Buying Food Fresh from the Farm

Small farmers are finding a growing number of consumers hungry to buy meat, milk, and vegetables straight from the source

by David E. Gumpert

Kathy Barrett wasn't in a very good mood, she told me. She had just trucked a steer to a local slaughterhouse in neighboring Vermont that morning. "But isn't that your job, as an owner of On the River Farm, to raise cattle and have them turned into beef?" I asked.

"Yes, but that doesn't mean I have to feel good about it. I raised that steer with lots of love, and now I feel bad about it," she said.

Her mood improved as the conversation went on, especially as she explained to me how much more lucrative it has been over the last couple of years to sell her beef directly to consumers, at $5 to $14 a pound, vs. approximately half that at a local distribution company, which also has a nasty habit of not paying her on time.

It turns out that being able to improve her margins so significantly is suddenly making farming look attractive again for the 51-year-old, after it faded from the family during her father's generation. Her grandfather ran the 17 scenic acres along the Connecticut River, outside Lyme, N.H., mostly as a dairy farm.

Two Trends

Around New Hampshire and Vermont, and, indeed, around the country, there seem to be many more farmers like Kathy Barrett. The media are full of stories about the growing popularity of farmers' markets, community supported agriculture (where consumers buy shares in return for regular crop deliveries), grass-fed beef, free-range chicken, and raw milk (see BusinessWeek.com, 11/27/06,"A Raw-Milk Raid Leads to a Special Thanksgiving").

But the big story, from the viewpoint of small-business opportunity, is that direct-to-consumer farming offers financial growth opportunities based on a collision of two trends: First, there's the desire by owners of established farms, many of whom had taken off-farm jobs or been reduced to subsistence levels by commodity-price fluctuations, to make their farms financially attractive. Second, there's the fact that a growing number of consumers, restaurants, and food-service businesses want to purchase locally-grown food, free of the pesticides and hormones that are part of the global marketplace—ideally directly from the people who produce it (see BusinessWeek.com, 12/20/06, "Whole Foods and the Celebrity Farmer").

Vital Communities, a nonprofit organization that encourages local agriculture in central New Hampshire and Vermont, has 200 direct-to-consumer farms listed on its Web site, www.vitalcommunities.org, which consumers can search by location and product. Lisa Johnson, director of the organization's Valley Food & Farm program, estimates that another 200 farms not yet identified by the program are also selling directly to consumers.

Out to Pasture

One of the organization's major accomplishments has been convincing Dartmouth College's dining service to purchase meat and produce directly from a handful of its farmers. The service, in 2004 and 2005, purchased more than $400,000 of locally grown food via wholesalers, and this year has switched to purchasing the food directly from individual farms.

Last August, when Vital Communities organized its first "Feast in the Field"—a white-tablecloth dinner in a Vermont farm field featuring salads, chicken, potatoes, and apple cider from local farmers—more than 300 people showed up to pay $35 a person to support the organization's efforts (see BusinessWeek.com, 12/11/06, "What Entrepreneurs Need to Know").

As part of its transition to selling direct, Cloudland Farm of Pomfret, Vt., was able to convince Vermont Law School's dining service to purchase its beef direct from the farm. The farm is now in its second year of selling directly to consumers and dining services, after a dozen years of "being at the mercy of the commodity beef market," in the words of Cathy Emmons, who owns the farm with her husband. And she says it's moving very close to break-even.