Everyone purchases food. For most Americans, it is a relatively standard procedure. They go to a grocery store, walk up and down the aisles, and choose the most appealing items. For many, it is a weekly ritual.
Of course, the factors that make a particular food more appealing may vary. Some choose only the freshest and most beautiful foods. Others want convenience. Cost is a critical consideration. And, naturally, flavor is often paramount.
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The most popular alternative to the grocery store is the farmers’ market, where farmers bring their produce to an established location. Other farmers maintain roadside stands. This option usually offers fresher foods, often at lower costs.
A New Way to Sell Food
A new method of selling food is making an appearance in some locations. It is referred to as a “farm stop.” Much like the grocery store, this is a stand-alone location with regular hours open several days a week. Like the farmers’ market, the local farmers supply the food directly. The most significant difference is that the farm stop does not purchase the food; farmers place the produce there on consignment.
At first glance, this method appears to be a disadvantage to the farmer. It involves some risk since most farmers sell their entire crop to a single purchaser, usually some sort of food packer. Much produce is even sold to packers before farmers plant it. When the packer picks up and pays for the food, the individual farmer unloads the risk and is out of the picture.
With the farm stop system, farmers don’t get paid until someone purchases the produce. However, many farmers accept that risk willingly because the food stop pays them between seventy and eighty percent of the final selling price. That compares very favorably to the roughly fifteen percent average farmers get from the packers.
The Economics of Farm Stops
The farm stop is also better than selling farm produce at a roadside stand or market, where the farmer gets all the money. The disadvantage with stands or farmers’ markets is that the farmer, a member of the family or an employee must be there whenever the stand or market is open. In addition, space in farmers’ markets is generally rented. The farmer stop’s owner pays the costs of the retail location and the staff. Those expenses come out of the stop’s twenty to thirty percent cut.
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A recent article in The New York Times focused on a successful farm stop in Ann Arbor, Michigan. Its owners are a married couple and operate three locations. They opened in August 2014, using an abandoned gas station. The couple put up $170,000 to get it started.
Has that investment paid off? Their website states, “Argus Farm Stop business has paid over $26 million to local farms and food producers! Again, our farmers receive 70% of the purchase price for their goods. We now have 200+ farms selling here throughout the year.” (Emphasis in the original.)
In addition to common vegetables and meat products, the stops sell locally prepared bread, cheeses, wine and beer. They also operate a small café whose fare is made from the local ingredients Argus sells.
What Makes it Work
The owners cite two facts that they say played a role in their decision to open. “Over 90% of the local farms producing dairy, meat, and produce items have disappeared since 1950.” Furthermore, “the five-year survival rate for new farms is <50%. The average farmer’s age is 58 years, and this number is increasing. Once farms and farming skills are lost, they are extremely difficult to replace.”
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Could this success be duplicated elsewhere? The Times quotes Dan Barber, a chef and author of The Third Plate: Field Notes on the Future of Food. He describes the farm stop as “a beautifully simple idea” that “throws the supermarket on its head.” On the other hand, opening any business always implies risk and should be done only after careful investigation.
Certainly, Argus’s location in Ann Arbor, Michigan, is advantageous. As the home of the University of Michigan, it has a more than normally prosperous population. Likewise, many of the University’s faculty and students know the importance of nutrition, and many are willing to pay a premium price for local foods grown without chemical pesticides. Also, farming in Michigan is still primarily composed of small farms growing a wide variety of crops.
Momentary Flash or Lasting Success?
The Argus’s success also seems to have spread to its community. As the Times relates, “Washtenaw County, where Argus Farm Stop is, went from having about 1,000 farms in 1999 to 1,255 by 2022, bucking the trend of small farms closing both in Michigan and in the United States. The county is home to 15 farmers’ markets and two farm stops; 18 percent of Washtenaw County farms, which are mostly small, family operations, sell directly to consumers, substantially higher than the 7 percent national average.”
The current supermarket system also has many flaws. It artificially separates consumers and producers. Opening a massive store requires even more massive capital outlays. Operating costs are enormous, typically between $1.5 and $2.4 million per month, and the profit margin in groceries is notoriously thin—2.2% overall and only 1.6% after taxes. Therefore, supermarket owners must constantly look for ways to minimize costs while boosting revenue.
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The farm stop also brings a refreshing note of drawing from local sources. Most grocery stores offer food coming from an average of 1,500 miles away. They exclude most local produce because farmers cannot deliver on a large scale. Most farm stops get their fresh produce from within 50 miles.
Such sales provide the basis for a local culture that produces characteristic products that reflect the people of the area. Farmers can feel proud of their products and connect with the community. Over time, the locality becomes known for its distinctive foods and crops. This common link is one factor that helps forge together a distinct people.
Thus, farm stops bring better food to consumers at a competitive cost while benefitting America’s farmers. They could later develop into a long-term trend toward locally based economies and cultures. In a nation replete with gigantism and mass production, farm stops are a step in the right direction.
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