partners in the National Food Hub Collaboration for their leadership and guidance:

Marty Gerencer, Morse Marketing Consultants and National Good Food Network

Benjamin Vitale and Mike Janis, National Association of Produce Market Managers

Steve Davies and Kelly Verel, Project for Public Spaces

Errol Bragg, Carlos Coleman, Adam Diamond, Nina Fallenbaum, Andrew Jermolowicz, Lucas Knowles, Mark Lipson, Stephanie

Ritchie, Colleen Rossier, and Wendy Wasserman, USDA’s Know Your Farmer, Know Your Food Regional Food Hub Subcommittee

The authors also wish to acknowledge several colleagues for providing guidance and direction for the National Food Hub

Collaboration, and for their research contributions:

Joe Colyn, Originz, LLC

Carolyn Dimitri, New York University

Erica Block, Local Orbit

Kate Clancy, Food Systems Consultant

Bob Corshen, Community Alliance with Family Farmers

Gail Feenstra, University of California, Davis

Chris Harmon, Center For Agricultural Development and Entrepreneurship

Alan Hunt, Local Food Strategies

Rebecca Jablonski, Cornell University

Jim Matson, Matson Consulting

Will Meadows, Lawrence University

Gary Peterson, Agriculture and Land-Based Training Association

Kathlyn Terry, Appalachian Sustainable Development

Steve Warshawer, Benecial Farm CSA

Benjamin Vitale, Central New York Regional Market

Tatiana Garcia-Granados, Common Market

Christa Sorenson, Co-op Partners Warehouse

Katie Peterman, CROPP Cooperative

Ginny Crothers and Sandi Kronick, Eastern Carolina Organics

Dan Carmody, Eastern Market Corporation

Sheri Grin, Farm Fresh Rhode Island

Laura Avery, Santa Monica Farmers Markets

Jim Crawford and Je Taylor, Tuscarora Organic Growers Cooperative

Kevin Lyons, Walsma and Lyons

The impetus for this guide and the

work it reects originated with the

establishment of USDA’s “Know Your

Farmer, Know Your Food” (KYF2) Initiative.

Managers,

and the New York City-based

nonprot Project for Public Spaces.

Since its establishment, the National

Food Hub Collaboration has worked

recognize that regional food hubs on

their own will not be able to solve the

myriad of distribution challenges—not

to mention production and processing

challenges—that hinder producers’

abilities to take full advantage of the

growing consumer demand for locally

grown food. This will require greater

by a set of business practices and not by

also help philanthropic foundations,

public agencies, lending institutions, and

economic development organizations

understand the nature, function, and

operating models of food hubs, helping

them to engage hubs in their areas.

Both newly established and more

seasoned regional food hubs have

systems funders, planners, businesses,

researchers, and service providers,

there is a need to clarify exactly what a

regional food hub is and what it is not.

The rst section of this guide provides

the answers to some of the most

frequently asked questions about

the food hub concept and its role in

regional food systems development.

impacts are regional food hubs having

in their communities. Although there

is still much work to be done in this

area, this section illustrates the myriad

of ways that food hubs are exerting

positive impacts on local community

development and quality of life.

5 Both USDA and the Wallace Center have Web sites dedicated to research on and resources for regional food hubs. Visit the USDA Web site at

z In a 2011 survey of nearly 1,800 chefs, locally grown foods was picked as the top restaurant trend for 2012, which is

z In January 2011, Bon Appetit Management Company, which runs more than 400 corporate and university cafes in 30

z The number of farm to school programs, which use local farms as food suppliers for school meal programs, totaled

“A much higher proportion of people eat

locally grown foods than organic foods. When

they think local, they think fresh and want to

support local growers/packers.”

- National Grocers Association’s 2011

Consumer Survey Report

be used for other purposes to generate

revenue in the o-season. Furthermore,

wholesale buyers need products

throughout the year; food hubs that oer

similar quality non-local products during

the o-season are better positioned

to keep the buyers engaged and

committed to their business relationship.

Nevertheless, with continued

improvements in season extension

time for food hubs to deal exclusively

in local and regional food products.

In many parts of the country, wide

gaps exist in local distribution and

processing infrastructure, making it

dicult for small and mid-sized growers

distribution system is not adequately

addressing—the aggregation and

distribution of food products from small

markets). Additionally, because food

hubs provide a number of additional

services that build the capacity of local

producers and also engage buyers and

beginning to view food hubs as critical

they can meet the market demand for

locally and regionally grown food.

14 For a case study of Sysco’s partnership with food hubs in Michigan, see Sysco’s Journey from Supply Chain to Value Chain at the National Good Food Network’s

Web site: ngfn.org/resources/research-1/innovative-models/

communication, data sharing, and

inventory management tools that are

tailored to meet specic local needs.

