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MOF&G Cover Winter 2005-2006
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  You are here:  PublicationsMaine Organic Farmer & GardenerWinter 2005/2006Iowa   
 Local Market and Profits Cultivated in Iowa Minimize

Article & photos by Arion Thiboumery

Contempt for hierarchical power and hope for self-sufficiency first brought people to the open prairie. Today those inherited sentiments have some residents renouncing the national food production and distribution system, charging that it is inequitable, delivers largely ho-hum products, decreases food safety, and disconnects farmers from the people eating their food.

Countering the dominant system, a program in northeastern Iowa is using locally produced and processed food to create equitable economic growth and to show that personal relationships have economic value. A small restaurant owner who wants better food at comparable costs is choosing local food, and his customers eat at his restaurant more often because of it. A young butcher has been able to open his own meat locker because of increasing concern for how animals are raised and processed. A country store is staying in business by offering quality local products with down-home service. Yesterday’s standards are today’s selling points.

The Restaurant

Employees of the Waterloo John Deere tractor factory count Rudy’s Tacos among their favorite lunch spots. Situated in a small, downtown strip mall, the place hardly compares in mystique with Chez Panisse of Berkeley, California; but owner Barry Eastman may be doing more for the quality of food and farming in the Midwest than Alice Waters could imagine.

Eastman, a local guy who grew up working in small, area restaurants, studied marketing in college, then decided that selling products that he didn’t care about wasn’t his thing. He did like making food, though, so he returned to Waterloo and bought a Mexican restaurant 15 years ago, changing its name to Rudy’s Tacos (after a longtime taco place that had closed).

Eastman focused on food quality. Particularly unsatisfied with chicken from a food service, he searched for a local source of free-range chickens. “The difference in quality blew me away,” says Eastman, “not only in the flavor, but also in the solid and juicy texture of the meat.” He had been paying $1.03 a pound; the Welsh Farm organic chickens cost $1.63 a pound, but “with the regular chickens, you’d cut them open, there was just fat and loose grey stuff inside. I get a lot more useable meat from the Welsh birds. I think it works out to about dead even in cost for useable meat.”

Eastman gets organic chickens relatively cheaply by buying directly from a local farmer. Comparable birds shipped from afar and sold though middlemen could easily cost twice as much. As farmer Gary Welsh of Welsh Farms notes, “Some people make more money off my chickens than I do.”

The chickens hooked Eastman on local food — for quality and for connections among small, local businesses. “Plus, I get a kick out of working with a lot of these local farmers,” he adds. “You can talk with them about how they’re doing things. If you say ‘organic’ to a food service rep, they just go stiff.” Many farmers come into the restaurant and love having their products served to them. Steve Moseley, for example, sells tomatoes to Eastman and regularly comes in for meals with his family on his delivery days.

Many regulars have made Rudy’s their own. The ceiling is covered with hanging marionettes of clowns and cowboys wearing sombreros, most brought by customers from thrift stores or vacations. The dining area is filled with old Formica and chrome dinner tables, many formerly stored in people’s basements. “When they come in, they always sit down at their table,” Eastman says with a smile. Customers also like knowing where their food comes from. Eastman runs a tight ship, overseeing most things personally, but takes time to joke with employees. He tried to offer health insurance, but “it’s just too expensive. I pay too much already just for my family. But I pay a pretty darn good wage.” Over half of Rudy’s staff members have been working here for more than 10 years.

The fare is typical American-Mexican. “The difference is in the food, not the menu,” Eastman explains. He can’t say if his profit margins are thinner than most, but they must be decent. He’s been able to buy the building he’s in and has helped his wife open a coffee shop in nearby Cedar Falls. Eastman says confidently, “Profits have only been going up since I’ve started using local food.”

Eastman guesses that buying local food is about 10% more expensive, “but it more than pays for itself with the repeat business.” In 2004, out of the $234,000 Rudy’s spent on food, 71% went to local farmers and processors—more than some of the most progressive restaurants in the country. Eastman shrugs. “I’m just a small restaurant owner trying to offer good service and good food. Anybody can do this.”

The Butcher

Joel Steege buys from local farmers for his custom meat locker, the Benson Meat Locker. The business is state inspected to process but not slaughter meat. Steege can and does slaughter meat that was pre-sold, while alive, by the farmer who raised the animal to individuals for home consumption, thus “custom.” When customers pay, they write one check to the farmer for the meat and another to Steege for processing.

Steege, 25, a third-generation butcher, can tell how meat will taste just by looking at it. Will it taste too lean or too fatty? Was it fed silage, corn or other grains? What kind of pasture was it on? Was the animal treated with hormones? Steege knows.

