In Edible-Alpha® Podcast Episode #10, Tera talks with Tara Roberts-Turner, General Manager of the Wisconsin Food Hub Cooperative about what it takes to run a food hub. The Wisconsin Farmers Union and 7 farmers started the Hub with the core belief that the best way to get the Hub off the ground was to include some medium-to-large scale farms that had mechanization and were already selling into the wholesale market. Tara’s farm, like most involved in the Hub, has been in the family for multiple generations. The Hub now includes 41 member farms and allows those farmers to access wholesale markets while sharing costs and knowledge around food safety/insurance, ensuring constant supply to buyers through multiple farms producing at least some of the same crops, and by providing a direct relationship to the buyer rather than through a distributor.
Tara talks about how the Hub realized it needed to reach at least $3.3 million in sales to break even, and the Hub broke even on a net income basis in 2016 despite the poor prices for produce. To maintain their margins, they built the Hub’s capacity through adequate staffing while also only spending on essentials and taking advantage of their uniquely cheap warehouse space of $800 per month for a 10,000 square foot facility. They also maintain their margins by having their warehouse serve only cooling and aggregation/distribution functions, rather than other forms of value-added processing that would require them to sell millions more dollars of produce every year to cover the added staff, warehouse and quality assurance capacity needed. Because they are farmer-owned and governed, they often work with their farmers to navigate questions of production while produce prices are depressed as well as things like deferred payments to farmers to help with seasonal cash flow issues for the Hub.
Tara expects the Hub to grow between 40% and 60% in 2017 with continued, more modest growth thereafter and hopes to share the model of the Hub with others through the Wisconsin Farmers Union once they sustain profitability in the coming years.