Regional food hubs are taking advantage

of these technological tools, enabling

them and their partners to share

information almost instantaneously,

have a virtually real-time picture of

their business operations, and carry out

transactions at the click of a button.

might be best thought of as “relationship

creators,” which give producers the

and sellers to introduce themselves to

that may lead to business transactions,

the actual transactions themselves

do not take place on the electronic

platform. The transaction and the

prefer to deal directly with producers

without using the services of food

hubs. Examples of such “relationship

creator” tools include Market Maker

15 national.marketmaker.uiuc.edu

16 food-hub.org

17 localdirt.com

18 localorb.it

Although the primary focus of the

National Food Hub Collaboration

research to date has been to

understand the characteristics,

more local food procurement at a larger

scale, which can create jobs, generate

business taxes, and increase earnings

throughout the region as production

increases locally. Various studies have

examined the local economic impacts

of shifting food purchases to local

food. A study conducted in Northeast

Ohio found that if the 16-county

Northeast Ohio Region were to meet

1 in 8 unemployed residents, as well

as increase annual regional output

by $4.2 billion and increase State and

local tax collections by $126 million.

annual sales growth. For example, the

Oklahoma Food Cooperative, which

started in 2003 with 36 consumers

and $3,500 in sales in its rst month

21 See Appendix 4 for more information on research conducted by the National Food Hub Collaboration.

22 Masi, B., L. Shaller, and M. Shuman (December 2010). The 25% Shift: The Benets of Food Localization for Northeast Ohio and How to Realize Them.

www.neofoodweb.org/sites/default/les/resources/the25shift-foodlocalizationintheNEOregion.pdf

23 Dane County Planning and Development Department (September 2011). Southern Wisconsin Food Hub Feasibility Study.

pdf.countyofdane.com/Purchasing/RFI__111101_Packing_House_Study.pdf

24 blogs.usda.gov/2010/12/16/oklahoma-food-co-op-from-buying-club-to-food-hub

25 Community Food Enterprise: Local Success in a Global Marketplace. (2009) The Wallace Center at Winrock International and Business Alliance for Local Living

Economies. www.communityfoodenterprise.org/download-the-book

As food hubs become more successful at

scaling up the production and delivery

of local food, economic gains have

been realized in some communities

Regional food hubs create jobs

directly, for the operation of the hub,

and also indirectly, as a supportive

environment for job opportunities

for the region—including agricultural

As food hubs grow and reach more

producers and buyers, job opportunities

within the food hub will continue to

increase. For example, Farm to Family

condence that their product will nd

a ready market outlet at an acceptable

price point, which ultimately provides

them with more economic security.

Local Food Hub, Tuscarora Organic

Growers Cooperative , and Intervale

Food Hub are just a few examples of

food hubs that have adopted this model

of collaborative planning. By working

with buyers to make projections on

35 www.albafarmers.org

36 ALBA Biennial Report (2009-2010). albafarmers.org/2011-06/alba-Biennial-Report-2009-2010.pdf

gures and pricing data help producers

develop a strong business plan.

Similarly, Tuscarora Organic Growers

a greater share of the retail price than

they did from a mainstream food supply

chain,

per unit in local chains ranging from

roughly equal to more than seven

times the price received in mainstream

chains.

that food hubs are helping producers

get better prices for their products:

participating growers and 25 percent

to food hub operations. It also surveys

its producers every year to make sure

they are satised with the prices that

TOG pays and it evaluates market pricing

twice a week to determine a competitive

and fair price for its producers.

Jim Crawford, owner of New Morning

built it, we’re very proud of it,

and it certainly enhances the

protability of our farms. We—

the grower members—own

the business, set its policies,

and share in the prots. By

planning our crops together,

by pooling our produce, and

by sharing the use of the

co-op’s sta and services, we

Intervale Food Hub works collaboratively

with its producers to determine prices

for their products based on actual

production costs for the producers

and what the market can realistically

bear. As a result, Intervale producers

generally net about 60 to 70 percent

ensures that 80 percent of the price paid

by buyers goes back to the farmer.

to make sure they are satised with the

prices they receive. Through the 2010

survey, where producers were asked to

rate the prices from poor to excellent,

Local Food Hub found that 100 percent

of its producers rated the prices they

received from fair to excellent.

