Fruit &Vegetable Marketing

AG BM 102

Introduction

• Must have a market first

• Some important PA fruit & vegetables

• Potatoes, tomatoes, processing vegetables

• Fruits – apples, peaches, cherries, plums, grapes

• Some farmer’s market and wholesale production

Consumption trends

• Canned in long-term decline, except tomatoes & applesauce

• Frozen stable

• Fresh growing

Important factors

• Perishability

• Price/quantity risks

• Seasonality

• Alternative product forms/markets

• Product bulkiness

• Geographic specialization

• Quality and grades

Leola Produce Market

Fresh Marketing Channels

• Shipping point markets – Leola - Buffalo Valley Produce Auction (Mifflinburg)

• Wholesale terminal markets – Philadelphia – New York - Baltimore

• To supermarket chain – local foods

• Farmer’s markets

• Roadside markets

• Community Supported Agriculture

Ag Tourism

More channels

• Tomato broker

• Green bean broker

• Cooperatives – Tuscarora Organic Growers

• Southwestern vegetable cooperative

• Apples have a scale advantage from regional specialization that carries over to other tree fruit

Processed markets

• Potato chips• Furman Foods - tomato products• Hanover Foods – frozen & canned vegetables• Knouse Foods – applesauce - coop• Contracts usually required – very specific• Economies of scale• Length of season• Small-scale processing – Tait Farm

Vinnitsa, Ukraine

Grapes

• Table grapes – are there any in Pennsylvania?• Concord grapes – National Grape (Welch’s)• Wine grapes – make your own wine or sell to

winery – Wine marketing – many local wineries

• Very long bearing period and high up-front costs

• Can you get a contract?

International trade

• Sinaloa and Nogales

• Chile and Philadelphia

• Hanover Foods and Costa Rica

• Broccoli and Guanajuato

• Four Seasons Produce

• Lots of exports of apples, but imports of apple juice

Marketing Costs

• Leola – 8% commissions, box costs 67 cents

• Direct marketing – very expensive – Scale important– Length of season – try to broaden product mix,

flowers, ice cream, corn maze, produce from others

– Erie peach grower

Concluding comments

• How will you sell it?

• Is there a local buyer?

• Can you direct market?

• Can you satisfy the requirements? – labor, quality, timing, management

• Can you get a contract?

Concluding comments

• How will you manage the growing season?

• How will you ensure continuing relations?

• What do you do with your low quality production?

• What do you do with what you can’t sell?