest pork maker in the country — is a founding member of the Global Roundtable for Sustainable Beef, which includes food giants such as Cargill, as well as such groups as the World Wildlife Fund and retailers like Walmart.

“They’re products our families eat as well," said Cargill spokesman Mike Martin. “We take this very personally.”Photo: NDSUagcomm/Flickr

All calves start out on a forage-based diet and, for Cargill’s purposes, only move to a grain-based feedlot for the second half of their lives. The purpose is to add “marbling” to the product, interlacing muscle with fat to give the meat a richer taste over leaner cuts from primarily grass-fed cattle.

Then there is hormone treatment. He said BGH is approved by the U.S. Food and Drug Administration and that dairy cows, which Cargill uses at their end of life for beef production, are treated with estrogen to produce milk, although that concerns a number of scientists who study hormone-dependent cancers.

He said the debate over meat — grass-fed, organic, hormone treated and so on — reminds him of when he worked in the soft drink industry and promoted a product that was “colored sugared water and the added bonus of high fructose corn syrup.“

He noted, “You might as well put a skull and crossbones on the can, the way people think about it.”

“While we are a large-scale processor, we still care very much about the quality of the product, the safety of the product, how the animals are treated with dignity and respect, as well as being a vibrant part of the community,” he said. “We care about the workers in the community, whether we produce hamburger patties or eggs or salt or cocoa.”

Will small farmers blossom?

Back at the Vineyard Farmers Market, under its signature canopy of wine grape and rose vines that gives the institution its name, John Warner discusses with his own style of eagerness how he thinks taste and nutrition differ in his products from standardized, mass-produced fare at the grocery store.

He inhabits a niche that some ag experts call microfarming, where a farmer works five acres or less of land, often for subsistence rather than for retail income. In the Fresno area, they typically are Hmong émigrés, though a growing number of backyard gardeners, urban farmers and others qualify for the definition.

In the mid-’90s, Warner and his father turned about two acres in Madera County into a bountiful clearinghouse for flowers — Icelandic poppies, Shasta daisies, edible nasturtiums and so on — and a variety of seasonal greens, lemons, cage-free eggs and whatever other “experiments” the family venture got to grow.

He is an acolyte of no-till land use, where piling mulch on the soil helps prevent certain weeds from building up while inhibiting erosion.

He boasts of providing “plug trays” of budding vegetables to other sellers at the market, who sometimes wander over to the Flower Garden of Madera table to ask Warner, “What are these?” in order to relay the information to their own customers.

And he considers the family operation, now formally titled Whole Systems Agriculture, “beyond organic,” noting, “I just don’t pay for the name.”

At the supermarket, a “certified organic” label means the produce in question adheres to USDA regulations, an extra cost of doing business that microfarmers and other small-scale producers may eschew in favor of becoming personally acquainted with their customers.

Such fluid use of the trendy term cuts both ways though, with consumers forced to be on guard against potential imposters who promote their wares as organic, or calling their goods freshly farm picked when they might have been sneakily repurposed from a discount wholesaler’s shelves.

“It’s sort of obvious when you start seeing bananas and pineapples,” Warner said.

John Warner's variously colored "heritage eggs" sell for $6 a dozen but come from free-range, organically fed chickens that he believes imbue the product with particularly nutritious properties. "An egg is not an egg," he says, contrasting his product with the mass-produced bounty flooding grocery store shelves. Photo: Todd Brown/California Health Report

His table at the market, and his business advertised online via Craig’s List, seems to have struck a chord recently by raising pullets — young hens for egg production –which he said can be compared with the trend in heirloom tomatoes and other fruits and vegetables made from older seed stock.

 

Although organic, sustainable produce costs much more than mass-produced fare, he argued that taste and nutritional value is the benefit of the tradeoff.

“There’s more flavor in an heirloom tomato, but you don’t get as many, and they’re ugly and they crack and they leak down. It’s hard to bring the heirlooms into the store,” Warner said. “So you don’t sell a lot. But the people who buy them, they get it. They know what goes into that.”

Scow said the slow but steady push toward healthier, more local farming is a major shift from the quantity-driven production model that is facing a possibly historic challenge.

A Fresno high school graduate himself, he now works at his nonprofit’s San Francisco office and has seen the scope of the change, over time and across the land, first hand.

“The Bay Area is unique in the country, a mecca, a hub for organic farming,” he said. “It’s more pronounced in certain parts of the country, but organic farmers are making more money and consuming a larger percentage of the market.”

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One Response to Despite increasing demand, small farms face disadvantage

  1. Ermintrude

    March 8, 2012 at 9:02 am

    Small farms are offered little opportunity to fend for themselves other than Craigslist and Home Grown Cow as free Internet sales channels. Other Internet sites often charge farmers listing fees and the farmer may not find a buyer to cover the cost let alone profit from the listing. The demand for shorter supply chains is growing. We hope farmers find the marketing help they need fast enough to keep them afloat.

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