By oering producers larger sales

38 Schmidt, M.C, J.M. Kolodonisky, T.P. DeSito, F.C. Conte. (August 25, 2011) “Increasing farm income and local food access: A case study of a collaborative

aggregation, marketing, and distribution strategy that links farmers to markets,” Journal of Agriculture, Food Systems and Community Development

39 King, R.P., M.S. Hand, G.D. DiGiacomo, K. Clancy, M.J. Gómez, S.D. Hardesty, L. Lev, E.W. McLaughlin (June 2010) Comparing the Structure, Size, and Performance

of Local and Mainstream Food Supply Chains. U.S. Department of Agriculture, Economic Research Service. www.ers.usda.gov/Publications/ERR99/ERR99.pdf

40 Correspondence with Jim Crawford, Owner of New Morning Farm, September 22, 2011

41 Schmidt, et al. (2011)

42 Barham, James (2012). Regional Food Hubs: One Solution for Overcoming Barriers for Local Producers. Presentation at the Agricultural Outlook Forum. February 24,

Washington, D.C. www.ams.usda.gov/AMSv1.0/getle?dDocName=STELPRDC5097265

43 Ibid

its member producers indicated that

they had intended to retire or move

into conventional cotton production

before working with ECO. Since the

sustainable or environmentally sound

agricultural production practices.

An important amenity provided by

many food hubs is free access to

formal and informal training and

mentoring opportunities designed

to help producers at all scale levels,

from beginning, transitioning, and

limited-resource farmers, to mid-scale

commercial farm enterprises looking

to increase their retail and foodservice

revenue streams. By virtue of the active

discovering on their own. In the 2011

of the food hubs reported providing

production and post-harvest handling

training to producers. Almost 40 percent

indicated that they provide both. Here

are just a few specic examples:

in Abington, VA, oers its Appalachian

Harvest producers training, mentoring,

consultations, and farm visits on a

variety of subjects, enabling them to

44 Interview with Sandi Kronick, CEO, Eastern Carolina Organics, January 26, 2011

45 Schmidt, M.C., A. Matthews, D. Farrell, G. Mattessich, J. Kolodinsky. Evaluation of the Intervale Food Basket: Perspectives from Participating Farmers. (December

2009). mysare.sare.org/mySARE/assocles/9022865.%20Food%20Hub%20Farmer%20Evaluation%20(2010).pdf

46 avormagazinevirginia.com/localfoodhub

local supply networks. In the past 3

years, Appalachian Harvest sta have

conducted 326 farm visits and organized

75 training workshops and producer

Each year, between one and three new

farm businesses join the program as

incubators, receiving subsidized rental

rates, business planning support, and

mentoring from established growers.

Through their “Success on Farms”

program, Intervale oers a 2-year

business planning program to 10

to 15 farmers throughout Vermont

every year, working one-on-one with

revenues. The Intervale Center has also

partnered with New Farms for New

Americans to help refugees create their

own successful farm- and food-based

businesses by developing training

curricula and working with farmers

one-on-one to help them improve

their business and marketing skills.

other market channels in which they

participate but which comprise a smaller

portion of their overall sales. Including

both primary and secondary markets,

to oer a greater variety of o-season

products and keep buyers engaged

on a year-round basis. A few of the

food hubs interviewed intend to obtain

their economic viability and help them

contribute to job creation and market

development, the following areas of

assistance need to be addressed:

options that are beginning to emerge

programs. These low-interest loans

could be (and often are) accompanied

by hands-on technical assistance to

support the sustained success of the hub.

investments or gift capital, such

as those that could be sourced at

acceptable terms from cooperative

membership, local community investing

Greater creativity and innovation are

needed to position food hubs so they

can more quickly adapt to an ever-

changing marketplace. Innovation

is needed in areas such as nancing,

stated goals. Private foundations and

government entities both have a role

to play by providing seed money to

“on the ground” pilot projects, which

would allow for more experimental

approaches in food hub development

and explore how economic, social, and

environmental goals could be better

intertwined in food hub activities.

Many food hub operators need training

in aspects of business development.

Because food hub businesses try to

be scally sound and attain certain

social and environmental goals,

balancing these demands in a single

business plan can be a very complex

and daunting endeavor. The success

of food hubs could also be enhanced

by the availability of examples of food

into potential markets and products,

anticipated volumes of product handled

over time and their revenue, and

the operating and investment costs

70 Communities of practice are groups of people in organizations who come together to share what they know, to learn from one another regarding some aspects

of their work, and to provide a social context for that work. For more information, see www.leopold.iastate.edu/sites/default/les/copresourceguide.pdf

start-up and operating costs, and

so on. This type of information is

essential for any food hub business

plan. Although each food hub has

its own unique footprint based on

its product mix, scale of operation,

and the region it serves, general

information on facility, infrastructure,

and equipment requirements would

be useful to most food hub managers.

For food hubs to reach their full

economic, social, and environmental

impact, it is essential they engage

and nonprot stakeholders directly

involved in supporting food hub

food buyers; distributors; retail

stores; foundations interested in

sustainable agriculture, rural economic

development, and nutrition; and

Food hub operators indicated that

ongoing outreach mechanisms such as

face-to-face and online communities

of practice would assist them in

educate key and potential partners.

