On Thursday, August 24, Matt Ludwig and I left Blacksburg and headed to Harrisonburg to interview Garnett Brockman, an experienced insurance agent with Virginia Farm Bureau Insurance. Garnett works out of the Luray office, focusing on ag and production-related policies. He was kind enough to walk us through the insurance considerations involved in marketing products directly to restaurants.

Most products sold to restaurants are covered under product liability policies, although the type of policy may vary somewhat with the product or product form. The amount of coverage necessary is determined by the amount of assets you’re trying to protect. Any farm insurance agent should be able to advise you on what specific policy you might need.

So how does the claims process work? If there’s a food safety outbreak at a restaurant you supply in which damages are claimed, the restaurant is going to audit their product chain to figure out where things went wrong. If it wasn’t your product, don’t worry about it. If it was your product, call your farm insurance agent and they’ll settle the damages under your policy. Don’t have insurance? Garnett recommends you get a good lawyer.

This underscores a great point about insurance. While liability insurance isn’t typically prohibitively expensive, many people view it as an unnecessary expense, or even a nuisance. Many people think that just because they’re good farmers, they’ll never have an outbreak. They may never have an outbreak, and one hopes they never will, but if an outbreak gets traced back to them and they’re uninsured, they can lose their farm. Protection from the possibility of such an outcome is more than worth it, and in many cases it’s simply the cost of doing business.

At the end of the day, insurance is just another risk management tool, no different from hedging or pricing contracts or any of the other devices farmers use to mitigate risk. Garnett and folks like him across Virginia and the US help keep farms safe enough to pass from generation, and safe enough to start in the first place To learn all you need to know and get an idea of all the questions you should be asking your insurance agent, be sure to watch Garnett’s interview on the Virginia Market Ready YouTube Channel. Thanks again to Garnett for sharing his time and wisdom with us.

Ben Garber (Virginia Tech Ag Econ ‘19)
Blacksburg, VA
September 1, 2017

On Wednesday, August 16, Matt Ludwig, French Price, and I traveled through the hills and rills of Churchville, Virginia, to meet Mike Calhoun of Stover Shop Greenhouses. Stover Shop is a family hydroponic lettuce operation with four lettuce cultivars and a variety of product options and distribution channels. They do everything from bagged lettuces targeted at institutions to plastic clamshells in grocery stores in the western part of the state to lettuces served in restaurants across Virginia.

Like many farmers, this isn’t Mike’s first career. He spent years in the construction business, but when the greenhouse a couple miles from his house went up for sale, he and his family decided to get into the lettuce business. Mike makes no secret of the fact that it’s a tough business to get into and a tough business to stay in. Still, the Calhouns stick around. Mike’s wife and two of his sons work at Stover Shop with him, and he hopes to have room to bring more of his family on if they’re interested. Stover Shop also employs folks from around the Churchville area; some of those folks help with harvest when things get busy, and some work at Stover Shop year-round.

The Stover Shop team prides themselves on being able to provide the best product possible by controlling as much of the product chain as possible, which is why they decided to grow their lettuces in a greenhouse. The greenhouse can control temperature, light intensity, and humidity using a digital control panel. Stover Shop also uses a fertigation system, meaning that their irrigation water contains tightly controlled amounts of fertilizer. According to Mike, this allows them to change the flavor of their lettuce simply by changing the fertilizer mix. To make sure the product stays fresh, they also do their own packaging in-house and handle some of their own delivery.

This high level of control over the product is apparently a necessity when growing lettuce. Mike made it clear that even in a greenhouse, lettuce is very difficult to grow at certain times of the year. Summer is difficult because the lettuce has tendency to bolt and are stemmy, while the winter grow is expensive to heat. Despite the modern, controlled environment Stover Shop maintains, they still have seasonal cost, quality, and supply issues to consider.

In addition to their control over their product, Mike credits their involvement with state agencies, state specialists, and other ag organizations as giving them the tools to succeed. Attending a Virginia Cooperative Extension networking event helped Stover Shop get some of their first clients, and Mike has tried to stay abreast of their marketing events ever since. He sees good marketing as essential to Stover Shop’s survival and expansion. Another big step for them was the opportunity to work with Amber Vallotton, Virginia’s Produce Safety Specialist, to get USDA GAP certification. In Mike’s experience, GAP certification is a necessity to work with large buyers, distributors, and institutions. If you don’t have it, you can’t play with the big boys. Although GAP certification intimidates a lot of people, Mike says they find it very manageable at Stover Shop, and it gets easier the longer you do it. The first audit is a little scary, but the more GAP becomes part of your routine, the less you have to worry about it. In fact, “I bet my son doesn’t spend an hour a week doing his GAP manuals. He doesn’t have to.” For more about Stover Shop’s GAP experience, see this video.

