Regional food systems can drive economic growth by providing jobs and supporting food businesses in rural and urban areas, but ensuring success requires a coordinated blend of policy and finance.

A new book commissioned by the USDA and the Federal Reserve explores that topic and bumps up against a stubborn truism: Consumers are vitally interested in where their food comes from and want to support local farmers and food businesses, but plugging into the finance, transportation, storage and processing infrastructure is tricky.

Which comes first, the chicken flocks or the poultry plant? The successful family farm, the processing and distribution jobs, or the healthy food at the local store, farmers’ market or institutional food service?

The editors of “Harvesting Opportunity: The Power of Regional Food System Investments to Transform Communities” said the payoff for solving that puzzle is worth it.

Policies that support the development of regional food systems “not only contribute direct economic benefits to the community, but can also open the door for improved access to healthy food,” they wrote, which can improve community health and result in a more productive workforce.

One of the experts tapped to contribute to the study was Lauren Gwin, an assistant professor at Oregon State University who specializes in regional food systems, supply chains for small and alternative farms and niche meat processing.

She and Nick McCann of Michigan State University’s Center for Regional Food Systems co-wrote a chapter, “Use It or Lose It: Local Food, Regional Processing and the Perils of Unused Capacity.”

Gwin and McCann argue that producers should “try in every possible way” to co-pack with existing processors before investing in new facilities themselves.

“Many small meat processors have been built because from the producers’ point of view, existing facilities were too expensive, too far away and too busy during peak times of year,” they wrote.

While those are valid concerns, “new facilities often struggle and fail because of insufficient demand for their services.”

“Infrastructure is expensive and you need to keep it moving,” Gwin said in an interview.

At the same time, some existing processors aren’t willing to work with local producers, and “Consumer demand for local food that requires processing goes unmet.”

The authors said the market must be the primary focus for producers thinking about making the jump into processing. Starting with business “incubator” sites or co-packing provides a testing ground for new food products and is an essential first step, they said.

“This is true even if the co-packer is far away, expensive, hard to schedule or all three,” Gwin and McCann said. “Those expenses are real but minor compared with the cost of a new facility.”

There are exceptions, of course. The authors said producers and processors must approach the “mismatch” between required scale and supply volume with thoughtful planning and management.

They note some Pacific Northwest examples.

Stahlbush Island Farms in Corvallis, Ore., vertically integrated pumpkin processing with its farm operations. Because the equipment was used only 60 to 75 days a year for pumpkins, the farm began making carrot and broccoli puree as well. To make it work, Stahlbush focused on selling to customers willing to pay a premium price, according to the authors.

Island Grown Farmers Cooperative provides USDA inspected animal slaughter in San Juan, Whatcom, Skagit, Island and Snohomish counties in northwest Washington, plus meat cutting, wrap, storage and limited retail sales.

A group of sustainable wheat producers developed markets for their flour and have plenty of milling capacity, but need seed cleaning and storage and oil pressing facilities for the rotational crops that are essential to their production systems, the authors said.

In an interview, Gwin said Kalapooia Valley Grass Fed Processing, in Brownsville, Ore., is an example of a processor seeking the right facility size and pricing structure. The owners process their own lambs, but also those from other producers.

“One of the points we make in the chapter is that there are different services, different scales and they go into different markets,” Gwin said.

“Harvesting Opportunity” was published by the Federal Reserve Bank of St. Louis, the Board of Governors of the Federal Reserve System and the USDA’s Rural Development and Agricultural Marketing Service agencies.

Online

Read “Harvesting Opportunity: The Power of Regional Food System Investments to Transform Communities” at http://bit.ly/2fbGIZG