Center for Profitable Agriculture

PROJECT HIGHLIGHTS | PRODUCTS ON THE MARKET

Value-Added Projects — Project Highlights — 7

	Farm Camping
	Farm Campsites
	Farm-Fresh Bottled Milk Marketing
	Farm-Fresh Dairy Products
	Farm Retail Sales & Agritainment Considerations
	Farm Tours for Children's Groups
	Fee Fishing
	Free-Range Chicken Production and Marketing
	Fresh Grain Baking Mixes
	Fresh Salsa
	Freshwater Shrimp

Farm Camping

A variety of regulatory issues face farm operations that propose to provide organized farm camp programs. Safety regulations for swimming pools, food inspections for meals and health regulations for waste disposal will all have to be evaluated by farm camping businesses. However, regulatory issues may very well be justified in areas of high demand for rural, hands-on-farm-camp experiences for youth and young people. Human resources should not be overlooked by potential farm camping projects. Quality supervision and motivating attitudes are good ingredients for farm camp operations as well

Farm Campsites

A preliminary financial and market analysis was performed to study the feasibility of developing a small campground on a rural Tennessee farm. Preliminary indications show that the costs associated with developing and operating the campground exceeded expected revenues from the venture. Visitation trends in the area around the proposed campground were analyzed by the CPA and found to have declined during the past year. The analysis of the visitation trends and cycles provided less than favorable estimated occupancy rates for the campground. However, the agri-entrepreneur is now well-positioned to track developments and monitor tourist traffic to determine if the project will be feasible in the future.

Farm-Fresh Bottled Milk Marketing

Successful value-added milk enterprises achieve a balance of critical processing and niche-marketing characteristics. In order to achieve a price premium above store-brands, farm-fresh milk products must be well adapted for and positioned to an identified target market. Farmer controlled milk processing and packaging must involve a manageable volume of input and output and an efficient, low-cost production/processing system. Rarely do successful farm-fresh milk enterprises result from “build it and they will come” marketing efforts – product attributes must be concisely and consistently promoted to consumers from multiple retail locations (both on-farm stores and traditional supermarkets/groceries). Dairy farmers that develop value-added milk enterprises must pay attention to consumer sensitivity to retail prices, on-farm verses supermarket sales, break-even prices and convenient product placement/accessibility to consumers. Farm-fresh milk products must have a well-defined product positioning strategy that is executed in all marketing efforts.

Farm-Fresh Dairy Products

The on-farm processing and marketing of milk and milk products is a segment of the dairy industry that has recently received significant consideration by farm families. However, consumer demand for these niche products appears to be fairly small and segmented. Little evidence exists to support an expectation of high-volume sales at prices outside prevailing milk and related product prices. The problem of fairly small expected sales is further compounded by the extremely large costs associated with processing equipment. Start-up and operating costs must be spread over the expected sales volume.

Farm Retail Sales & Agritainment Considerations

A variety of farm crops often do well in direct sales to consumers from the farm. Direct-from-farm sales can be enhanced even further through agritainment farming activities. In addition, overhead and operating resources for one enterprise can be used to support the development and growth of other complimentary enterprises. As is the case with many value-added agricultural enterprises, products and activities, greater chances of success are present with direct marketing and agritainment enterprises when fixed and overhead resources are spread over numerous income-generating activities. In addition, significant investments should be planned for merchandising strategies, development of salesmanship skills and marketing/promotion activities.

Farm Tours for Children's Groups

Hosting children groups at a farm as part of a commercial business requires more efforts than hosting your child’s class at no cost. Liability insurance, food preparation regulations and strict scheduling policies are just a few of the considerations needed. Normally when the decision is made to host groups for commercial farm tours, several start-up costs must be incurred. Because the admission charge for these types of operations tend to only be slightly above the variable costs, a large volume of tourists are often needed to recover the start-up costs. Farm-tour enterprises are often started as goodwill efforts and a way to educate the public, meet people and teach people about farming rather than make a lot of money. There appears to be a fine line between the total costs of operating a commercial farm tour business and the total revenues generated from such an operation.

Fee Fishing

As with any business, the development of a fee-fishing operation requires a delicate balance of production, marketing and financial management skill—not to mention excellent customer service. Potential fee-fishing operations must carefully consider the production of pond-size species, adequate facilities, area market potential, promotion and advertising strategies, liability, auxiliary activities (fish cleaning, snack shop, tackle sales, picnic & nature areas) admission fees, and proper pricing of harvested fish.

Free-Range Chicken Production and Marketing

“Free-range” chickens appear to be a growing interest of folks seeking alternative farm enterprises. More efficient production systems have recently been developed to streamline the free-range production process. However, processing constraints and marketing challenges seem to characterize the enterprise as a “small-farm” opportunity rather than a significant contributor to larger farm financial success. The custom processing of free-range chickens is technically infeasible because no existing processor in the defined region will consider processing any outside birds. USDA poultry-processing regulations include an exemption from USDA inspections for operations of up to 20,000 farm-raised birds that are processed on the farm and then sold directly to consumers. However, the profit potential from such a small enterprise may not measure up to the levels desired.

Fresh Grain Baking Mixes

Many value-added agricultural enterprises can provide opportunities for the combination of farm resources. For example, a portable antique grist mill that serves as a teaching tool for entertainment farming and agritourism events can also serve as the primary manufacturing tool for the production of specialty baking mixes from Tennessee-grown grains. While the specialty baking mix industry is considered a hobby industry, niche markets do exist for gourmet packaged specialty items. Combined with unique packaging and promotion, specialty baking mixes may compete well in gourmet food shops, specialty food shows, online markets and through gift basket sales. However, the development of such a product must include considerations of applicable food preparation regulations including Good Manufacturing Practices and state inspections.

Fresh Salsa

The development of a shelf-stable fresh salsa product can be difficult—not to mention the marketing obstacles. The CPA has completed a product sampling investigation for a fresh salsa project. A total of 204 respondents were asked to sample the fresh salsa product then complete a confidential questionnaire. The results of the questionnaire suggest that the specially blended fresh salsa product is very appealing to all consumer groups. This data was then transformed into presentation material that was used to pitch the product to area grocery stores/supermarkets.

Freshwater Shrimp

Opportunities may exist for growth in Tennessee's aquaculture industry. There has recently been substantial interest in freshwater shrimp production. Studies from the University of Kentucky provide an enterprise budget for freshwater shrimp that shows an annual net return to land, capital and management of $2,600 per acre. Climatic conditions in Tennessee, scope of investment, labor and management issues seem to support development of the enterprise. However, reliable and cost-effective marketing strategies must be developed. Successes in the marketing phase could poise Tennessee for development of a real aquaculture niche.