Partners in Massachusetts Agriculture Education
Mass. Department of Agricultural Resources
Autumn 2005 Newsletters
What is It?
In the United States today, the farm is traditionally just the starting place for a huge and diversified agricultural industry. Food grown on the farm is transported, processed, packaged, stored and distributed to the market for sale to the public.As this diversified agricultural system has grown, the farmer’s share of each dollar that the consumer pays for farm-raised products has decreased. The U.S.D.A Economic Research Service reported that in the year 2000 farmers received only 20 percent of the food market, with the other 80 percent going to those who transported, processed, stored, distributed, advertised and marketed the foods. Adding value to an agricultural crop offers the farmer the opportunity to capture a bigger share of the consumer’s food dollar. Farmers can increase the economic value and consumer appeal of an agricultural crop or commodity through changes in genetics, processing or diversification. Value may be added by changing the physical state or form of the product, changing production practices in a manner that enhances the products value or by physically defining and segregating an agricultural commodity or product to result in enhancement of its value. These changes allow farmers the opportunity to market a unique product, fill a market niche, simplify the supply chain, provide a service or lower costs. New products, enhanced product characteristics, brand names, services or unique customer experiences may create additional value. Changing the way a commodity is marketed: Farmers add value by marketing raw agricultural products in a nontraditional way to command a higher price. The farmer might sell his crops at a farm stand, to special processors, to a local schools or restaurants or at a farmers’ market. Changing the form of a commodity before it is marketed: Farmers add value by transforming raw agricultural products through processing. This provides the opportunity to market differently. Although costs are incurred, a higher profit covers these costs. Selling vegetables and fruits directly to the consumer requires cleaning, packaging, and displaying, but the farmer is able to capture 100 percent of the consumer’s dollar. Changing the way a commodity is packaged for market: Package design is important. It must capture the consumers interest, have perceived value and meet the consumer’s need in terms of size or quantity. Ready-to-eat foods that are pre-cut, washed or cooked appeal to those with busy schedules. Unique, special occasion or gift-ready items bring a higher price, especially if they offer a connection to the land or complement tourism by giving visitors something to share back home. Growing a commodity for a special market: Ethnic- or culture-oriented consumers are a fast growing value-added market. Immigrants also have influenced the diets of other Americans. Organic, free-range and pasture-fed production meet diverse tastes and dietary needs adding value. Adding a new enterprise: A new enterprise is any change in a product or service. This includes growing the commodity for a special niche market, growing a crop for a special industry such as cosmetics or medicine or switching crop practices to appeal to a distinct market. Farmer may add entertainment or educational attractions such as petting zoos, farm workshops and tours, nature walks, wedding facilities or picnic sites. Reducing Costs: Farmers may band together to reducing costs by selling or transporting crops cooperatively. Others bundle two or more different crops to create a desirable product.
Keys to Success
Success in introducing value-added agriculture to the farm rests on producing a unique, high quality product or experience that consumers will value and want to buy. It also rests on hard work, research, good business planning, record keeping and constant evaluation. Farmers must do what they love and focus on their niche.The value-added product or enterprise must be unique to succeed in the long-run. A product or service that is not unique and distinctive will quickly be copied thus losing its competitive edge. Farmers can emphasize what is special about their product by linking it to their farm, it’s history or their special growing and production practices. People are also hungry for a connection to the earth. Farms offer the experience of farm life while also providing fun, peace and relaxation.The value-added product or service should also be high-quality. Consumers want fresh, better tasting, clean, reliable and healthy products. They know it when they taste it!Value-added agriculture should be demand driven. Farmers must get to know their customers, learn their preferences and produce what those customers want to buy.
Promotes Sustainability
Adding value to agricultural production contributes to the economic and environmental sustainability of both farm and community. A larger share of the consumer’s dollar will result in a higher quality of life for the farmer. This will ensure that the farm remains in business, protecting the rural character of the community and its natural resources. Value -added agriculture can also help sustain the local community and invigorate the local economy. Small scale agricultural processing enterprises create new markets for higher value agricultural products. These enterprises rely on local ingredients, staff and markets. Value adding can serve to showcase the uniqueness of a community.