Food hub communities of practice at the

local and regional level are starting to

emerge and have the benet of bringing

to the table a set of stakeholders who

can work together and engage in

business activity even after a meeting is

done. Examples of this can be seen in

Chicago, where Fresh Taste Initiative has

facilitated a Great Lakes regional network

of enterprises, in the Northeast with an

Regional Food Hub Network. In

addition, a national community of

practice would help facilitate the

needs around investment, innovation,

As food hubs continue to gain

momentum and expand their

operations, one of the primary needs

is accessing capital and support for

to working capital and physical

infrastructure improvements. This

section is dedicated to helping

food hub operators and supporters

understand and navigate through

the variety of nancial and human

resources available to them.

programs (20 programs from USDA

alone) that either have a proven track

record or have the greatest potential

to fund food hub work. Table 1 on

page 35 lists each program’s eligible

applicants and funding activities.

It is important to keep in mind that

many Federal funding opportunities are

administered through State or regional

agency oces. For example, many of

the funding opportunities available at

USDA’s Farm Service Agency, Natural

Resources Conservation Service, and

Rural Development agencies are

Food hub operators and their partners

are also strongly encouraged to contact

grant program personnel to ensure

their eligibility prior to applying for any

program; grant focal areas and eligible

entities can change from time to time.

and other pertinent information. A

be found at Sources of Funding

Centers,

information in researching and preparing

government grant applications.

While it is important to pay attention to

program eligibility requirements, don’t

be overly restrictive in determining

whether or not a particular grant

program is suitable. It’s also important

to take an expansive approach to

funding opportunities—be creative and

resourceful! For example, some of the

grant programs listed in this guide may

best be used by food hub operators

through partnerships with an eligible

review several other excellent guides and

Web sites when investigating funding for

food-related enterprises (see Appendix

5). Particularly useful is USDA’s Know

Your Farmer, Know Your Food

site, which provides a comprehensive

list of funding programs that support

centralized Governmentwide portal.

Registering with Grants.gov is an

essential rst step in the application

submission process. Organizations

applying for a Federal Government

grant will usually be required to

have a Data Universal Numbering

System (DUNS) number,

73 www.sba.gov/about-oces-list/2

74 www.cooperationworks.coop/

75 www.usda.gov/knowyourfarmer

76 www.grants.gov

77 fedgov.dnb.com/webform

78 www.irs.gov/businesses/small/article/0,,id=98350,00.html

79 www.bpn.gov/ccr/default.aspx

Philanthropic foundations have a

growing interest in local and regional

food systems and their relationship to

some notable exceptions discussed

below—explicitly support food hub

projects in their program descriptions.

Philanthropic foundations tend to

place a priority on funding a body of

work that will lead to particular set of

desired outcomes or impacts rather

than awarding grants to particular

types of activities. Consequently,

when preparing grant proposals

concentrated impacts, such as improving

access to healthier food in a specic

neighborhood, to those of a regional

scope, such as preserving farmland and

an exhaustive list. More information

about these foundations and others

can be found at Sustainable Agriculture

and Food Systems Funders.

80 bit.ly/grantmakers-guide

81 www.safsf.org/who/directory.asp

82 bluemoonfund.org

Market in Philadelphia was awarded

a $1.1 million grant from the Kellogg

Foundation to expand the impact of its

food hub. Among the activities funded,

hundred years located in the center of

vision are attractive to dierent funders.

Capital improvements to the market

Detroit—the Kresge Foundation, the

Foundation—have been key supporters.

EMC has also received modest nancial

research agreement. Each funder

has a slightly dierent reason for

wanting to improve the market:

Kresge Foundation’s Community

Development program aims to create

opportunities and improve the quality

of life for underserved and marginalized

populations. The program has a primary

focus on Detroit, making the Eastern

83 www.smallfoundations.org

for them (such as RSF)—that support

the foundation’s mission. They usually

are repaid with interest and within an

established timeframe. Even though

a growing number of foundations are

establishing PRI options, they remain

dicult to access. However, the work

of organizations like RSF and others is

making it easier to secure a PRI, and we

expect to see more activity in this sector

Whole Foods Market has a Local

Producer Loan Program

beginning, and small farmers in the

country. Under the current structure,

only farmers can receive an FCS loan.

Each independent lender in FCS has its

own level of understanding of food hubs.

The Farm Credit Council (FCC), a sister

organization to FCS, is working hard to

build understanding among lenders. For

example, FCC has worked with partners

to develop the Field Guide to a New

markets and populations, and often oer

less-than-market rates and signicant

technical assistance. CDFIs are certied

by the U.S. Treasury Department. They

89 cd.org

90 thecarrotproject.org

91 www.kickstarter.com

92 www.indiegogo.com

93 www.profounder.com

94 www.nanceforfood.com

95 www.familyfarmed.org/FinancialResources

96 www.safsf.org