North Dakota study declares growing, selling local produce a chicken-and-egg issue

Each fall, Scott Berg handpicks thousands of watermelons, cantaloupes and ears of corn. The produce is the result of seeds he painstakingly planted in the spring in small containers in his greenhouse, then transplanted by hand after the ground warmed.

After the harvest, the Grafton, N.D., grower hauls the produce in his pickup truck to local grocery stores and farmers markets. In between planting and harvest, Berg waters, cultivates and hand-weeds the melons and corn.

It amounts to weeks of physical work for growers who market their produce locally. And after the harvest comes the business side of the industry: Developing relationships with customers, such as grocery store produce managers, who buy the vegetables and fruit.

“I enjoy it,” Berg said. “I like being able to plant something in the soil, nurture it, watch it grow, and take what grows and turn it into a bit of profit.”

Figuring out how to make it more profitable for local producers – while keeping it affordable for buyers – is one of the challenges facing the local foods industry. A new study, the “Northeast North Dakota Local Foods Through Cooperation Feasibility Study,” looks at those issues, surveying producers and buyers in 10 counties, including Nelson, Pembina, Pierce, Ramsey, Rolette and Walsh.

There are 12 farmers markets and 16 local food producers selling a variety of goods – from jams and jellies, to baked goods, vegetables and fruit – in the feasibility study area, according to the North Dakota Department of Agriculture. Vegetables make up the majority of the locally produced food.

Released Dec. 31, the study – compiled by the Northern Plains Resource Conservation and Development Council – concluded that demand for most local food far outweighs supply. That means opportunity for would-be producers. However, a way to unite buyers and sellers so that the market can be developed more fully hasn’t yet been determined, the study said.

“One of the challenges in developing local markets in any region is a chicken-and-egg issue: Which comes first, the markets to sell the foods or the producers to provide it?” the study results noted.

Demand typically develops through local farmers markets, which are the impetus for some producers to expand the type and volume of goods they make and grow, the study said.

Joellen Gilje, who raises beef on her farm near Rolette, N.D., surveyed 44 producers from 20 communities across the 10 counties for the study. She attended farmers markets in towns like Walhalla, Grafton, Devils Lake and Langdon during summer 2019.

“The producers are mainly selling at farmers markets directly from the farm,” Gilje said.

One of the challenges is retaining customers, said Heather Szklarski, who heads the Grafton Farmers Market.

“I think it’s really hard to get people to take the time to come and shop,” she said.

Because the produce ripens at different times, it’s also difficult to keep customers coming back, she said. That means farmers markets have to get creative with their own sales while also creating ancillary amenities – usually activities – to draw customers to events.

For their part, she and her husband discovered that selling “subscription boxes” of produce iss the best way to market their vegetables.

“That way everything you grow is sold,” Szklarski said.

The Szklarskis took a break from growing and selling vegetables, pork, eggs and chicken when they had children. The two want to spend more time with their children, and hiring to have the produce work done is not a cost-effective option.

Besides farmers markets and direct sales to consumers, some of the producers surveyed in the feasibility study also marketed their products through local food hubs, which connected them to larger markets. A few sold to schools, Gilje said.

“The bottom line for the buyers (was) it had to be profitable. It had to be priced right,” she said.

Farmers markets are a good outlet for Berg’s produce. Because he picks melons and corn every day but the markets generally are held just once a week, he also sells his melons and corn to a couple of local grocery stores.

Berg, who has been raising melons and sweet corn on five acres near Grafton since 1981, has developed a good working relationship with produce managers at the grocery stores, and that helps him when it comes to marketing his crops, he said. He also makes sure he sells quality produce.

Meanwhile, Berg keeps in mind that the wholesalers also are in the business to make a profit.

“You have to look at the wholesalers’ viewpoint, too. I always have the statement ‘I have to make a little money,'” Berg said.

Berg has been in a position to expand his operation many times over the 39 years he’s been in the business, but has opted not to because of market uncertainty. For example, wholesalers might change their buying decisions or competitors might start selling the same produce he does and undercut his prices, Berg said.

Most producers surveyed in the feasibility study indicated they didn’t want to expand their operations because of limited workforce access and because rules and regulations make it difficult to profitably produce the food, Gilje said.

“It’s very labor intensive,” Berg said. “It’s getting harder to find help, so obviously you have to pay help more.”

Berg typically has one employee who works throughout the summer. He hires extra help during harvest. However, he has never depended on his produce business as his main source of income. He had a full-time job as a pastor, and now is retired, so the produce sales always have been supplemental income.

Producers have to receive more than $4 an hour for their work – which includes planting, weeding, picking and marketing fresh produce – before the number of local food producers will grow, said Paul Overby, a Wolford, N.D., farmer who owns a home-based business called Verdi-Plus.

It simply has to become more economically viable to produce local goods, Overby said. He believes figuring out how to make it profitable for rural residents to market locally grown food could both provide an economic boost to rural communities and give consumers access to tastier, healthier food.

“Anybody in their right mind would say that a tomato from the garden is fresher tasting and more nutritious,” Overby said.

Meanwhile, though most local food producers don’t depend on the products they sell for their main source of income, it can supplement it, Overby said. For example, it can be a good way for stay-at-home moms to make money or for young people to pay for college.

Getting the produce from seller to buyer in a way that is cost-effective for both is one of the challenges that needs to be addressed, Overby said. Farmers markets are only occasional or on one day a week, which can make it inconvenient for customers.

“How can customers get what they want, when they want?” he asked.

Transportation and distribution also are a challenge in northwest Minnesota, said Linda Kingery, executive director of Minnesota Extension Northwest Regional Sustainable Development Partnership in Crookston. Another challenge is that local producers are competing for market share with fruits and vegetables grown in areas where it is cheaper to produce them.

During the last decade, the number of local food producers in northwest Minnesota has not grown much. It’s been steady, Kingery said.

“Northwestern Minnesota and northeastern North Dakota are long on land and not densely populated.” That means that producers have to do a lot of legwork to market their products, she said.

Schools and grocery stores are potential outlets for local producers, but convincing them to purchase local food can be difficult, Gilje said. The feasibility study showed that large grocery chains often see local foods as competitors; schools have issues with buying authority.

Meanwhile, it’s often not feasible for farmers to travel to sell their goods, Kingery said.

“Time is the most precious commodity of what they do. Whatever they do as far as the interaction with the customer, it has to be time efficient,” she said.

Like Overby, Kingery believes buying local food is a better option than food that is grown in states – even countries – many miles away. If the economic realities constraining local food producers are addressed, there is an opportunity for the industry to grow in rural areas of northeast North Dakota, Overby believes.

“We need to get away from the sociological hype and get down to the business factors,” he said.

Said Berg: “The bottom line for everybody is they have to make money.”