Remaining Viable Today
Diversification is important, if family farms are to remain viable today. Most farmers can change their production and marketing systems to add value. Increasing numbers of farmers are producing new crops and new products and experimenting with alternative marketing methods. An agricultural business may utilize a combination of value-added techniques to provide a competitive advantage in today’s marketplace.
In early America farm families were self-sufficient. They raised crops and livestock, made their own clothes, gathered heating and cooking fuel, and constructed their own homes and shelters. Food was grown or raised primarily to feed the family.
Today most Americans do not raise their own food. Since the 1800s science and technology have helped make agriculture more productive. Improvements in transportation, storage and processing techniques created a system where farm-raised foods were transported elsewhere for processing, packaging, storage and distribution to market.Total U.S. food expenditures of $561 billion dollars were produced in 1997 by the agribusiness sector of our economy. Between 1950 and 1997, value added beyond the farm gate to consumer-ready food products was responsible for most of the $251 billion dollar growth in total food expenditures.
Much of this increase is attributed to a move away from home-cooked meals and towards more demand for convenience oriented food products purchased at restaurants, drive-through windows, hospitals, schools, and other institutions. These away-from-home food purchases have increased from 24.3% of total food expenditures in 1963 to 40.4% of total food expenditures in 1997.
These trends in diversification of the agricultural systems and away from raw foods, caused the farmer’s share of the consumer’s food dollar to decrease considerably. It dropped from 46 % in 1913 to 21 % in 1997 and to just 20 % in the year 2000.
Each person and process involved in getting the food to you receives a share of each food dollar. Label the diagram on the right with the monetary amount for each of the following figures from the USDA’s Economic Research Service in 1997:
Farm Value 21.0¢
Transportation 4.0¢
Labor 38.5¢
Before-tax profit 3.5¢
Packaging 8.5¢
Interest, taxes, etc. 21.0¢
Fuel & Electricity 3.5¢
From Where Does Your Food Dollar Go? Resource Guide for Teachers Grade 4-6 by Illinois Farm Bureau
- Massachusetts ranks first in New England for direct sale of farm products to consumers. At $31 million in direct sales, Mass. farmers were responsible for 40 percent of New England’s total.
- Massachusetts ranks seventh nationally in total value of direct sales, following California, New York, Pennsylvania, Michigan, Ohio and Washington.
- Massachusetts ranks first nationally in value of average direct market sales per farm at $24,900 per farm.
- The total Massachusetts’ Agricultural cash receipts is $384 million dollars.
- Massachusetts ranks 3rd in the US for farmland value at $9,234 per acre.
- More than 80% of Massachusetts farms are family-owned. Over 93 percent fit the category of “small farm” according to the USDA definition of sales below $250.000.
- Massachusetts agricultural exports totaled $167 million and support over 3,000 jobs.
- In Massachusetts, there are 111 farmers’ markets, 400 roadside stands, and 2,600 food manufacturers producing a total consumer food sales of $6 billion and $99 million in wages.
- Nearly $219 million is spent by farmers statewide on inputs, such as feed, seed, livestock, fertilizer, fuel and electricity.
- Massachusetts’ farms and value-added agriculture help promote a local food system. Over the past several decades, the trend has been away from local production. At the turn-of-the last century, the New England States produced more than 80 percent of their own food. Now, more than 85 percent is imported into the region. The continuation of local farming is important to ensure a safe regional food system.
From NE Agricultural Statistics 2004 and U.S. Census of Agriculture 2002 as compiled by the Mass. Dept of Agricultural Resources
Value-added products offer a higher return, open new markets, create brand recognition and add variety to a farm operation. Here are just some of the ways Massachusetts farmers are adding value.
