RD58 - Annual Report on the Virginia Farmers Market System


Executive Summary:
This report to the Chairmen of the House Committee on Agriculture, the Senate Committees on Agriculture, Conservation and Natural Resources, the House Committee on Appropriations, and the Senate Committee on Finance is required by § 3.1-73.5 B of the Code of Virginia.

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 entity.

For the 2006 harvest year volume and value of produce handled was steady to a slight increase as compared to 2005. Statistically the breakdown is as follows:

• 270 producers marketed product and/or used market services at the four markets (combined), compared to 269 producers in 2005.

• Gross value of products marketed was over $21.4 million representing over 2.51 million product units, compared to $19.1 million in 2005 representing 2.23 million product units.

• The markets served 6,631 acres in 2006, compared to 5,749 acres in 2005.

• The system served 60 brokers and 391 major retail stores and institutional buyers, compared to 72 brokers and 382 retail stores and institutional buyers in 2005.

Significant factors affecting production and marketing volumes for the past year as cited by the market operators in 2006 were, 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 existed for some of the state’s regions.

• 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.

• 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.

• 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 of the market have been able to improve regional producers’ ability to enter the marketplace by maintaining a year-round presence.

• 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.

On the negative side:

• Increased fuel and input costs cut profitability dramatically.

• Extreme weather volatility affected some growing regions with a cold wet spring; an early summer followed by extreme heat and drought and a very wet fall season. Other regions experienced an excellent growing season after a wet spring.

• 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 in 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, especially for the Eastern Shore of Virginia Farmers Market. However, this trend is showing in other areas served by the farmers market system, except in Southwest Virginia.

• Labor continues to play a significant role, three of four markets report that their producers use migrant labor. Labor supply and housing continue to be issues for the Southwest Virginia, Eastern Shore and Northern Neck of Virginia Farmers Markets.

• 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 a “row crop” area – corn, soybeans, cotton and peanuts. Recruiting and convincing farmers to shift from these traditional crops into produce has been difficult.