Visiting Stover Shop was a great chance to see the intersection of old-school customer service and high-tech agriculture. Not only that, our visit highlighted the science and attentiveness that go into a single leaf of lettuce. To learn more, be sure to catch the full interview with Joe on the Virginia Market Ready YouTube Channel, visit their website, or look for their products in a grocery store, restaurant, or school near you. Thanks again to Mike for sharing his story and wisdom with us.

Ben Garber (Virginia Tech AG Econ ‘19)
Blacksburg, Virginia
September 1, 2017

Virginia’s agriculture industry is full of businesses built on longevity and strong relationships. T&E Meats, a meat processor located on the northwest side of Harrisonburg, is one such business. T&E has been in operation since construction on the building was completed back in 1939. As the business evolved over the years, it grew to include retail and wholesale enterprises in addition to the core meat-processing business.

In 2007, current General Manager Joe Cloud and Joel Salatin of Polyface Farms purchased T&E and brought its focus back to the USDA-inspected meat processing business. On July 19, Matt Ludwig and I traveled to the T&E plant to talk with Joe about T&E, meat processing, and selling meat products directly to restaurants.

One of the main themes of our conversation was the type of processing that is required for a product to be sold to restaurants. Smaller producers who sell only to individuals typically use custom processing, a simplified method where the meat is processed on an individual’s behalf, but it cannot be resold. To sell in restaurants, via wholesale, or in retail outlets, farmers must have their meat processed under the more rigorous (and thus more expensive) USDA inspection process.

USDA inspection requires more-involved processing and packaging steps, as well as requiring abattoirs to keep an inspector on their staff present whenever the plant is in operation. Inspectors ensure that live animals are treated humanely and are fit for slaughter, that carcasses are fit for human consumption, and that processing facilities are kept in a sanitary condition. Undergoing USDA inspection allows a farmer to access resale channels such as grocery stores, restaurants, and on-farm retail, as well as a greater degree of credibility. Being inspected to one standard or another doesn’t intrinsically improve the value of the meat; good product is still good, and bad product is still bad. However, USDA inspection gives the consumer a more complete idea of how the meat was handled during the processing phase. In addition, USDA inspected meat bears a processor-specific stamp, and sometimes a lot identification number, so that the meat is more easily traceable. In the event of a foodborne illness outbreak, the processor and lot identifier can be used to track down any affected product, resulting in a greater level of food security for the end consumer.

As with other aspects of direct marketing, communication is key when processing meat for sale to a restaurant. One of the incentives for chefs to purchase meat directly from the farmer is so they can have ingredients that meet their exact specifications for the dishes they serve. At T&E, when processing meat destined for a restaurant, they call the chef for specific cutting instructions. The longer they work with a certain chef and a certain farmer, the better they get at processing those animals just as the chef likes it. Joe told us that some chefs will even ask T&E to leave the meat in subprimal cuts (large cuts consisting of large muscle groups rather than individual steaks) so that the restaurant staff can finish the processing of the meat into cuts preferred by their customers themselves. Buying meat directly from the producer has other benefits as well. As Joe points out, small farmers tend to produce meat with more distinctive flavors and textures than that offered by wholesalers. While not all consumers prefer these characteristics, those that do tend to love them, and it can be a good way to distinguish a restaurant’s cuisine from the rest of the pack. Buying directly from the farmer also supports the local economy, makes for better farmer-chef communication, and provides restaurants with a story to tell for each dish.

Joe also noted that his success is directly tied to that of the growers he works with. Although T&E prides themselves on their relationships with their customers, in his 10 years in the meat business, Joe has met his share of processors and farmers who view each other as adversaries. As he told us, “If the farmer doesn’t make money, I can’t stay in business. It’s in my best interest as a processor to help farmers succeed.”

Another major part of T&E’s mission is education. Joe gives tours of the plant by appointment, and he’s worked with groups such as industry members, college students, and homeschool groups. He feels it’s important to show the public not only the work that’s done at a meat processing facility, but that the animal is treated with respect and care throughout the entire experience. The hope is that an educated consumer is an engaged consumer, and that people who know more about their food will tend to buy directly from the farmer more often. An educated public is also better able to interpret the marketing terms used in the food industry, which can make it easier for farmers and restaurants alike to form long-term relationships with consumers who value the same things they do.