- Raw foods: cut, package, wash, peel
- Canned and Bottled Foods: jams, jellies, preserves, vinegars, salad dressings, pickled foods, hot sauces, honeys, syrups, seasonings
- Dried Foods: dried fruits, sun-dried vegetables, popcorn, beans, flavored nuts
- Baked Goods: pies, muffins, biscuits, bread, pizza, cookies
- Value-added Dairy Products: flavored milk, cheese, goat cheese, sheep cheese, yogurt, ice cream, butter, herb butter
- Entrees: soup mixes, salads, turkey pies, cooked turkeys, frozen entrees, packaged meats
- Milled Foods: corn meal, milled wheat, blueberry or cranberry muffin or pancake mix
- Beverages: cider, juice, wine, beer, flavored tea, hot beverages
- Health and Beauty Products: soap, bath oil, herbal oil, hand cream, lip balm
- Gift Items: fruit baskets, baskets of local products, decorative and information labels, cut flowers, flower arrangements, holiday plants, heirloom seeds, wool, home-spun goods.
- Value-Added Growing Methods: organic, free-range, hormone-free, antibiotic-free, heirloom vegetables, varieties with improved tastes.
- Unique Products: mushrooms, maple products, goats,
- Value-Added Farm Enterprises: bed and breakfast, farm stay, farm tour, garden tour, workshop, lecture, hay ride, fee fishing or hunting, pick-your-own, pumpkin or apple picking, petting zoo, nature trail, or wildlife viewing
¤ Value-Added Market Alternatives: roadside farm stands, pick-your-own operations, farmers’ markets, festivals, shows and conferences, mail order catalog, web site sales, direct-to-store or supermarket sales, local food cooperatives, gourmet and specialty shops, restaurants, catering businesses, upscale delis and grocery stores, health food stores, wholesale, home delivery, community supported agriculture and word-of-mouth.
1. Ask students to pick one Massachusetts grown fruit, vegetable or farm animal. How many different products can be made from this crop?
2. Ask students to imagine a new product that can be processed from a raw food. Have them name their new product and its source, describing the processing steps. Design the package to sell it. Decide where to sell it, identify who would buy it and why, design advertising and price it.3. Invite a guest speaker from a food-processing plant or arrange a field trip.
4. Ask students to collect processed foods from a common raw food product. Sample the variety of foods collected.
5. Have a tasting party. Grow a number of heirloom tomatoes and more modern tomatoes. Which varieties are easiest to grow, look best and taste best. Are the tomatoes fresh from the garden preferable to those in the grocery store?
6. Visit and apple orchard. Try out several different varieties to see which students like the best.
In the year 1900, forty percent of the population of the United States engaged in farming. Today less than two percent are farmers.
-
1900 - 40 %
-
1920 - 30 %
-
1940 - 20 %
-
1969 - 8%
-
1990 - 1.9%
In 1940, each farmer produced enough food to feed an average of 18.5 people. Today each farmer produces food for approximately 129 people.
-
1940 - 18.5 people
-
1950 - 27.2 people
-
1960 - 46.2 people
-
1970 - 72.8 people
-
1980 - 115 people
-
1990 - 128 people
-
1995 - 129 people
In 1910, there were 37,000 farms across the state of Massachusetts, according to the U.S. Census of Agriculture. In 2002, there were approximately 6,000 farms in Massachusetts encompassing 518,570 acres for an average of 85 acres per farm.
-
1910 - 37,000 farms
-
1920 - 34,000 farms
-
1930 - 34,400 farms
-
1940 - 36,200 farms
-
1945 - 37,900 farms
-
1950 - 29,100 farms
-
1955 - 18,000 farms
-
1960 - 13,000 farms
-
1965 - 8,700 farms
-
1970 - 6,000 farms
-
1990 - 6,400 farms
-
1995 - 6,000 farms
-
2000 - 6,100 farms
-
2002 - 6,000 farms
1. During the past 100 years, what was the peak year for number of farms in Massachusetts?
2. What changes were taken place in the U.S. at that time that might explain the decline in farming?
3. What changes have been made in agriculture and farming practices, so that today’s farmers are able to feed many more people than they did in 1900?