Four full-time employees work with Steege. Iowa minimum wage is $5.15 an hour. The Steeges (Joel at his locker and his father at another) pay $7 to $10 an hour and are looking into getting health insurance for both shops.
A small section in the locker offers retail meats that were slaughtered in a state-inspected facility. Steege buys his in sections from a larger place in southern Iowa. He’d prefer to see the animals before he buys the meat. Retail makes up only about 10% of his business. “The profits are a lot slimmer. I make almost twice as much from the custom work.”

Within a year, Steege hopes to have his place state-inspected for slaughter. Then he’ll be able to retail local meat to anybody who walks in and to restaurants, like the locker that sells to Rudy’s Tacos, and choose the cows he slaughters for retail. He estimates that business might go up 25% in the first year after becoming state-certified for slaughter. “It’d be cheaper for customers too, taking out one more step. I’m out to serve my customers a good fair price.”
The retail prices are comparable with the Cedar Falls Hy-Vee supermarket, a bit more expensive then the Fareway. “If you have good quality and good service, people will pay more,” Steege says. “If people buy a half or quarter custom cow, they actually save a lot.”

When mad cow disease was discovered in the United States, Steege was worried. Many large beef processors’ sales declined. Business for the Steeges “didn’t really change a whole lot,” Steege explains. People “knew me. They knew my dad. They knew where the cows were coming from and how the cows were raised.”

The Grocery

On Main Street in Aplington, Iowa, sits Dean’s Grocery, which Wayne and Rita Andersen bought in 1986 from Wayne’s parents, who had run it for 10 years before that. The classic architecture of this registered historical site suits the similarly classic Mom and Pop country grocery store, the kind that was once ubiquitous in America.

The Andersens installed a commercial kitchen in the store and now bake breads and serve breakfast and lunch. The older men of Aplington come here for the atmosphere. Bacon and eggs for breakfast, a patty melt and cream and potato soup for lunch, the coffee is always on, but you have to get it yourself. “The first time you come in, I’ll pour you a cup of coffee to show you where it is, but from then on, you’ve got to get it yourself,” explains Wayne. “Most people come in here and want the same things. They don’t even have to order. Come in, pour yourself a cup of coffee, and sit down, I’ll bring you what you want when it’s done.”

The Andersens know over 95% of their clientele by name. “If someone comes in here that I’ve never seen before, I go over to them and ask them if they need any help and try and strike up a conversation,” explains Rita. Their helpful, friendly manner happens to be good for business.

“I have older guys that come in here, give me their shopping list, sit down and drink a cup of coffee,” Rita says. She often delivers to residents of a local retirement community at no extra charge – picking up their recyclables at the same time – since many have trouble getting out.

“Yep, I’m a tree-hugger,” confesses this avid recycler, who’s on the town’s solid waste committee. “We have to protect the Earth that God gave us.” She wears a crystal rather than a cross around her neck, but is a Catholic and a registered Republican. “She’s a restrained anarchist is what she is,” says Wayne, himself a “conservative Democrat.” Few Democrats run in local elections here. You have to register Republican to choose among the Republican candidates in primaries.

Dean’s sells about 20% local products during the growing season and 10% during the winter. They like the superior quality and connection to producers. “We have to stick together, ‘cause corporate America is out to kill us all,” sighs Rita. “The hardest part is coordination, finding who’s got what and when.” The more local products they sell, the more people have wanted to sell to them.

Local products help, as distribution from warehouses to smaller stores becomes increasingly problematic. Rita and Wayne had to change distributors four times within four years. “The warehouses are closing down or consolidating and raising their minimum orders,” says Rita. “The last place we were using now needs $8,000 just to start their trucks. We only order $2500 to $3500 a week.” They now order from a Minnesotan who, like a small co-op, combines orders from many small stores and purchases from a large distributor.

Dean’s sells fresh produce, meat, dairy, honey and baked goods. “During the season, the green beans disappear as soon as they come in, people love them so much,” Rita says. “A lot of our customers are older. They grew up with garden fresh vegetables, but don’t keep gardens anymore.”

Butler County’s relatively aged population is the Andersen’s greatest asset and their greatest difficulty. Younger people migrate to cities. “The older people know good quality, good service, and what it means to support local business. They know you have to keep money in the community for it to survive. Unfortunately, most didn’t really pass this on to their kids,” Wayne says.

The Andersens work hard to remind people that there is a difference. They survive despite having two supermarkets within a 10-minute drive. “Buying local is really anchoring us in our uniqueness, ” Wayne says. “My faith tells me that if I put in a good, honest effort, I’m going to get a return.”

