RD58 - Annual Report on the Virginia Farmers Market System -- 2005 Report and 2006 Plan


Executive Summary:
The Virginia Farmers Market System includes four shipping point farmers markets, each operating under a contract between the Commonwealth of Virginia and private sector and/or county government organizations:

• The Southwest Virginia Farmers Market, Hillsville, is operated by the County of Carroll
• The Eastern Shore of Virginia Farmers Market, Melfa is operated by a producer cooperative
• The Northern Neck of Virginia Farmers Market, Oak Grove is operated by local vegetable producer association
• The Southeast Virginia Farmers Market, Courtland is operated by local vegetable producer association.

For the 2005 harvest year volume and value of produce handled was steady to slightly declining as compared to 2004. Statistically the breakdown is as follows:

• 269 producers marketed product and/or used market services at the four markets (combined), compared to 284 producers in 2004
• Gross value of products marketed was over $19 million representing over 2.23 million product units, compared to $23.05 million in 2004 representing 2.08 million product units
• The markets served 5,749 acres in 2005, compared to 5,554 acres in 2004
• The system served 72 brokers and 3 82 major retail stores and institutional buyers, compared to 55 brokers and 444 retail stores and institutional buyers in 2004

Significant factors affecting production and marketing volumes for the past year as cited by the market operators in 2005 were, on the negative side:

• Increased fuel and input costs cut profitability dramatically
• Extreme weather volatility with a cold wet spring and early summer followed by extreme heat and drought in most areas
• Continued increase in buyer trends toward purchasing local produce which enhanced more local marketing and sales opportunities, thus decreasing the need for sale to wholesalers
• Slow economic recovery in some regions of the state
• Continued produce buyer consolidations resulting from mergers and buyouts, a trend that shows no sign of ending
• Tighter competition, particularly from other domestic and international supplier sources, another continuing trend
• Market windows growing more narrow, thereby stopping or compressing product movement
• Ever changing consumer demand on product mix and varieties
• Continued downward trend producer numbers and acreage, "suburbanization" of production areas and associated escalation in land values (increasing operating costs for rented land) is becoming a critical factor
• Labor continues to play a significant role, two of four markets report that their producers use migrant labor. Labor supply and housing continue to be issues for two of the system's markets (Eastern Shore and Northern Neck).
• The Southeast market continues to struggle in attracting producers to the market and increasing the volume of produce raised in the region. The region traditionally has been a6crow crop" area- com, soybeans, cotton and peanuts. Recruiting and convincing farmers to shift from these traditional crops into produce has been difficult.

On the positive side:

• Virginia producers continue to be adept at changing both the volume and varieties of their product mix to meet consumer demand
• Generally higher produce prices due to extremely limited supplies
• Production meetings and grower educational sessions were held in regions served by all markets during winter months to educate growers on market demand and production techniques
• Good Agricultural Practices (GAP) and Food Safety Training Workshops were held in several market areas to enable markets and producers to attain consistent product quality and food safety standards which are being required by an increasing number of wholesale buyers
• The Eastern Shore of Virginia Farmers Market continued as an agricultural service center. The cooperative operator operates and manages the wholesale market and manages the Southeastern Potato Marketing Committee. Eastern Shore's cotton gin, Shore Gin &Cotton, Inc., renewed a lease on one brokerage office on the market site and outside management will oversee cotton ginning operations
• The Southwest Virginia Farmers Market has traditionally served as a traditional wholesale regional product operation in season and brokered non-regional product out of season. Tenants on the market have been able to improve regional producer's ability to enter the marketplace by maintaining a year-round presence in the marketplace
• The Northern Neck of Virginia Farmers Market enhances market volume by moving a moderate amount of non-regional product in early spring prior to Virginia's harvest season, which enhances their reputation and supply capabilities with their wholesale customers