Some dairy farmers process and bottle their own milk and sell it directly to the consumer at their farm. Others sell their milk to businesses that process. The milk is picked up at the farm and transported to the processing facility. There it is tested for quality, pooled with milk from other farms, pasteurized, homogenized, bottled and transported to market.
Farmers are paid a bulk price for this wholesale milk based on the amount of butterfat, protein and other solids. Different types of cows produce different quantity and quality of milk. The Holstein produces a larger volume of milk but her count of butterfat, protein and other solids is low compared to the Jersey, who gives much less milk but tests with a much higher count in these three components. Milk is classified according to its final use: Class 1 is processed into fluid milk; Class II is used for ice cream, yogurt or cottage cheese; Class III becomes hard cheese or evaporated milk, and Class IV will be turned into used for butter or powdered milk.
The money that the farmer receives must pay for all the expenses of running the farm. This includes feed; water; shelter; veterinary expenses; farm machinery and equipment to grow and store crops, milk the cows, cool the milk and store it; and the expenses of hiring farm staff and supporting the farm family. The milk processing company may also transfer the costs of hauling milk, advertising and other processing expenses.Those farms that process and sell their own milk directly to the consumer are able to capture 100 percent of each dollar paid for milk through value-added agriculture. In addition, their customers may purchase other items from the farms store, such as cheese, butter, eggs, bread, ice cream and more. Cooper’s Hilltop Dairy Farm in Leicester currently sells a gallon of milk for $3.45.
Other farms and agribusinesses may choose to add value to milk by turning it into ice cream. At Bliss Brothers Dairy in Attleboro ice cream is made in 500 gallon vats and then poured into half-gallon or 3-gallon containers. There are 42 ounces of ice cream in a half gallon container of their high quality vanilla ice cream and 225 ounces in the 3 gallon container.
The vanilla ice cream is composed of 81.95% milk products (milk, cream and dried milk). It contains .4% vanilla. The rest is sweeteners and stabilizers such as sugar, corn syrup and gelatin.
Bliss Brothers Dairy sells a half gallon of ice cream retail for $5.79 and wholesale for $4.00. The three gallon container is sold retail for $28.00 and wholesale for $21.00. A single scoop ice cream cone or cup is sold for $2.50 and contains six ounces of ice cream.
1. How much money does the farmer who sells raw milk to the processor receive for one gallon of milk? How does this compare to the farmer who processes and sells his own milk at the farm?
2. How much does the farmer received wholesale for one ounce of milk?
3. How many ounces of milk product are in a ½ gallon of vanilla ice cream?
4. How many ounces of milk product are in each six ounce cone?
5. How many six ounce ice cream cones can be sold from a ½ gallon container of ice cream? (What is the total amount of money received for selling a half-gallon of ice cream as six ounce cones?)
6. How much value was added to milk in ½ gallon of ice cream sold as cones? (% milk x total price - money paid to farmer.)Answers: 1) $1.31; 2) 1 cent; 3) 34 ounces; 4) 4.85 ounces; 5) 7 cones & $17.50; 6) $14.00
Thanks to David Bliss and Tom Raposa from Bliss Brothers Dairy in Attleboro and Marjorie Cooper from Cooper’s Hilltop Dairy Farm for the background information for this activity.
Value Added Agriculture Resources
251 Causeway Street Suite 500
Boston, MA 02114
Web site: www.mass.gov/agr/
Main Office: 445 West Street
Amherst, MA 01002
Phone: 413-253-4351
Greenfield Office: 413-773-3338
Holden Office: 508-829-4477
West Wareham Office: 508-295-5151
Westfield Office: 978-692-1904The information from this newsletter was taken from the resources listed above.
Click here to send us a message or add a name to our mailing list
Massachusetts Agriculture in the Classroom
P.O. Box 345
Seekonk, MA 02771
(508) 336-4426 Fax: (508) 336-0682