The Academic

When Barry Eastman was looking for better chicken for his restaurant in 1998, he ran into a neighbor, Kamyar Enshayan, a faculty member at the University of Northern Iowa (UNI), and learned that Enshayan had a grant to study food buying patterns of institutions such as schools, restaurants, nursing homes and hospitals and to determine how they might purchase more local food. Eastman mentioned his search. Two weeks later Rudy’s was serving local chicken.

“It’s our job as professors, as academics, to serve our communities. We have offices, resources and time to spend thinking,” says Enshayan. A native of northern Iran, Enshayan has lived in the Midwest for 24 years and has always been struck by the paradox of “so much agriculture, so little food.”

Almost 90% of Iowa is farmland, but the state imports most of its food. The people of Black Hawk County spend about $250 million annually on groceries and another $150 million eating out. Most of the money leaves the county and state to pay distant producers, processors, middlemen and franchise corporations. Iowa’s farmland is dominated by corn and soy, most sold out of state for livestock feed or for use in processed foods, such as high fructose corn syrup.
Iowa receives more federal agricultural subsidy dollars than any other U.S. state, yet farms continue to go under, largely due to low commodity crop prices. Only farm subsidies keep many afloat. The most important piece of farming equipment in Iowa is now said to be the mailbox. A recent study in rural Wright Co. found that $160 million worth of agricultural goods produced in 2003 cost $180 million to produce. The difference was made up in government subsidies, tax dollars.

“It is so obvious that something needs to happen,” says Enshayan. “The money and the farmland are already here. Just put them together.” He believes that farming should emphasize selling locally – often for higher premiums – rather than selling commodity crops to distant places through middlemen.

After four years of increasing local purchases from institutional buyers, Enshayan decided to pursue local buying from a household perspective. Many farmers’ markets existed, and some local farmers were selling directly to stores, but information and coordination were lacking. Enshayan knew many people wanted to buy from local farmers but didn’t know where and when markets were.

In 2003, working with Practical Farmers of Iowa (PFI) and UNI’s Center for Energy and Environmental Education, Enshayan launched a “Buy Fresh, Buy Local” campaign in northeastern Iowa. The campaign included street signs for farmers’ markets, displays for grocers and restaurants, stickers for products, newspaper and radio ads. The prime consumer-oriented element is an annual food directory with listings for farmers’ markets, grocers, restaurants and farmers.

The campaign has succeeded. For the 2003 growing season, 58% of surveyed farmers said that their sales increased over 5%, while 16% saw sales increase over 20 percent. Most of the farmers and small businesses involved said that coordination with each other and with consumers provided by the “Buy Fresh, Buy Local” campaign has been key to making local food work.

“I don’t think this has anything to do with being progressive or not progressive,” says Enshayan. “I think this can happen anywhere. You just need someone to facilitate the connections between people. I’d like to see at some point, every town, in addition to the Fire Chief and the Police Chief, having a Chief Food Coordinator. This is the job of governments and universities.”

The campaign has been financed largely with grants from Iowa’s Leopold Center for Sustainable Agriculture, but local governments and private citizens are increasing their financial support.

“The work is about building connections between people, so that they can support each other and build the local economy. Local economic connections have value,” Enshayan explains. “If you want to support people, you need an economy based on people.”

The three businesses examined here credit their success largely to the “Buy Fresh, Buy Local” idea. Over the last five years, the campaign has kept over $1 million in institutional food purchases invested in the area that otherwise would have left.

The goal of the campaign is for people to spend 10% of their food purchases on local products. “I think that 10% is reasonable for most people with a little effort,” Enshayan says. “Buying 10% locally would produce real community economic development, much more than casinos or factories.”

A casino approved recently in Blackhawk County will have an estimated annual revenue of $85 million, with the first $65 million going straight to the out-of-state corporate headquarters. The city of Waterloo, where more than the majority of Blackhawk’s population lives, will see only $400,000 in increased tax revenue. “They call this ‘economic development,’” says Enshayan. “This will take resources away from the community. A significant portion of that $85 million will come from people who live in this region.” In 2004, the 22 institutional buyers that Enshayan monitored purchased over $460,000 locally, money that would be spent anyway, not gambled away.

The grassroots economic success of the campaign is leading Enshayan and PFI to other parts of Iowa that want to launch their own “Buy Fresh, Buy Local” campaigns. “Some people may see this as ‘going back,’” Enshayan says, “but I see it as going ahead with what’s essential. We’ve tried industrial food and there are a lot of problems: low prices for farmers, dying rural communities, food contamination, mad cow, [lack of] quality and freshness. People are making a choice with this information, and they are choosing local food.”

About the author: Arion Thiboumery, a native of California, is currently a Rural Sociology graduate student at Iowa State University focusing on rural economic development.

    

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