We learned a lot about the meat business from our conversation with Joe, and we’re extremely grateful for his generosity with his time and knowledge. To learn more, be sure to catch the full interview with Joe on the Virginia Market Ready YouTube Channel, or learn more about T&E and their services by visiting their website.

Thanks for learning about Virginia’s food systems with us. It’s good to know our food is in good hands.

Ben Garber (Virginia Tech AG Econ ’19)
July 30, 2017
Verona, VA

Direct marketing and the attendant importance of forming relationships with customers have become important for many small farms looking to find ways to stay profitable, but that hasn’t always been the case. It started as a movement spearheaded by a small number of influential farms at a time when many farmers still sold their products to distributors or buyers at the stockyard. On March 2, Matt Ludwig, our project’s media guru, and I were privileged to interview one of these direct marketing pioneers, Polyface, Inc.

Polyface is a third-generation family farm nestled in the hills of Swoope, Virginia, just southwest of Staunton. Polyface is most closely associated with Joel Salatin, the farmer, author, and speaker who made the farm famous. Joel has spent decades touring the country and appearing in print, film, and audio media to discuss his take on sustainable farming practices and advocate for local food systems. He has written several books about sustainable agriculture, including Folks, This Ain’t Normal and Salad Bar Beef. He has also been featured prominently in books like Michael Pollan’s The Omnivore’s Dilemma and films such as Fresh.

We interviewed Joel’s son Daniel, who, in addition to his own speaking duties, now handles most of the day-to-day management of the farm. Daniel’s wife Sheri also has speaking engagements where she discusses her experiences as marketing director at Polyface.

Any farm that is serious about marketing in today’s economy must proactively engage with consumers, but Polyface takes that to the next level. The speaking engagements have benefitted the farm on several levels. While primarily a way to discuss the principles behind Polyface (more on those later), these speaking engagements have also helped build the farm’s brand and drawn visitors to the farm–a major pillar of Polyface’s marketing strategy.

Daniel highlighted the importance of free samples in their marketing strategy. When selling to restaurants, Polyface will often send large sample baskets to chefs so that they can taste the product and cook with it before making buying decisions. I actually happened to run into Daniel and another member of the Polyface Team a few days after our interview at a Virginia Cooperative Extension networking event in Luray -they believed in samples so much that they’d driven an hour and a half just to hand out free samples to chefs!

Perhaps the most interesting point about the Polyface team is that their marketing strategy is driven by the same principles that shape their lives–their focus on personal relationships is a huge part of their brand and their lives. Activities like checking in on restaurant accounts weekly and inviting people to see the product being made help them maintain loyal customers. Living in a small rural community has a tendency to make you reliant on personal relationships, so this comes naturally to them. The Salatins have used these principles to their advantage in the business world. By the same token, their support of local food systems and pasture-raised proteins are fundamental pillars of their message, their personal beliefs, and elemental to the Polyface brand. They argue that their products are intrinsically different not just because of the discernable difference in taste and texture, but because of their positive effects on the land and community. They are farming on their terms, and they’ve excelled largely due to their ability to describe the ethos that drives them and targeting customers who hold the same beliefs.

That brings me to a point Daniel made in our interview: Polyface is not trying to be the low cost producer, because that wouldn’t work for them. Consider their broilers: it costs them more to raise a chicken to market weight, process it, find a consumer, and deliver that chicken to the consumer than it would for a large, publicly held, vertically integrated poultry company. Part of the difference in cost is due to the differences in production practices, and part of it is due to the fact that Polyface doesn’t have access to the economies of scale that larger producers do. But Polyface has still flourished selling their product for a higher price. Price is a way to communicate value. Farmers looking to enter direct markets should not be hesitant to raise prices if they feel their product is better than competing products.

Although the Salatins have done a stellar job making their farm business successful, not every farm can do exactly what the Salatins have done and still be successful. But despite the differences between farms, there’s plenty that every farmer can learn from the Salatins’ story, from their success in belief-based marketing to their ability to find and maintain a place in the market without having to compete with lower-cost producers.

If you’re interested in learning more about Polyface but don’t want to wait on the video, feel free to visit http://www.polyfacefarms.com/ or swing by the Polyface farm store. You can also find Joel’s books and information about other Polyface media resources. Many thanks to Daniel for sharing Polyface’s story with us.

Ben Garber
Blacksburg, Virginia
March 18, 2017