Are Vegetables Good For Your Bottom Line?

Mediterranean cucumbers have been one of Plantpeddler’s most successful crops. They are packaged and sold under their Stone Creek Farms label.

When you listen to ornamental growers talk these days, some of them are talking about vegetables. Not plugs or transplants that other people can grow, but actual produce. It turns out that vegetables may not only be good for your waistline — they may be good for your bottom line. As fixed costs continue to rise and competition and the economy limit margins, growers are getting increasingly creative to find new markets and develop new products.

Getting Started In The Edibles Market

For some growers, using empty greenhouse space to raise produce in the off-season is that new market and new product. If done right, raising and selling produce can help to offset overhead costs without requiring additional investment in new structures or equipment. It’s not a slam-dunk; careful planning is required to find markets for your produce and to determine which vegetable varieties to grow, as well as to understand legal issues.

Two growers, Mike Gooder, president of Plantpeddler in Cresco, Iowa, and Jeff Mast, general manager of Banner Greenhouses in Nebo, N.C., have faced these challenges and ultimately found ways to make growing produce profitable. Each has approached the growing process from a different angle, depending upon their resources, location and ornamental crop mix.

Both emphasize that raising produce is only a small part of their business, and ornamental plants remain their primary focus, always taking priority over vegetables. But both Gooder and Mast say that for them it’s worth doing.

“If you’re only producing ornamentals for a short period of the year and then that space will be empty, look at your opportunity during those windows to gain some revenue to offset overhead expenses,” Gooder says. “You need to look at it from a distribution of overhead cost approach — ‘I’ve got a fixed overhead cost, can I divide it up further?’”

Gooder says his goal was to bring in new revenue without increasing his fixed costs. “It doesn’t make sense to say you’re going to produce vegetables if you’re going to incur costs to build more infrastructure,” he says. “You have to look at your structures and opportunities and ask, ‘How can I do this without contributing more cost to my operation?’”

Gooder says one of the easiest opportunities is the fall cycle. “You seed now, you seed through the summer — there is a wide variety of vegetable crops that respond well to this. You can use the naturally declining temperatures of fall to finish that material and pick after the normal outdoor production cycle. It’s an easy opportunity to gain a fall revenue stream.”

While Plantpeddler still grows a large number of poinsettias as a rooting station for Ecke Ranch, and as pre-finished and finished, Gooder points out that fall produce is a good option for growers who no longer have poinsettias in their mix or if they are looking for something to grow with them.

Choosing What To Grow

Historically a potted flowering plant producer, Plantpeddler has recently focused on vegetative propagation of young plants, especially begonias. They started growing vegetables in 2008. When asked how he learned production techniques for vegetables, Gooder laughs, saying, “The way we learn most things at Plantpeddler — the hard way.” One of the big challenges was finding the right varieties. They needed to be compatible with greenhouse production, and Gooder focused on self-pollinating, seedless varieties.

“We tried more than 20 tomato varieties until we found ones that were adaptable to what we were trying to do in the greenhouse,” Gooder says. “If you’re going to do determinate tomatoes, they need an open canopy, and you’ve got to get air through that canopy. And they have to be able to grow in low light — most people are not equipped with HID lights in their structures, and a lot of guys will be growing under poly.” The typical Dutch tomato varieties for greenhouse application are developed for glass roofs and supplemental lighting. They are also mostly indeterminate, he says.

Gooder has had success with a number of other crops including Mediterranean cucumber, bush beans, leafy greens, Swiss chard, summer squash, zucchini, radishes, strawberries and raspberries. “Probably the most well-received product for us was the Mediterranean cucumber. Also the leafy greens,” Gooder says. “And there’s always demand for locally grown tomatoes, but it’s the most difficult crop to produce.”

Gooder saves money by recycling pots and planting media. Leafy greens, for example, are a 30-day crop, ideal for short windows within the ornamental cycle, he says. “You can take a 10-inch hanging basket, or — we do lettuce in a 6-inch azalea pot — core it out when you’re done and replant right back into it. You don’t even have to refill it,” he says.

In some cases, Gooder says, he can sell both the produce and the plant itself. With strawberries, for instance, he plants in late summer or fall in hanging baskets, picking fruit until Christmas. In January and February, the plants rest, and he begins greening them up again in March. “They’re cold-hardy, so you get them out of your greenhouse and finish them outside. You get a nice flush of fruit on them and they’re good to sell. It’s a double-dip,” he says.

The Legalities Of Growing Food

There is something even more important than the varieties you choose, however, and that’s understanding the legal issues surrounding selling food that people will eat, as opposed to plants that people will grow.

“The first conversation that you have to have is with your insurance company,” Gooder says. “Make sure they understand that you’re going to be picking food for harvest. We’re used to being in the ornamental business, and what we do typically doesn’t affect the health of our customers. It’s a whole different factor when you start to grow food.”

