Volume 43 Number 3 Fall 1996
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Produce
it, and they will come???
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John L. Adrian, Stephen L.
Kiser, and Stephen R. Frazier
When an other-worldly voice commanded Kevin Costner to “Build it, and they will come,” he was rewarded with his Field of Dreams. Unfortunately, no such optimistic spirit has communicated with Alabama's fruit and vegetable producers. If one did, it might say, Produce it, but they may not come. In reality, a frequently heard comment among produce growers is, We can grow it, but we can't sell it. Recent efforts by AAES economists have attempted to evaluate this professed dilemma and provide some insight into the problem. Their study indicated that future growth of Alabama's commercial fruit and vegetable sector will be greatly influenced by better coordination between growers and marketers and better information about requirements to access commercial markets. Researchers interviewed 42 marketers and 64 growers from throughout the state to determine their role in and opinions of the fruit and vegetable system. A major goal was to determine and evaluate differences and compatibilities between produce growers and marketers in Alabama. About three-fourths of the fresh-produce purchasing firms contacted were retailers, while the balance was cqually represented by wholesalers and brokers. About two-thirds of these firms were sole proprietorships, while 21% and 14% were corporations and partnerships, respectively. Most of these firms (92%) handled locally grown produce, and they indicated general satisfaction with the experience. Brokers tended to handle cabbage, potatoes, tomatoes, and watermelons most frequently. Tomatoes, apples, peaches, potatoes, sweet corn, and watermelons were most important to retailers. Retailers want fresh, clean, appropriately packaged, and vine-ripe products from local growers. Although retailers started a desire to sell more locally grown products, they indicated that some local producers would have difficulty meeting fairly rigid market requirements and conditions. Several considerations that influence the marketers' willingness and ability to purchase locally grown crops were identified. Top-quality produce was the strongest factor. Of secondary importance was access to an adequate volume of products. Retailers stated that producers generally could not provide a dependable level of supply for a sustained period; one or two deliveries were generally not adequate to establish an account with a grower. Another consideration was the retailers' hesitation to interrupt or decrease the flow of product from normal channels. Loss of “good will” with present suppliers could adversely affect future product flows to the firm. Even with these recognized difficulties, retailers believed that local producers could favorably market their products through retail outlets or their assembly/distribution facilities in the future. Produce growers had averages of 31 years experience as farmers and 27 years as fruit and vegetable growers. Farm size ranged from three to 1,900 acres, with an average of 135 acres. Fruit acreage ranged from one to 180 acres, with an average of 49 acres. Vegetable acreage ranged one to 600 acres, with an average of 71 acres. Those growers producing strawberries and tomatoes on plastic averaged 6.1 and 5.1 acres, respectively. Half of the 64 farmers had some form of irrigation.
About two-thirds of the producers reported a strong preference for direct markets: 57% sold through farmers markets, and 31% used roadside stands or pick-your-own operations. Four percent used brokers, while 3% sold through wholesalers/retailers. More than half the identified buyers (53%) were located in the Birmingham market; Montgomery and Dothan markets were each the cited destinations for 6% of the growers. Average distance traveled to market was 73 miles. The primary reason growers chose a particular outlet was convenience (53%). Other reasons noted for selecting a particular market were: only market available (18%), owner of retail outlet (7%), large volume required to use the market (6%), repeat sales (5%), and better prices (3%). The top-two problems associated with markets used were insufficient buyers and low price. Fifty-four percent of producers stated that the price paid for their produce was unsatisfactory. Weather (34%), low selling price (26%), and availability of capital (13%) were primary factors identified by growers as limiting their production. When questioned about the availability of on farm facilities, all producers indicated capability for grading; 86% had storage facilities; 84% had packing facilities; and 30% had cooling facilities. Growers were questioned about the future of their operations. Twenty percent felt very good about the future, while 68% expected a good future, and 6% were not optimistic. Two percent said they plan to quit farming. Others felt there was insufficient reward for their effort but planned to continue farming because that was their only skill. In conclusion, firms are interested in handling locally grown produce, but they want it on a basis consistent with normal market standards. Basically, retailers or their assembly/distribution units can operate without local produce. But under appropriate conditions, their business could be enhanced by availability of good-quality local crops. In fact, some retailers explicitly promote locally grown items. Retailers desire stability in product flow or, at least, sufficient lead time to promote items that are readily available. Alabama produce growers are primarily oriented toward direct markets, which seem to become saturated with products during the primary production season, resulting in low prices and unsold products. Nevertheless, several viable direct markets exist in Alabama. And some producers are effectively accessing commercial outlets with such items as watermelons, bell pepper, green beans, tomatoes, greens, and apples. Unfortunately, many others lack sufficient volume of quality produce to access commercial outlets. Also, producers often have facilities insufficient to maintain produce quality or package it appropriately. Post-harvest produce handling is often as important as production methods in determining the quality of a product and shelf life.
Future growth of the fruit and vegetable industry will depend on better coordination between growers and marketers. Coordination can be improved through contracting, cooperative organizations, and leadership by key individuals throughout the state. Presently, much produce is planted and grown without detailed early consideration of potential markets. Improved coordination would facilitate interaction among participants and the orderly flow of products on a timely basis. Alabama growers need to understand that the commercial produce system can exist without them. However, growers will have difficulty moving volume without the commercial outlets. If growers can help brokers, wholesalers, and retailers be profitable, they will enhance their chances for success in the commercial sector. Adrian is a Professor; Kiser is a Research Assistant, and Frazier is a former Graduate Research Assistant in Agricultrual Economics and Rural Sociology. |
