Growing pains for 'local grown' farmers

DAYTON, Va. - At the wholesale produce market in this Mennonite community, farming families arrive by horse and buggy, and pallets are stacked high with freshly harvested Shenandoah Valley onions, corn, green peppers and squash.

The setting evokes a simpler, preindustrial era. In reality, small-scale farmers are experiencing growing pains as they adapt to the country's expanding diet for locally grown foods and the exacting demands of high-volume distributors of their produce.

Companies such as Sysco Corp., Whole Foods Market Inc., and Wal-Mart Stores Inc. want guaranteed volumes, set prices for an entire season, and the ability to trace produce back to its source in the event of a food-related health scare, among other things.

However, such standards, and other formal trappings of the business world - contracts, lawyers, technology - often conflict with the ethics, and practical considerations, of small-scale farmers, especially those who are deeply religious.

"They feel they are producing something as safe and secure as their relationship with the Lord," said David Watson of the Association of Family Farms.

Moreover, growers in temperate climates do not have a 12-month supply of produce. "Trying to match what the buyers need with what's being planted" is one of the biggest challenges, said Richard Rohrer, a Mennonite farmer and manager of the Shenandoah Valley Produce Auction.

When one large buyer recently demanded insurance - which is needed in case a fruit or vegetable makes someone ill - the Dayton farmers balked.

"We deal more on the handshake, personal commitment - look the grower in the eye," said farmer Vernon Hoover, the Dayton auction's independent buyer.

Still, Amish and Mennonite and even nonreligious small-scale growers in Virginia, Pennsylvania, Ohio, Iowa, Tennessee, New York and other states are mindful of the money to be made from this emerging relationship with big distributors. And they are willing to engage in some horse trading to create business relationships.

For example, they want industry demands such as specialty boxes and company labels to be factored into their price, according to Rich Pirog, associate director of the Leopold Center for Sustainable Agriculture at Iowa State University. And while wholesale markets, or auctions, benefit the food industry by bringing together larger numbers of growers in one location, they also make it easier for smaller growers to make connections to representatives of big companies and their resources, including refrigerated trucks and bar-code labels.

"If you have a quality product, consistently packaged, don't top-dress by taking the worst and putting it on the bottom - all that is the way you build your name here at the auction," said Charlie Martin, the Dayton auction's board chairman. He proudly stood before a large stack of unblemished yellow and green squash that his 16-year-old daughter picked that morning, wearing surgical gloves to avoid marring their flesh.

The demand for what small-scale farmers have to offer is burgeoning.

Wal-Mart last month said it would sell $400 million worth of locally grown produce this year, making it the largest player in that market. Its suppliers include "many Amish and Mennonite growers" who work through third-party suppliers, spokeswoman Deisha Galberth said.

Chipotle Mexican Grill Inc. in June pledged to buy 25 percent of at least one produce item for each of its stores from small and mid-size farms within 200 miles.

Whole Foods Market bought 22 percent of its produce locally last year, up from the previous year's 19 percent.

By any measure, though, the nation's 50-plus Amish and Mennonite produce auctions remain a sliver of food-industry sales. Total combined retail and food-service fresh produce sales were $94.8 billion in 2005, according to industry and government estimates.

The Cumberland Valley Produce Auction in Shippensburg, Pa., began in 1994 with roughly 500 Amish and Mennonite growers, whose customers were primarily local grocers and restaurants. Since then, it has doubled in size, thanks in large part to the demand from large, well-known companies. Buyers come to Shippensburg from New York, Pittsburgh, Washington and other points.

A decade ago, Cumberland Valley wrestled with many of the same issues the Mennonites of Dayton, Va., are dealing with today. Now, the auction is large enough to afford liability insurance, in case a legal action arises from a tainted product, manager George Cleary said.

There is a simple formula for success, Cleary said: "Good product and plenty of it."