Sustainable Agriculture Literature Review - Boulder County

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11.5 Direct Marketing
One of the challenges faced by small farms is finding markets for their products. Since
wholesalers offer low prices and shipping products is costly, wholesale is not favorable
for small-farm operations. Rather, supporting direct marketing schemes is important for
sustaining these operations. However, managing the logistics of direct marketing
schemes has its own set of challenges.
863, 864
Challenges associated with direct marketing include:
! Less-than-desired sales volume for customers
! The seasonality of crops
! The lack of grower flexibility in meeting quick changes in customer demand
! Potential inability of grower to meet volume demand
! Competitive pricing offered by wholesalers
! Vendor bid systems/contracts that exclude local producers
! Requirements of customers to obtain food through government programs
! Insurance requirements for vendors
! Lack of discretionary budgets for customers
! Lack of discretion to pay higher prices for higher quality food
! Associated with increased hassle (more phone calls, coordinating pick up,
inconsistent supplies, etc.)
Overall, larger restaurants and institutions are less likely to purchase local food than
smaller ones. Whether restaurants and institutions do or do not buy local food, they are
highly concerned with its freshness and dependability. Restaurants that buy locally are
significantly more likely to do so in order to support the local economy and are typically
interested in pesticide-free food. 865 While price is a concern when purchasing food, it is
not one of the primary reasons for customers deciding whether or not to purchase
locally. 866 Quality is currently not a significant factor in buyers’ decisions generally due to
a lack of awareness about the potentially higher quality of local produce. If local farmers
are more assertive about their higher quality of products and services, they may appeal
more to local buyers. 867
Market for Organic Products
Organic farming, as defined by USDA standards set in 1990, has grown in the past
decade. Nationwide, organic acreage increased 4.5 times between 1992 and 2007, from
935,450 to 4,289,957 acres. In 2007, 0.53 percent of Boulder County acreage was
devoted to organic production, including land in the process of being converted, which is
slightly higher than the state of Colorado at 0.33 percent. 868 These numbers are
relatively consistent with U.S. percentages: 0.7 percent of U.S. cropland and 0.5 percent
of pasture were certified organic in 2008. 869
Such low percentages are attributed to a number of tradeoffs. Organic agriculture is
associated with lower input costs, conservation of nonrenewable resources, capturing
high-value markets, and boosting farm income. At the same time, there are a number of
obstacles, including high managerial costs, risks of shifting production methods, limited
awareness of organic farming systems, lack of marketing and infrastructure, and an
inability to capture marketing economies. 870
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