A number of produce auctions have sprung up around the state. While the auction process can be exciting and you may capture peak prices occasionally, there is another model for marketing produce and that is a wholesale/retail marketing point. Four businesses have developed using this marketing model, all in the Rich Hill area (which is near the border of the counties of Bates and Vernon about an hour south of Kansas City).
Wholesale/retail marketing point businesses are fresh produce warehouse and distribution facilities that charge a commission for the service they provide. Growers deliver their product, after which it is sorted and aggregated for the buyers to pick up. Wholesale/retail outlets may have several levels of buyers: large wholesale, smaller wholesale, peddlers, restaurants and retail. A large wholesale buyer may leave a refrigerated truck at the site so that time is saved in loading, and it can provide cooling to the produce when needed. The facilities are generally owned by a single person or a farm family; they are responsible for collecting and paying the bills. As with produce auctions, the facilities are often used as distribution points for packaging materials (e.g. produce boxes). Compared to produce auctions, the operations are a bit more casual growers and buyers come by with produce at varying times through the day to deliver or pick up product. Business hours are more or less Mon. to Fri. from 8 to 5, with adjustments made for busy or slow times (e.g. Saturday hours may be added). Most of the produce is handled during the months from May to October, with June to Sept. being the peak period, but April and November may see some activity too. Some may also provide a regular ‘store’ type setting for retail customers.
The four wholesale/retail marketing points are:
The way the prices, volumes, and type of fresh produce are negotiated for sale is quite different than at produce auctions, being more relationship based and predictable. Wholesale markets typically have contracts with their buyers. These may be a set price which would guarantee the seller a price even before he plants. And since he knows what his price will be, he can use that to decide what crops and varieties to produce. Or the price may be set at the going market price. Since he develops a longterm relationship with his buyer, there is an exchange about other crops to grow. This will lead to an expanded base of crops to be grown. This diversity will lessen the risk of just growing a few crops, any of which might have a failure that year.
Growers have to be able to gain the confidence of the buyer that they can supply the large quantity and specified quality needed. So it will take years of experience and a lot of acres to get the large contracts. A disadvantage of this system is that if the crop doesn’t meet the buyer’s specifications, he may reject the crop, leaving the grower with a large quantity of produce that may be difficult to move. However, crop that isn’t contracted may still be sold at one of the other venues (e.g. peddlers or retail).
These businesses feel the wholesale/retail market has three main benefits- savings of time, stable pricing, and guaranteed crop quantity(s) to grow. For auctions the grower may have to travel further and will wait in line till his turn comes. The price he will get is unknown and a market isn’t guaranteed. Different lots of the same produce may go for a different price depending on the demand that day for that item. A glut on that day may result in lower prices. Both systems have their advantages and disadvantages and will suit some better than others.
How the Old Order Mennonites and Amish started into supplying fresh produce is an interesting and somewhat familiar story. They began to settle in Rich Hill in starting in 1992, from several states including Kentucky & Pennsylvania. As farmers, they were already growing vegetables and molasses sorghum. This business model developed from these crops. They began growing vegetables and selling them retail, as well as to some peddlers. They also established a sorghum processing facility, the seasonal aspect of this process being a community activity. The opportunity to expand into wholesale production was prompted by serious flooding that occurred for several years in the early 90’s in the KC bottoms where vegetables were grown. The aspect of a community effort for the sorghum processing seemed a natural approach for sorting and washing produce. That usage has stayed with the facility and in the peak times up to and more than 20 may be involved with their sorting and packing line.
While this community does not use telephones, motorized vehicles or electricity, some of these marketing points are ahead of their time. At least two are GAPs certified. Additionally, quite a number of supplying farms are as well. These area farms and delivery points were even part of a USDA pilot program evaluating an alternative method for GAP certification, called ‘Group GAPs’, a process in which a number of growers work through the process together. A December 2012 report on this pilot program by the Wallace Center termed the results encouraging; thus it may serve as an option for other Amish and Mennonite communities to consider.
Growing these vegetables and fruit is a vital part of this farming community. Over 30 farms in the Rich Hill community and 15 in the Richards community (just to the south) grow fresh produce commercially. At least 300 acres are in vegetable production which the farms have, more or less, specialized for, as well as a bit of fruit. There might be some livestock produced, but much is for personal use. Forage and some grains are needed for the horses as well. It is impressive to visit in August, to see bins of seedless watermelons stacked floor to ceiling and semi-trailers parked along the loading dock. It is similar to melon farms in the bootheel, and great that a large amount of produce for Kansas City can be grown so close by.
REVISED: November 20, 2015