Can DTC Efforts Help Utah Farms Thrive?
The Covid-19 outbreak threw new debilitating obstacles at farmers and ranchers. Are Direct-to-Consumer marketing and sales efforts a way to survive and thrive? A look at two Utah farmers.
In case you suffer with short-term amnesia, let me remind you that the four-month-period of April 2020 through July 2020 was not a fun time to go grocery shopping.
In fact, it didn’t matter if you were visiting a big box retailer or a local Mom & Pop shop:
The reality was that many shelves were laid bare by the uptick of the Covid-19 outbreak across the United States as sickened and dying workers led processing plants, distributors, and shipping companies to halt operations around the country.
Such shutdowns led to emptied grocery shelves, limited purchasing rules, and (in some cases) panic buying, affects seen by virtually all Americans.
What most of us did not see, however, was the downstream pressure Covid-19 exacted on farmers and ranchers throughout the country and here in Utah.
Unexpected Consequences Led to Food Insecurity
Turns out if you don’t milk dairy cows daily, their bodies stop lactating.
So if local laws and regulations prevent you from selling raw milk direct-to-consumers while you’re also faced with the reality that the dairy processing plant is not accepting deliveries because Covid has temporarily halted all operations, what happens?
In many cases, tons and tons of raw milk were literally dumped into the soil across the country. And that’s what happened in the first half of 2020.
Similarly, many ag producers found they were unable to sell their produce or livestock because the nasty ripple effects of Covid-19 meant that hectares of crops were plowed under and countless numbers of livestock buried alive.
Simply put, America’s food chain was broken. And that meant Food Insecurity for many.
The Heroic Efforts of the Utah Farm Bureau
Early 2020 found me in the third year of a marketing consulting engagement with the Utah Farm Bureau Federation.*
This gave me a front row seat to see the debilitating effects of the Covid-19 outbreak on the agricultural community.
And to be clear, it wasn’t pretty.
Obviously, it wasn’t just the food industry that was hit by the pandemic, as over 30 million Americans lost jobs or were furloughed over a span of several weeks in early Spring.
And lest we forget, over 600,000 Americans have died thus far from Covid-19 and related causes since the virus hit our shores.
Then inspiration struck the leadership of the Farm Bureau as they hit upon the idea of buying product direct from their members at wholesale prices or lower, food that could then be donated to struggling Utahns around the state, assisting both communities in the process.
This thought gave birth to the Farmers Feeding Utah program, which is now incorporated into the Miracle of Agriculture Foundation, a 501(c)(3) nonprofit.
Since its formation in May 2020, the Miracle of Agriculture Foundation has donated over 1.5 million pounds of food to more than 30,000 Utahns stretching from Cache Valley in northern Utah to the Navajo Nation in the southernmost reaches of the state.
With a retail value of close to $3.5 million, these food donations have had a major positive impact throughout the State of Deseret, with food insecure families and ag producers alike.
However, as generous as donors have been with supporting the Miracle of Agriculture Foundation, it is not a long-term solution to the broader business challenges facing family-owned farms and ranches throughout Utah and around the U.S.
Changing the Economics of Farming and Ranching
Unless you’re part of the agricultural industry or are a professional marketer, I suspect most people don’t actually think about the business side of agriculture on a regular basis.
But in a capitalistic society, the goal for every business is to make money (aka, be profitable) by providing goods and/or services that others want to purchase.
The greatest profit levels are typically found when manufacturers or producers can sell those goods/services directly to the end consumer. But getting your products to consumers is not always easy, especially if your fields are based far away from population centers and prospective customers.
Hence, farmers and ranchers typically sell their products at wholesale prices to processors and/or distributors.
The impact is that these ag producers end up with as little as one-quarter of the final retail price in their bank accounts from these sales, and that’s before they cover all of their costs.
As a result, many family farmers and ranchers see one or more of their adult owners taking on a full- or part-time job on top of their farm/ranch work to help make ends meet and often to gain access to healthcare benefits.
However, if an ag producer can sell DTC, Direct-to-Consumer, the economic calculus changes dramatically as they can often double to quadruple the amount of income coming in the door.
For the balance of this Feature Story, I will focus on two farmers who are making a go at DTC marketing and sales efforts in Utah’s ag community.
From CPA to Peach Farmer
Thayne Tagge didn’t start out to be a farmer, although it was clear early in his youth that he was a natural born entrepreneur.
Thayne was raised in Holladay, Utah where he attended Skyline High School, before eventually getting his bachelor’s degree from the University of Utah and becoming a CPA working at one of the Big 8 accounting firms of the day: Peat, Marwick.
But as a teenager who spent many a summer day waterskiing at Bear Lake, Thayne recognized an amazing product when he saw (or tasted) one. So he decided to see if he might be able to resell some Bear Lake raspberries down in the Salt Lake Valley.
By 1982, he and his future wife, Cari, were respectively selling 50 cases of raspberries each day during the 2—3 week harvest season every August at two locations in the Capital City. {Interestingly, those berry sales surpassed what Thayne was making as a full-time Certified Public Accountant.}
In the 12 years following their marriage in 1983, Thayne and Cari added four kids to their household and expanded their fruit-selling business to six stands along the Wasatch Front.
But the real change in the Tagge agricultural business came in 1986 when they agreed to purchase a 25-acre peach orchard in Perry, Utah.
