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USDA Offers New Resource to Help Food Hubs Improve Financial Performance

Christine Feroli
Release Date

Rural Business-Cooperative Service Administrator Sam Rikkers today announced a new resource to help food hubs improve their financial performance.  Food hubs, which are a businesses or organizations that manage the aggregation, distribution, and marketing of locally-produced food, play a key role in creating opportunities for small and mid-sized producers while also satisfying growing consumer demand for local products.

   The new report, Running a Food Hub: Assessing Financial Viability, provides modules and best practices for food hubs to maximize profits and control costs. Part of a multi-volume series published by USDA Rural Development, the report provides technical assistance for food hubs at different stages of development. For example, it gives beginning food hubs advice on writing sound business plans, and it includes guidance on how established food hubs can expand into financially viable long-term businesses.

   “Food hubs are an exciting and growing business model,” Rikkers said. “They create new opportunities for producers and are critical elements of vibrant local and regional supply chains in communities across the country. With this report, we’re excited to share practical steps that food hubs can take to be even more successful.”

   The number of food hubs in the U.S. has more than doubled over the course of this Administration, with more than 350 now operational around the country thanks in part to support from USDA.  Food hubs aggregate products from small and midsize farms and distribute them to large-volume buyers, such as grocery stores, in the local region.  According to a comprehensive survey by Michigan State University, on average, each food hub supports 20 jobs and generates nearly $4 million in annual sales.

   Rikkers presented the report at Washington, DC’s Union Market, a food retail space with more than 100 businesses employing 1,500 people in food production and distribution.  Joining Rikkers at the market were representatives from the Arcadia Center for Sustainable Food and Agriculture, a non-profit organization that operates a farm, mobile market, food hub, and farm to school program. Based in Alexandria, Virginia, the Arcadia Center brings local produce to neighborhoods that would otherwise have limited access to fresh food.

   Rural Development’s efforts to support food hubs and other regional food enterprises are part of USDA’s Know Your Farmer, Know Your Food Initiative (KYF) which coordinates the Department's work to develop strong local and regional food systems.  USDA is committed to helping farmers, ranchers, and businesses access the growing market for local and regional foods, which was valued at $12 billion in 2014 according to industry estimates.  Under this Administration, USDA has invested more than $1 billion in more than 40,000 local and regional food businesses and infrastructure projects. More information on how USDA investments are connecting producers with consumers and expanding rural economic opportunities is available in Chapter IV of USDA Results on Medium. 

   Since 2009, USDA Rural Development (#USDARD ) has invested $11 billion to start or expand 103,000 rural businesses; helped 1.1 million rural residents buy homes; funded nearly 7,000 community facilities such as schools, public safety and health care facilities; financed 180,000 miles of electric transmission and distribution lines; and helped bring high-speed Internet access to nearly 6 million rural residents and businesses. For more information, visit www.usda.gov/results.