Vegetable growers rely on direct-to-consumer sales

According to the 2007 Census of Agriculture from USDA’s National Agricultural Statistics Service, 26 percent of farms growing vegetables and melons — nearly 18,000 farms — marketed and sold their products directly to consumers.

During 1997-2007, vegetables and melons sold directly-to-consumers grew substantially, reaching $335 million in 2007 — up 69 percent from 2002 and 97 percent from 1997. In 2007, vegetable sales were 28 percent of all direct-to-consumer sales.

These direct-to-consumer sales include those made to consumers through mail or Internet orders, as well as local sales conducted in marketing outlets such as farmers markets, farm stands, on-farm sales and community-supported agriculture (CSA).

While food grown and marketed directly to consumers still accounts for a small share of total agricultural sales (.4 percent in 2007), it is a fast-growing segment of U.S. agriculture and an increasingly significant aspect of vegetable and melon marketing, according to the USDA numbers.

In 2002, direct-to-consumer sales accounted for $812 million in sales. Five years later, sales grew 49 percent to top $1.2 billion in 2007. While total agricultural sales grew 51 percent, total direct-to-consumer marketed sales grew 120 percent from 1997-2007. Vegetables and melons sold directly to consumers grew substantially, reaching more than $335 million in 2007, up 69 percent from 2002 and 97 percent from 1997.

Vegetable and melon sales value is a growing share of total direct-to-consumer sales, according to the report. In 2007, vegetable sales were 29 percent of all direct-to-consumer sales, up from 24 percent in 2004. Direct-to-consumer vegetable and melon sales value comprised more than half of total direct sales value in Alaska, South Carolina and Delaware. Although vegetable and melon sales accounted for 28 percent of direct-to-consumer sales in value terms, vegetable and melon farms comprised only 13 percent of all farms that marketed direct-to-consumer in 2007.

A growth in farmer’s markets and CSAs has fostered an increase in consumer access to vegetables that are marketed both direct and local. The number of farmer’s markets grew to 4,685 in 2008, up 71 percent from 1998. According to Agricultural Marketing Service (AMS) 2006 National Farmers Market Survey, the most popular category at farmer’s markets was “fresh fruits and vegetables,” with nearly 92 percent of farmer’s market managers selling fresh produce in 2005. Sales of fresh vegetables at farmer’s markets are likely bolstered by increasing consumer participation in government food assistance programs including the Women, Infants, and Children Farmers Market Nutrition Program (WIC FMNP) and the Senior Farmers Market Nutrition Program (SFMNP). These programs are designed to boost sales of fresh fruits and vegetables at farmers markets, especially in areas where consumers were more likely to face food insecurity problems.

CSA, a form of subscription agriculture, began in the United States in the mid-1980s with two operations. Today, industry sources estimate the number of CSAs at more than 2,700. According to the 2007 Agricultural Census, there were 12,549 farms that marketed products through Community Supported Agriculture. In 2007, community-supported agriculture was active in every state, with the highest numbers located in California (8 percent), Texas (7 percent) and Kentucky (4 percent).

Direct sales of vegetables, like other commodities, vary regionally, and are most common near metropolitan areas. In 2007, California ($39 million), New York ($28 million) and Pennsylvania ($23 million) led the nation in sales value of vegetables and melons sold direct-to-consumers, while North Carolina had the most farms selling vegetables and melons direct-to-consumers.

According to USDA’s Agricultural Resource and Management Survey, 75 percent of all farms that sell directly to consumers in 2007 were located in metropolitan counties or counties adjacent to metropolitan areas, accounting for 85 percent of all direct-to-consumer sales.

Direct-to-consumer marketing seems to be most important to vegetable and melon producers in the Northeast and Mid-Atlantic regions; 36 percent of vegetable growers on average sell direct-to-consumers in these regions compared to the national average of 26 percent. The importance of direct-to-consumer marketing to local economies seems to be strongest in the Northeast, as total direct-to-consumer marketing (for all agricultural commodities) makes up 3.9 percent of total agricultural sales in that region, which is well above the U.S. average of .4 percent. Direct-to-consumer marketing of vegetables and melons is expected to increase in the Northeast, as buyers in large urban areas increase demand for fresh local produce and an abundance of small and family farms increasingly use marketing outlets such as farmers markets and farm stands

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