Conference Presentations

GETTING TO PROFITABLITY: A RENAISSANCE IN NEW YORK STATE OF AGRICULTURE

Nathan L. Rudgers, Commissioner, New York State Department of Agriculture and Markets

Time and Venue: 7:40 - 8:15 p.m., April 5 - Stuac Theater

Despite many challenges, agriculture in New York State is poised to be a growth industry. Under the policies of Governor George E. Pataki, New York farms have experienced reduced costs of production and new investments in programs that address new product development, farm management, marketing, and environmental stewardship. Commissioner Nathan L. Rudgers has spent the last two years helping implement the Governor's vision at the Department, injecting new vitality and energy at the Department and providing new leadership for the industry.

Commissioner Rudgers' message was clear: New York growers must challenge themselves to change. In a fast-paced world of global competition, changing consumer demands, and increased community pressures, agriculture in New York will not survive if it does not adapt to the changing marketplace and world around it. Growers must commit themselves to either being the low-cost producer, or find ways to get closer to the consumer. They will also need to explore alliances in places they might not have considered before. Policymakers will need to help also, providing growers with more adequate tools and making investments in the two most important resources it has: land and people.

Agriculture is a $3 billion industry in New York, ranking in the top 10 in several commodities. However, the numbers are not reflective of the incredible diversity of products grown here. There are many advantages to farming in New York, but our industry is facing many challenges - low commodity prices, bad weather, increased competition both locally and globally, loss of control due to buyers and suppliers consolidating, increased costs of doing business, and increased development pressures.

But just as New York's industrial economy is now transitioning to high-tech after facing substantial challenges, New York agriculture will also have to change. It can do so by exploiting its strengths, such as:

• Land and water - relatively inexpensive, fertile, and well-watered farmland

• People - the smartest, hard-working, and most dedicated anywhere

• Proximity to markets - New York is surrounded by the richest market in the world

• Educational resources - strong, committed educational institutions

• Policy -Governor's commitment to and Legislature's support of agriculture.

Commissioner Rudgers focused on how more effective federal farm policy and continuation of the Governor's successful policies can position New York to be the premier supplier of agricultural products to both local and global markets. He also suggested issues that need further attention, such as:

• Finding ways to keep land in production agriculture

• Attracting more young people into farming as a career

• Marketing New York as a great place for agribusiness investment

• Explain to the public why the prosperity of New York agriculture matters to them.

Commissioner Rudgers also discussed the important role of New York's educational facilities, such as Morrisville State College, in providing research and technical support to the industry and training the next generation of agricultural industry leaders.

John M. Kohan, President and Owner, Food Tech

Time and Venue: 10:45 - 11:30 a.m., April 6 - Labclass 105

Packaging food products can be expensive. It could cost you upwards of $500,000 from initial idea to a test at the local supermarket. Market research, survey work, process development work, regulatory compliance and license fees, slotting fees, distributor fees; the $'s add up quickly. Competition is fierce - there are three times more products than available shelf space. Do your homework, be informed, be responsible, have liability insurance - your name is on the product.

Homework/Groundwork: Just because we all eat, doesn't mean that we know all about formulating, packaging, and marketing food products. Successful food product marketing and packaging is related to doing your homework. Much groundwork is needed before putting your product out into the marketplace. A checklist needs to be designed which will cover key points including, but not limited to, ingredients, potential volume, proper formulation, quality specifications, and utilizing the proper type of packaging for your product. You will need to do consumer testing to determine target population - who will be buying these products; seniors, teenagers, business professionals, etc.? Making sure you know your market is of prime importance.

Market Survey Work: Look at the products already out in the marketplace, look at the packaging; look at the prices products are being sold for; look at the type of packaging - glass, plastic, cardboard, etc. Decide if you want a dry mix product, or frozen, refrigerated, dehydrated, liquid or concentrate. Gather your facts and do your research. Supermarket research is a great aid to determining packaging preferences - before a product makes it onto a supermarket shelf, it has usually been thoroughly tested as to taste, appearance, shelf stability and consumer acceptance, which has sometimes taken several years to compile. Use your local library for reference materials on packaging resources.

