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Wisconsin Food Hub Cooperative organizes

April 18, 2013 | 0 comments

WAUNAKEE

Fresh market vegetable growers from Waupaca to Rock County, from Spring Green to Dodge County now have a new resource for getting that produce to market.

The Wisconsin Food Hub Cooperative has officially been organized with members gathering in Waunakee last week to elect officers, meet new General Manager Lynn Olson and kick off their programs.

For now the Food Hub Cooperative includes 12 farmers but the plan is to have 15-20 by the end of the year.

If all goes well, the model that developed this new co-op could spread to other parts of the state.

Sarah Lloyd, one of the new co-op’s officers, said that the idea was to organize it in a way that would give small and medium-sized producers access to larger markets.

Several large food buyers were at the April 10 organizational meeting in Waunakee to vouch for their interest in buying local produce – something that customers want and that is good for the their business’s bottom line.

Olson said that matching Wisconsin farmers’ varied production styles with the appropriate markets and aggregating their produce to meet the larger volume requirements of intermediate buyers such as grocery stores, restaurants, schools and hospitals is what this co-op will be all about.

The business will limit up-front risks for its farmers by providing sales, marketing and logistic services for commodity-type produce – things like potatoes and sweet corn – as well as specialty produce, meats, cheese and value-added products, she added.

Wisconsin Farmers Union is a key partner in the development of the Food Hub Cooperative. Tom Quinn, executive director of WFU said the project really fits with several missions of Farmers Union – cooperative development and getting farmers a price for their product.

Local and regional food systems are also of vital interest to Farmers Union members, he said, and development of this cooperative fits right in.

"About a year and a half ago the Wisconsin Farmers Union board decided there was lots of opportunity out in the agriculture sector for cooperative development and they decided to invest dollars and staff time in this project," Quinn said.

The project worked from a Dane County Economic Development Corporation survey that found there was a need for some kind of business that would aggregate locally grown produce and find markets for it.

Farmers Union stepped in with resources to help produce a business plan for the fledgling business and pulled together a steering committee of growers who held lots of meetings to get the project off the ground. Those involved decided the business should be organized as a cooperative.

"Our role was to provide up-front equity and key staff support," Quinn said, but he adds that the project would never have gotten where it is without the passionate work done by the farmers. "They put their skill set to work."

Mark Olson, who owns Renaissance Farm, Inc. near Spring Green, said the original business plan involved setting up a packing-house facility where produce could be brought in, washed, packed and shipped out to buyers. He and other growers thought the $2 million price tag was a bit too high.

"We reworked that monster business plan, reached out to another set of growers and found that the market for ‘local’ had broadened," he said. "We did buyer interviews and found huge opportunities for value-added and minimally processed food as well."

He said the group had selected Olson as general manager from a slate of 14-18 candidates. (One person from New Zealand applied for the job.)

In addition to hiring Olson away from the Willy Street Co-op in Madison, they have also hired a full-time sales person who will start soon.

General Manager Lynn Olson (no relation to Mark Olson) has only been on the job for a couple of weeks.

Instead of investing in the costly aggregation facility, the co-op will now look for other ways to aggregate and sell the produce, said Lloyd and the new sales manager will look for logistics and sales efficiency and strategic opportunities.

 

FSA LOANS

Ray Ellenberger from the USDA’s Farm Service Agency was at last week’s meeting. He told the group of farmers that he was "so excited about what’s going on" and that the new micro-loan program at FSA, which is designed for smaller farm operations and beginning farmers, would be perfect for members of this organization.

The micro loans can be used to purchase stock in a cooperative, he added.

Ellenberger said the huge population base in southern Wisconsin, which has an interest in local food, is a great opportunity and is only growing. "We want to be very actively involved in what you’re doing."

Grower Mark Olson said that sentiment has been echoed by a number of participants as the new co-op took root. "The market has been coming together, the support has been there. It’s been completely amazing that it has all come together all at the same time.

"It’s been a real wonderful experience and the idea of ‘let’s make this work’ has been really exciting."

Olson said he’s looking forward to allowing the Food Hub to take over tasks like gaining his farm access to markets he couldn’t get into alone so he can concentrate on doing what he likes to do – growing food.

"Now I won’t have to be an account executive, sales person, marketer, logistics coordinator and a farmer."

One of the ideas that has been kicked around as farmers met to organize is year-round production – something the buyers at last week’s meeting would welcome. The food wholesalers and retailers said they would expand their notion of "local" if it meant that they could use those products instead of products from Mexico or South America, which are far less "local."

Mark Olson said some growers here are using season-extending methods like hoop houses and greenhouses to get closer to all-year production.

"Dane County Farmers Market started with just a few growers and now there’s a waiting list to get in," he said. "If there’s a market, farmers will definitely step in."

Quinn said that if this project goes as planned it could end up being a statewide project. If other groups of growers want to follow the lead of this co-op, they could follow the blueprint fine-tuned by this group, he added, so they don’t need to make their own mistakes.

Lynn Olson said the new co-op owes much to the entities that helped get it off the ground – Dane County Economic Development Corporation, Dane County Executive Joe Parisi and Laura Witzling all supported the project for the past several years along with Dane County UW-Extension and the USDA’s Rural Development Center.

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