by Tamara M. Freund
Extension intern
Iowa State University Extension to Communities
The job description of the farmer is changing again and with this change is a promise of hope for the future.
Adding to their already long list of competencies, farmers are becoming involved in processing and marketing the products they grow. The job of the farmer extends beyond the harvest of the grain and beans or the maturity of the steer and chicken. Studies have shown that food processors and marketers received an average 14 percent return on equity, while farmers receive an average 2 percent return. Today's farmers are flexing their financial muscles and using marketing savvy to gain more of the food dollar through value-added agriculture.
Just what exactly is "value added" agriculture? Iowa State University Extension defines it as strategies by which Iowa agricultural commodities such as crops or livestock are transformed into products of greater perceived value by the consumer and result in expended economic growth for Iowa.
For example, instead of selling raw soybeans, some farmers are processing them locally and selling them more profitably as tofu to specific markets. The additional step adds a greater return, enabling the farmers to generate more economic flow back into the community. Farmers need not change occupation or acquire a second job to make more money, but instead can involve themselves in value-added agriculture.
"Value-added agriculture has enormous potential for agriculture producers interested in alternative crops, niche markets, organic or environmentally oriented production and commodity processing cooperatives," said Mary Holz-Clause, ISU Extension industrial specialist. "Individuals can join the value added movement by devoting a small acreage to specialty crops or join in with others to develop processing facilities for their bulk commodities."
Some organizations already have been successfully established in the state creating a beneficial impact on Iowa communities, according to George Cummins, ISU Extension field specialist. For example, Iowa Producers Cooperative, a group with more than 100 members throughout the state, is exploring how farmers can work together to add value to their products. Marlyn Jorgensen, board member of Iowa Producers Cooperative, said, "The mission is to improve profitability of farming by exploring new opportunities to add value to their product."
Value-added agriculture is taking many forms in Iowa. Currently, the main projects are producing specialty soybeans for export markets, processing soybean oil as an industrial lubricant for hydraulics and constructing an ethanol plant for corn processing.
In some Iowa communities, corn processing and alcohol plants are underway, while in other communities livestock producers are getting a premium price for a high quality product delivered directly to the consumer. A cooperative marketing of swine is also taking place among several producers enabling a boar stud to be shared among several farms. Another group is growing and delivering farm fresh garden product to individual households in cities on a bi-monthly basis. Corn and soybean producers are adding value by producing for specific markets, such as high lysine corn or low linolenic acid beans. Other producers are planting specialty crops such as herbs and spices, blue corn, wild flowers and strawberries as a special niche in the agriculture markets.
The Iowa legislature recently developed a new operating structure for cooperatives, identified as Chapter 501, with the vision that adding value to local production will lead to more jobs, greater economic activity and stronger rural communities.
Farmers participating in an area of value-added agriculture have many resources available to help from the start to the finish of the projects. ISU Extension has teams of specialists who can help co-ops and individuals develop feasibility studies and market plans. Extension specialists also can help with some technical aspects of plan development and operation, as well as assuring quality inputs from producers and market development.
Networking among members of value-added co-ops is important. New projects and activities can be shared among producers working toward educating each other. The common elements in their success include local leadership, sufficient start-up capital, proven management expertise, a favorable political environment and a cooperative group focus.
Adding value to local production will lead to more jobs, greater economic activity and stronger rural communities. It is a win-win situation for everyone concerned, according to Jorgensen of the Iowa Producers Cooperative. The farmers are earning more, the demand of the consumers is being met and communities are benefiting from the employment and increased economic flow.
Contacts:
Terry L. Besser, ISU
Extension Sociology, (515) 294-6508
Del Marks, ISU Extension
Communication Systems, (515) 294-9807
