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BusINess » Business » Illinois farmers can cash in on millions as schools and restaurants demand local produce

Illinois farmers can cash in on millions as schools and restaurants demand local produce

The demand for Illinois fruits and vegetables far outstrips the supply, and local farmers could profit from increasing production in order to meet the wholesale need. (Photograph by Katherine Sacks/Medill.)

The demand for Illinois fruits and vegetables far outstrips the supply, and local farmers could profit from increasing production in order to meet the wholesale need.
(Photograph by Katherine Sacks/Medill.)

Sweet corn, peaches and lettuce fill the farmers markets and plates at family dinners. But Illinois farmers have a much larger market at their doorstep.

Local wholesale buyers are willing to spend at least $23 million annually in Illinois grown fruits and vegetables, according to a new report funded by the Illinois Department of Agriculture and published by familyfarmed.org, a non-profit Chicago advocate of local farms.

This number—calculated by surveying just 14 buyers including Whole Foods Markets, Chipotle, and US Foods—reflects only a small number of the potential buying power in local food production. Ready to Grow: A Plan for Increasing Illinois Fruits and Vegetables Production explains the opportunity smaller Illinois farmers have in marketing locally grown foods and suggests several clear steps to make this happen.

About 75 percent of Illinois land is used for farming, according to data from the Farmland Information Center. Yet, most of the agriculture in the state involves large-scale farms primarily focused on one commodity crop, such as corn and soybeans. The crops are not meant for consumption, but instead are converted into other products—ethanol, plastics, or animal feed.

Area farmers made a huge transition away from fruit and vegetable production over the past 50 to 60 years and the agriculture of the area shifted to corn and beans, according to Jim Slama, president of familyfarmed.org and project director for the report. This led to a shortage of fresh, local food, sending wholesale buyers elsewhere—to states as far away as California and Florida, he said.

In the past, “commodity pricing of fruits and vegetables made it very difficult [to compete] with warm weather farmers,” said Slama. But the picture has changed. “Transportation costs being what they are, consumer and trade buyers all want local food, which is opening up the market, particularly in Illinois,” he said. That means opportunity for family farms to connect with the wholesale market, according to the report.

Chartwells-Thompson Hospitality, the major food service provider for Chicago Public Schools, has already increased its contract for Illinois fresh and frozen fruits and vegetables by $500,000. This leads to a combined annual spending of $2.3 million in local farm products.

“We want apples, peaches, peas, broccoli, beans, potatoes, and other fruits and vegetables grown by Illinois farmers to serve nearly 305,000 students in 481 schools every day,” said Bob Bloomer, regional vice president for Chartwells-Thompson in a statement. “This is good for local farmers and great for Chicago students.”

And there are more profits to be made in this local sector. A 2010 study by the Leopold Center for Sustainable Agriculture at Iowa State University showed that Illinois’ current consumption of 28 types of fruits and vegetables provides 2,600 farm-level jobs and more than $264 million in farm sales. Yet most of this produce comes from outside the state. By growing more fruits and vegetables in Illinois, these economic profits could be transplanted here, Slama said.

“If the prices are good for fruits and vegetables,” said Slama, “potentially they can make a significantly higher gross revenue and profits per acre.”

Irv & Shelly’s Fresh Picks, a home delivery business that supplies local and organic products to the Chicago area, can find enough local produce for about half the year during the peak-growing season, according to owner Irv Cernuaskas.

However, Cernuaskas is quick to point out, “that’s just for my business. I’m not reaching every Chicago area. There is certainly not enough local food to supply all the people in Chicago who might want it.”

Even with Fresh Picks’ current capability, the company, which participated in the familyfarmed.org research, has suggested it could spend an additional $250,000 in local purchases. “Our total purchases in local food in 2009 was $600,000,” said Cernuaskas. “That $250,000 refers to additional purchases we could make” if Illinois produce were available.

A compilation of six months of research, Ready to Grow involved interviews with 14 buyers and 20 growers and surveyed 181 area farmers. Participating buyers in the report include a mixture of institutional buyers, grocery stores, and wholesale sellers including companies ranging from SYSCO, US Foods, Whole Foods Market, Goodness Greenness, Chipotle, and Chartwells-Thompson Hospitality (serving Chicago Public Schools).

Combined, the 14 companies have suggested that, if additional local produce were available, they would be interested in spending a total of $23 million. The demand, taking into consideration all the wholesale buyers in Illinois, is likely to be exponentially greater.

“When looking at our abilities to produce healthy food stuff,” said Tom Jennings, director of the Illinois Department of Agriculture, “no matter how much you appreciate the bounty of Illinois crops, you can always do a much better job.”

By polling area farmers, the report concluded that marketing, processing and distribution capacity and concern about actually selling the produce are the key problems farmers have in increasing production of local, fresh food.

“There are the direct, small scale farms that serve farmers markets and small town stores,” said Dave Bishop, owner of PrairiErth Farm, a participating 300-acre family farm in central Illinois. “Then you get into food service, hospitals, etc, and you have to mechanize. That person isn’t here because the infrastructure to handle the produce doesn’t exist.”

Familyfarmed.org offers several suggestions to increase local production, including the development of regional packaging and distribution warehouses, which would give small farmers access into this industry.

“If you have a [local] packing house, then you have an infrastructure and then you can really supply these businesses,” said Slama. “I think in maybe two years we could have something up and running.”

He said the next step for familyfarmed.org, working with the Illinois Department of Agriculture, is to create a business plan for the development of regional packing houses to serve different parts of the state. Meanwhile, farmers market programs in the state have expanded from 85 three years ago to 300 this year and will continue to grow, said Jennings.

“People are wanting to source their food, they want to know where it comes from,” said Jennings. “Quality is more expensive than quantity, so people are willing to pay more for quality if they know where it comes from. Anything we can do to get a share of that large piece of the pie is only going to be a boom for this area of the community.”

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