Establish the Proper Recipe: Develop or combine the proper ingredients and determine preservation requirements to make the finished product that your customers want. This is trial and error (bench top) work; making small batches of the product and establishing specifications (how the product should be processed) to assure that it has a good shelf life. Use common ingredients. Manufacturing recipes that contain unusual ingredients can cause delays because your co-packer may not be familiar with ingredients having unique characteristics. Each ingredient has specifications that establish quality control standards. Make sure you check packaging specifications to verify your container will work with your product.

Manufacture the Finished Product: This can be performed by you either in your own establishment or by going to a co-packer. Keep your recipe calculations on a weight or percentage basis for easability in scaleups and conversion to production run quantities. Make sure that the co-packer is using correct manufacturing and processing procedures, and that quality control checks (pH, end point temperature, brix, viscosity, and color) are being observed and documented throughout processing. Proper fill levels need to be adhered to, as well as proper weights and proper capping procedures. Make sure your package can hold the amount stated on your label. For instance, bulk densities vary among ingredients, and some lightweight materials are not able to meet the net weights stated on the label of your finished product. This is a problem. If you can only put 10 ounces of dry mix into a 12-ounce container, you will have to change your net weight statement to reflect a 10-ounce measurement. A cost effective, high quality product can be ruined by haste during the final stages of production, either from over-filling, leaving the cooker and over processing the product, or by not capping the jars securely at a high enough temperature. Low temperatures result in product contamination and insufficient seals. It's a big plus to use a co-packer that currently has a HACCP plan in place.

Start small and grow slow. Be smart, and don't get carried away by the fact that you have a great product. When your product is a big success, think of line extensions to compliment your original product.

Gary Comstock, Marketing Director, Butternut Farms, Nicholas, NY

Time and Venue: 10:45 a.m. - 12:30 p.m., April 6 - Stuac Theater

The natural and organic food industry has enjoyed a twenty percent annual growth over the last five years and it looks promising that this will continue into the near future.  For start up companies wishing to break into this niche market among others, they need to find specialty distribution channels.  The Natural Organic Directory put out by CAFF (the Community Alliance with Family Farmers) is a publication that provides this essential information and much more.  The CAFF can be reached by phone at (530) 756-8518 and through e-mail at caff@caff.org.

The Natural Food Merchandiser is the flagship magazine for the Natural Food Industry.  It provides articles on the state of the industry, news, trends, ideas, advertisements, certification issues, and general interest information.  They can be reached by phone at (303) 998-9126 and via e-mail at the address customerservice@newhope.com.

Trisha Torrey, Marketing Specialist, Eric Mower and Associates

Time and Venue: 2:00 - 2:45 p.m., April 6 - Labclass 103

How do I make e-commerce/use of the Internet work for my business?  Building a website to sell more products is a great idea, but there are many factors that must be taken into account to be successful, and to make the investment in e-commerce make sense for your organization. We will review those factors, why they are important, and the steps you can take to make sure your website furthers your business objectives.

Specifically the presentation covered:

Goal Setting: For most of us, our overriding goal is simply to be more profitable in a more efficient manner. We will discuss making our goals more specific and realistic and how to make sure they enable our customers (or potential customers) react in the way we wish.

Building a Website for Commerce: The best technology in the world won't create a website that is appealing to customers and helps them purchase goods and services. We'll discuss the best approach for making it easy for customers to do business with you, how to meet their expectations, and what value you can add to their experience that will turn them into repeat customers.

Keys to Effective Websites: A brief review of the best practices in site building was covered-- those site ingredients that separate an effective website from "brochureware".