Gooder stresses that you have to do your homework. Challenges such as monitoring for pests, sanitation and pest control are more complicated when producing food for consumption. Fewer pesticides are labeled for greenhouse use, so the use of beneficials in an IPM program or mechanical controls such as row covers become more important. He recommends Wholesale Success: A Farmer’s Guide to Selling, Postharvest Handling and Packing of Produce produced by FamilyFarmed.org as an excellent source of information on harvesting, storage, grading and packaging of produce for someone starting out.

Finding Your Produce Niche

Plantpeddler’s produce is sold under the name Stone Creek Farms. Gooder explored and is successful with several different markets: restaurants, food co-ops, wholesale produce distributors, schools and institutions and his own retail store. The latter is the most successful. Initially a traditional flower shop, Plantpeddler’s store now carries Stone Creek Farms produce as well as other local products, such as wine and cheese. Grocery stores, unless it’s a small, local chain, are the hardest to break into because of aggressive national and international price competition, Gooder says. Food co-ops are good markets because of the value placed on locally grown, sustainable products. “Co-op customers don’t want a Mexican tomato, they want a local tomato,” Gooder says. “Cost is typically not a factor, and you can set and count on a fair price for the season.”

Grow To Cash In On The Locally Grown Market

Jeff Mast of Banner Greenhouses says he began looking at growing vegetables in the off-season about four years ago. “The whole
locally grown movement has been big in Western North Carolina for a good period of time,” he says. “It seemed like there might be opportunity in that realm that we could pursue if we could match up the time periods in the years with those opportunities. Our goal was to diversify our product, diversify our customers, open up a new sales channel and hopefully cover some overhead costs in the off-season.”

Like Gooder, Mast and his staff had a lot to learn. Banner Greenhouses is predominantly a wholesale contract grower for the mass market — two seasons of annuals in spring and fall, although they also sell plugs and liners and unrooted ipomoea cuttings. “We tried quite a few things — green beans, pak choi, cucumbers, bagged herbs, strawberries, mini cukes, mini squash and mini melons,” Mast says. “We looked at what would fit nutrition-wise, what fits with our irrigation system and, of course, where the volume is. Tomatoes and peppers are where the big volume is, so we worked with those.” Mast originally sold the produce under the Banner name. Now he is selling through a distributor, using its New Sprout Farm label.

Find The Right Market To Increase Efficiency

Mast has since backed away from tomatoes, saying he couldn’t compete on price. “You’re competing regionally during the season and with California and then with Mexico during the off-season. It’s a high-volume product for those guys, and it all comes down to commodity pricing,” he says. “In 2011 we really went after the tomato business. We had really good volume and a beautiful crop, but the price was horrible.” The pepper crop he’s growing right now includes red, yellow and orange bell peppers, which will be harvested during the summer and fall.

Mast has found a profitable marketing outlet with Whole Foods as well as with a local grocery store chain and a local distributor who works with restaurants. He says having a restaurant distributor is important since restaurants want small, frequent deliveries, which were inefficient for his operation.

Banner’s rural location is not suited for a retail outlet, but Mast acknowledges that would be ideal. He also stresses the importance of finding markets that value locally grown food. “Our product is local, it’s grown pesticide free, vine ripened and has a great flavor — those are the merits,” he says. He’s considering the advantages of becoming certified organic, citing some possible opportunities that might open up. “You can get a better price if you’re certified, but there are some upfront costs. We’ve found in some of our sales channels if it’s local, vine-ripe and pesticide free, it has just as much merit as being organic. We haven’t decided yet,” he says.

Last fall, Banner became Good Agri-cultural Practices (GAP) certified. It’s a voluntary certification but will open doors for business opportunities. “In the future a lot of grocery store chains are going to require you to be GAP-certified to sell to them, and the local school systems as well,” Mast says. “And as part of the GAP process, we’ve learned a lot more and changed our ideas on handling and harvesting.”

Develop Partnerships To Reduce Packaging Issues

As Banner started to get involved in vegetables, Mast got support from two
important sources: his seed supplier, Rogers Seed, and the Appalachian Sustainable Agriculture Project (ASAP), a non-profit organization with the mission of helping North Carolina farmers convert from a tobacco-based economy to other products. ASAP helped with marketing and setting up meetings with buyers, while Rogers assisted with production information. “The main differences [from ornamental plants] are that irrigation is critical — the volume and frequency impacts the fruit quality — and the nutrition is completely different. Managing temperature and light was similar,” Mast says.

The marketing, sales and packaging sides of the business have their own unique challenges. “Packaging and handling have been the largest obstacles we’ve had to work through,” Mast says. “It’s a perishable product — it’s got to move. You don’t harvest the same quantity every week. For example, you’re used to 100 cases per week, now you have 225. Where are you going to go with those extra cases? It’s happened to us.” In those cases, Mast says, it was vital to have multiple, good business partners who can work the extras through.

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