Since that purchase in 1987, Thayne and his family have expanded their operations numerous times through acquisition that now include
The 25-acre orchard mentioned above,
A 12-acre parcel across the street from the original peach orchard,
A 28-acre farm in Willard, Utah,
Eight acres for growing blackberries “down by the freeway,”
A four-acre parcel in Huntsville, Utah,
A production plant,
Two rental homes, and
An antiques store.
Tagge’s Famous Fruits and Veggies (as the company is now called), leases an additional 67 acres of farmland in Corinne, Utah for growing various crops and produce, for a total of 144 acres owned or leased.
In addition to its seven fruit and veggie stands, Tagge’s also sells products DTC throughout the Wasatch Front at 15 farmer’s markets during the summer, including the one just up the road from where we live in the Daybreak Community in South Jordan, Utah.
Consumers can now also buy various products from Tagge’s on its website (https://taggesfruit.com). {It’s Mango Salsa is very good!}
Thayne further explained that Tagge’s Direct-to-Consumer CSA program now has over 1,500 pre-paid customers who sign-up to have boxes of fresh, locally grown vegetables and fruit delivered to pick-up locations throughout Utah each week in season.
These one-, two- and four-person Tagge Farm Boxes are delivered for 15 weeks from July through October for as little as $285 as part of its Consumer-Supported-Agriculture efforts.
And to give an idea of the economic impact of Tagge’s, consider that for 2020, the company had over 230 people on its payroll during the year.
Ethne Nethercott: The Micro-Grower of Microgreens
Conversely, Ethne Nethercott, is on the other end of the spectrum from Thayne and Tagge’s.
After buying her first house six years ago in Centerville, Utah, Ethne ripped-out her backyard with the idea of putting in a greenhouse and grow boxes to show others how they could move closer to self-sustainability by growing much of their own food.
Today, however, Ethne’s full-time job in construction site management and maintenance is supplemented by a side gig as the owner/operator of Utah Infinity Gardens.
For Ethne, her ag life began in Montana where she was raised for the first eight years of her life on a cattle ranch before her family began its move into city life in different Intermountain West cities.
But because agriculture always tugged at her, she found ways to grow food in tiny spaces, like a four-foot grow box she built on an apartment balcony some 20 years ago.
So when Ethne said aloud how much she liked working in her backyard garden and mused about how nice it would be to become a farmer, her roommate responded with a simple question:
“Why don’t you?”
That was the beginning of Ethne’s journey to becoming a micro-grower of microgreens.
Today, in her third year as a farmer, Ethne leases 1.5 acres of land in West Jordan, Utah, land that had lain fallow and weed-infested for 15 years before her arrival.
In fact, she says she hauled 150 trailers of horse manure and sawdust to her small field to restore it back to the place where it could reasonably grow crops.
Ethne’s bounty as a first-year farmer in 2019? A mere “couple hundred bucks.”
During the 2019/2020 winter, Ethne put in a 100-foot greenhouse and a 50-foot nursery on her smallish parcel of land, both of which are climate-controlled and allow her to grow year round.
Being a small-time, part-time farmer, however, meant that Covid-impacted 2020 was difficult for Ethne because the farmers markets across the Wasatch Front all shut-down for a time due to government restrictions and safety concerns.
But in addition to her modest website, Ethne also set-up an account on Facebook Marketplace (visit https://www.facebook.com/Utahinfinitygardens).
Ethne describes herself as literally a “Midnight Farmer” because of the many late nights she spends tending her small farm.
But as she explained, what drives her are the health benefits she and her customers derive from eating locally sourced and harvested food.
“What drives me is that feeling of satisfaction you get when you have plants that are producing. You get to taste that fresh vegetable. It’s nothing like what you get in the stores. We’ve been trained that our food shouldn’t taste, or doesn’t taste, so we’ve got to mask it with dressing or seasonings. In reality a fresh salad, picked today, requires very little dressing.”
Future Feature Stories Coming on Utah’s DTC Ag Producers
Clearly, Ethne and Thayne are not the only members of Utah’s agricultural industry who have implemented a DTC strategy for their crops, meats, and more, and that includes individuals and organizations selling throughout the U.S. and abroad.
But such Direct-to-Consumer programs are not without challenges, many of which are outside their control.
That’s why in the weeks and months ahead I plan to revisit this DTC arena with tales of other ag producers from the state.
So if there are any Utah farms / ranches you’d be interested in learning more about, especially DTC providers, please share your thoughts via the Comment button below. Thanks.
* — Note: My marketing engagement with the Farm Bureau and any related entities ended in February 2021.
ICYMI:
If you haven’t read last Friday’s report from Deseret Business Watch — Acquisitions, Fundings, Donations, Hirings, and More (Two-Week Highlights, June 5—18, 2021)— I hope you’ll do so now.
This particular issue looks at 12 separate news stories from the business community of Utah, and I think you’ll find the entire edition of DBW worth your time. Thanks.
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About the Author
David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. Additionally, if you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.
Great piece David!
Just dancing around the edges, however.
Utah's AG Business is producing and exporting cows or pigs and the hay and grain to feed them!
Consumers don’t buy whole cows or pigs.
Bob
Another great article. Just two suggestions. Pitchbook.com just released a report on VC and Agritech, headed for a record year of investment. Also, the economic impact of agriculture on the State's GDP is nominal probably at most and being very liberal a $1B a year. However, the State spends over $22 million a year on the industry. Not very fitting since they spend less than $1M on entrepreneurship and the tech industry.