Linda LaRosa-Mosner, Marketing Education Coordinator, Central New York Resource Conservation and Development Project

Time and Venue: 11:45 a.m. - 12:30 p.m., April 6 - Labclass 112

It's the Spice

Locally produced products and services generate profits, increase local consumer spending, elevate the competitive status of rural communities, and motivate entrepreneurial spirit. Locally produced products also enhance the rural tourism industry. The local character and flavor of a region is the spice that consumers crave.

The rural tourism industry in upstate New York is growing at an impressive rate. Farm and non-farm entrepreneurs want to tap into this evolving market. Traditionally, agri-preneurs have focused on selling their product within the local community where friends and neighbors are the targeted market. But we can't let those tourists drive away empty-handed!

Get in Touch With Your Inner Tourist!

Tourists are people who are away from home with a purpose. While they're experiencing unfamiliar territory they want to feel comfortable and welcomed. They want unique experiences - something to talk about when they return home. They want good memories.

In addition to memories, tourists want take-away treasures that remind them of all that they have seen, touched, tasted, and experienced. They want to share the aesthetics of their experience. That's why 48% of their purchases will be shared with friends, family, and co-workers back home.

Consumers want value. Studies conducted in the Mall of America® indicate that consumers, regardless of age or income level, want to feel that they have received good value for their dollar.

When aiming for the tourist market, customer convenience means locating products where tourists are. Where do tourists stop to shop? The answer will vary from one community to the next since no two communities have the same attractions or entice the same customer base.

What Do Tourists Crave?

They crave things that stop them in their tracks or make them laugh out loud. Tourists have preconceived ideas about what they will experience when they are away from home.

Consumer-ize© Your Product For Tourism Dollars by taking the time to ask and answer the following questions about your perspective customers as they relate to your product. It can save time and money.

Consumer-ize© Your Marketing Strategy For Tourism Dollars by taking the time to ask and answer the following questions about your prospective market. You'll take some of the mystery out of marketing.

Step by Step

For agri-preneurs involved in small-scale production or processing, marketing usually begins with direct off-the-farm sales, farmers' markets, farm stands, and some local shops. When taking marketing to the next level, the commercial retail community becomes the direct customer.

Consumer-ize© For Your Customers by taking the time to ask and answer the following questions about your business management system and your product, to ensure you'll have the customers of your choice.

You Again?

Wonderful things happen when you consumer-ize for the tourism industry - local consumers (who wants all of the things that tourists want) begin to sit up and take notice. All of a sudden, they're back and they're bringing friends with them. Oh well, it's time for a few more business challenges!

Dr. Olga Padilla-Zakour, Director of the Northeast Center for Food Entrepreneurship, Cornell University

Time and Venue: 2:00 - 2:45 p.m., April 6 - Labclass 107

Food manufacturing for retail sale is regulated at the federal level by the Food and Drug Administration (FDA) for products that contain up to 2 % cooked meat and by the United States Department of Agriculture (USDA) for products with more than 2% cooked meat. Milk and some dairy products are regulated by the Pasteurized Milk Ordinance. In New York State, the Department of Agriculture and Markets (NYSDAM) and the Department of Health oversee food preparation and processing of FDA regulated foods for retail markets. The emphasis of the regulations is food safety in order to protect the final consumers. This presentation will cover the main requirements a new food processor will need to meet while introducing a new food product into the marketplace.

The type of regulations are based on the different classifications given to foods based on their composition, the kind of processing and packaging applied, and the way the finished product will be distributed for commercialization.

Foods are classified based on their acidity and water availability using two values: pH and water activity. The pH refers to the degree of acidity in a food and it is measured with a pH meter. Foods with a pH above 4.6 are classified as low acids. Examples are meats, milk, eggs and vegetables. Foods with a pH below 4.6 are classified as acids. Examples are most fruits, tomato products, dressings and BBQ sauces. Another category is acidified foods, which are low acid foods to which acids or acid ingredients are added to lower the final pH below 4.6. Examples are pickled meats and vegetables. Water activity refers to the water in the food that is available (free) for microbial growth. It is measured with a water activity meter in a scale from 0 to 1. Foods with values below 0.85 are considered non-hazardous regardless of their acidity, because they do not support the growth of harmful bacteria.

