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Food Hub Report Series Launched by USDA

July 17, 2015

Filling a gap in information on operations and best practices from food hubs, the U.S. Department of Agriculture Rural Development mission area launched a new technical report series called Running a Food Hub with the first report, Running a Food Hub: Lessons Learned from the Field, Vol. One (hereafter Lessons Learned) on July 15.

Yesterday’s release of the report series, developed in partnership with Virginia Foundation for Agriculture, Innovation and Rural Sustainability (VA FAIRS) and Matson Consulting, highlights issues food hubs should consider in starting or expanding a food hub and provides operational profiles from 11 successful food hubs around the country.

The publication of the report followed by a day the release of the Wallace Center et. al.’s COUNTING VALUES: Food Hub Financial Benchmarking Study that we profiled yesterday.

Lessons Learned covers the following areas in food hub operations: Customers, Labor, Products, Operations, Food Safety Certifications, Transportation, Infrastructure, Software, Viability and Success, and Common Ground.

Food hubs featured in the report range in size from 1 full-time employee (FTE) with a few seasonal and/or part-time employees (PTE) to 22 FTEs and PTEs and work with between 12 to 700 producers. The hubs, the majority of which were developed within the past 10 years, are a mixture of cooperatives, nonprofits, S-Corporations (a special type of corporation in which shareholders are taxed rather than the business itself) and an LLC (limited liability corporation), with sales ranging from $60,000 to $5.5 million.

The report offers practical advice, such as recommending a diversity of products and creating operational advantages through partnerships or existing infrastructure in a region, as well as featuring characteristics common to the featured food hubs, such as approaches to infrastructure, and issues important to the longevity of food hubs, such as food safety practices and certification.

Among the successful food hubs featured in its profiles section are:

  • La Montanita Co-op Distribution Center, which uses a cooperative model and has been serving New Mexico from its Albuquerque location since 2007. Originally a coop grocery chain started in 1976, La Montanita has since expanded into a food hub, known as the Cooperative Distribution Center (CDC), that sources more than 1,100 products from almost 700 local producers. Its customers include its own stores, the Whole Foods grocery chain, local natural grocery stores, schools, and universities. The CDC operates with minimal grant or foundation funding, with sales from the CDC exceeding $5.5 million for fiscal year 2014.
  • Nashville Grown, which uses a non-profit model and was launched in 2013 to primarily connect local growers with restaurants in the Nashville area. The food hub primarily sells fruits and vegetables, as well as some eggs and grains. One unique feature of this food hub is its willingness to work with backyard gardeners, who may over-produce a certain item that they would like to market. Product is picked up from among a rotating group of 54 producers (both full-time farmers and backyard gardeners) for immediate distribution among the hub’s 64 wholesale customers. Having very little of its own infrastructure, the hub does not do any additional processing or cleaning of product when assembling orders. However, plans are underway for the food hub to acquire a refrigerated truck, commercial coolers, and to lease a warehouse facility.
  • This Old Farm, started in 2009 in Darlington, Indiana, uses an S-corporation model to serve its mostly wholesale customers local meats, produce, and value-added products. Originally a farm, the food hub has grown over time to also include a USDA-inspected meat processing facility. The food hub oversees the processing of all the meat sold through it to ensure humane, clean handling of all meat products and consistent meat quality. The food hub owns two trucks and handles deliveries for non-local sales by contracting with less-than-truckload (LTL) carriers and works with a regional produce company to arrange backhauling.

To learn more about these and other feature food hubs’ operations and growth through the years, see Running a Food Hub, Lessons Learned from the Field, Vol. One.

Over the past several years, USDA has been promoting food hubs and other local food businesses and infrastructure through similar reports, along with other information and resources (including access to capital). A description of hundreds of local and regional food system projects supported, in part, through USDA programs between 2009 and 2014 can be found in the Know Your Farmer, Know Your Food Compass, which we reported earlier this month as having been revised and re-released at the end of June.

For information on federal programs that can assist the development of food hubs and other participants in the local and regional food economy, see NSAC’s Grassroots Guide to Federal Farm and Food Programs.

Categories: Beginning and Minority Farmers, Farm Bill, Local & Regional Food Systems, Rural Development

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