Low acid foods are closely monitored by regulatory agencies because they can support the growth of many pathogens (microorganisms that pose health hazards). Typical preservation techniques for these products include pasteurization combined with refrigeration, freezing, dehydration and retort canning.

Acid foods are less hazardous due to the inhibitory properties of the acid naturally present in them. Shelf-stable products can be produced by pasteurization of the finished product at temperatures below 212°F. Freezing and dehydration are used for preservation too. Acidified foods can also be preserved by pasteurization, but law requires careful control and monitoring of the acidification step.

The processing and packaging techniques chosen to preserve or to extend the shelf-life of a food product will greatly affect the critical points that will need to be controlled. Vacuum packaging (VP), also called reduced oxygen packaging, is regulated by the NYSDAM. Consult with your local office before purchasing a VP machine as a special permit is necessary.

In most cases, prior to starting the production of a new food product, the interested processor will need to obtain a Food Manufacturing license from NYSDAM and, depending on the type of product, will also need to file, register and complete additional requirements established by federal agencies.

David L. Holm, Program Manager, Northeast Sustainable Agriculture Research and Education Program

Time and Venue: 2:00 - 3:45 p.m., April 6 - Stuac Theater

The Sustainable Agriculture Research and Education program is a national effort to improve and expand sustainable practices by supporting projects in research and education, professional development, and on-farm demonstrations and experiments. SARE is a national program with four regions. The Northeast region covers Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, West Virginia, Vermont, and Washington, D.C. SARE is funded and administered through the USDA.

Money is distributed through a competitive grant process in three focus areas:

1. Farmer/Grower grants go directly to commercial growers who want to try out a new practice, develop a new tool, refine their farm management, diversify, or conduct a demonstration. These grants range from a few hundred dollars to $10,000, with the average grant about $4,500. Farmer grants usually run one year.

2. Research and Education grants go to researchers who want to explore some aspect of sustainable practice, whole-farms systems, value-added production, alternative production techniques, pest management, and many other topics that relate to sustainability. Many applicants are affiliated with a land-grant university, but non-profits and individuals have also applied for-and gotten-SARE funding. Awards range from $30,000 to about $150,000. Research grants must have an outreach component, and can run several years, depending on the project design.

3. Professional Development grants are dedicated to educating Cooperative Extension and other agricultural professionals in sustainable practices. Any individual or organization may apply, and grants are most frequently awarded to people and institutions with preexisting connections to Cooperative Extension. Successful applicants have included agricultural non-profits, non-governmental organizations, land-grant universities, and extension educators. Awards range from $15,000 to $100,000 and can run several years, depending on the goals and the overall project design.

Northeast SARE is committed to supporting agriculture in the Northeast that is diversified and profitable, providing healthful products to its customers. We envision farmers who manage resources wisely, who are satisfied with their lifestyles, and who have a positive influence on their communities and the environment. Northeast SARE grants are targeted toward projects that bring us closer to this goal.

Nancy New, Program Division Director, USDA Farm Service Agency

Time and Venue: 2:00 - 3:45 p.m., April 6 - Stuac Theater

This presentation focused on the agricultural lending programs available through the Department of Agriculture, specifically the New York State Farm Service Agency. This agency offers long- and short-term loans for people who produce agricultural commodities for sale.  The agency also offers both a guaranteed loan program that is administered by private lenders, including commercial banks and Farm Credit Associations, and a direct loan program.  The presentation reviewed the programs that are available in both of these sectors. The agency's programs include some funds that are specifically targeted to beginning and minority groups that I will review. Further, the presentation addressed some of the limitations that the agency's programs face and address some of the private sector versus government lending concerns that face farmers and programs.