UPfront
Midwest grape and wine complex is a story of growth led by wineries
Lay it down local A bag full of crunchy, mass-produced chips might just be locally gown 
All things grown local are cool these days. So why be surprised that PepsiCo’s Frito-Lay division is signing up for the trend? Potato growers from California, Florida, Maine, Michigan and Texas are being featured in an ad campaign celebrating the producers who grow the potatoes that end up crunchy and in a plastic bag at your favorite store. The farmers are being featured in 30-second television spots in national and regional media markets.
Frito-Lay reports it will support the campaign with a comprehensive marketing effort that celebrates the local connections of the brand through national print advertising and 40,000 in-store displays customized for each state to celebrate local connections and contributions to Lay’s Potato Chips.
While some proponents of the grow-local movement have taken umbrage at the fact a national distributor of potato chips has attached itself to the know-who-grows-your-food market space, management at the company justified the move as the campaign was announced.
Dave Skena, vice president of potato chip marketing, Frito-Lay North America said, “We are extremely grateful for the relationships we have with the farmers and communities that have built the Lay’s brand into a success over the years. People have an interest in knowing where their products are made and share a sense of pride knowing the role they play in a success story like Lay’s Potato Chips, and our hope is that this campaign helps put a spotlight on these communities and demonstrates the appreciation we have for their contributions.” |
While the number of Midwest acres planted to grapes has climbed slowly over the years, the number of wineries has seen a livelier increase.
In fact, in Missouri, the number of bonded wineries doubled between 1999 and 2005, when the count reached 89. Surrounding states have seen more modest growth in the winery business, but, in places like Oklahoma, there has been quick growth—from just four in 1999 to some 36 in 2005. Anecdotal evidence would suggest the pace of winery openings has picked up in Today’s Farmer territory since 2005.
And, as wineries go, so goes the demand for grapes. Marlin Bates, MU extension horticulturist, recently reported that, “wine grapes in Missouri are enjoying a trendy ascension; there is evidence this movement will continue.” Nationwide, industry statistics include:
• 1.1 million full-time equivalent jobs.
• 934,750 grape-bearing acres, $3.5 billion in farm
gate grape sales.
• 4,929 wineries in 2005, up from 2,904 in 2000,
a 70 percent increase in 5 years; wineries now
in all 50 states; $11.4 billion in winery sales
revenues.
• $2.7 billion in distributor share of American wine
revenue; $9.8 billion in retail and restaurant share
of American wine revenue; 27.3 million wine-related
tourist visits; $3 billion wine-related tourism
expenditures.
Of course, California accounts for nearly all table grape production and about 90 percent of the nation’s wine production, with New York and Washington State each at about 3 percent and the rest of the states at 4 percent combined. But, there is still a growing demand for local grapes.
To find more about how to grow grapes, visit the Missouri Grape Growers Association at www.missourigrapegrowers.org, the Institute for Continental Climate Viticulture and Enology at http://iccve.missouri.edu or contact your local University of Missouri Extension office. To learn more about the wine industry, visit www.missouriwine.org.
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What’s pasture worth? Annual MU land rent guide includes pasture Pasture rental might be a handshake deal for many producers, but if you want to see what going rates are, check out the University of Missouri’s annual land rent survey. The most recent report, by Ron Plain and Joyce White, is based on more than 200 survey responses collected in 2008. Rates reported by people who rated their pasture as “good”—requiring less than 4 acres per 1,000-pound cow per year—averaged $29.95 per acre per year. Reported values ranged from $10 to $65 per acre. The average rate for fair/poor pasture, which requires more than 4 acres per cow per year, was $22.34. Rates ranged from $7.50 to $40 per acre per year. Only a few reported timber pasture, which averaged $7.03 per acre. A few respondents indicated that they rent pasture on a per-head per month basis. The average for that was $9.44 per cow/calf per month. Rents ranged from $4 to $27 and the average time on the pasture was 7.1 months. Complete information about farmland rental rates can be found online at http://agebb.missouri.edu/mgt/bull8b.htm. Of course, the report can’t be the sole source of information used to determine pasture cash rent, but it's a starting point to understand the regional market. |
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Land prices adjust
A ‘correction’ still awaits
Midwest agricultural land prices were bolstered by biofuels and a strong general economic climb in recent years. Of course, that very economic climb was torpedoed by the sub-prime mortgage debacle and subsequent clinching of credit supplies. So while housing prices have plummeted in many markets, and commodity prices have followed energy markets from record highs to volatile middling, there has been a curious watch on ag land prices. When will they slip? For parts of Missouri and the Plains states to the west, land prices already have, though slightly. According to the Kansas City Fed, ag land prices took a dip in the last quarter of 2008 and seem to have stabilized in 2009. The KC Fed survey of agricultural credit conditions showed marginal farmland in its district dropping in value owing to lack of buyer interest. However, non-irrigated cropland climbed slightly while irrigated cropland remained flat. Ranchland continues to suffer loss in value due to a weak livestock sector. Bankers surveyed by the Fed expect values to hold steady in 2009.
Meanwhile, Paul Ellinger, a professor in the Department of Agricultural and Consumer Economics at the University of Illinois opines that there are secondary impacts of the financial crises that have affected agricultural land prices. In a piece he wrote for the economics magazine Choices, Ellinger laid out the basics: The softening of farmland markets is being influenced by 1) reduced demand from lower housing development; 2) the wealth and cash flow impacts of a drop in equity prices for many potential farmland buyers; 3) the increase in risk in agriculture resulting in an increase in capitalization rates; and 4) the lower demand for recreational property.
Of course, these factors weigh differently depending on ag land’s proximity to urban centers, the land’s production capabilities and rural amenities.
All these factors remind us why cash is sometimes king. Wrote Ellinger: “At the very least, the agricultural sector will be forced to compete with other sectors for increasingly scarce capital in the foreseeable future. In doing so, the farm sector will be forced to adapt to sources of instability outside of its control.”
Missouri Young Farmers on tour  West central Missouri is one of the state’s leading agricultural regions with top-producing land and a long tradition of successful farm families. This year’s host club, The Santa Fe Agri-Leaders, has put together an in-depth tour to show off the bounty of the area. Stops on the Aug. 2 – 4 tour include: • Heins Family Farms, a new 600+ cow dairy
• United Hog Systems and Zeysing Farms, a farrowing and gilt-developing operation
• Peters Orchards and Market, an apple and peach orchard
• Cedar Lane Greenhouse, a retail horticulture enterprise
• Salyer Farms, a diversified operation with cattle and crops
• Bredehoeft Farms, Incorporated, a diversified cattle and row crop operation
• MidMissouri Energy, a new-generation cooperative ethanol production facility
• Alma Meats, Incorporated, a retail and wholesale meat purveyor
• Peters Family Farms, a diversified cattle and row-crop farm
• Marshall & Fenner Farms, a unique diversified farm partnership of five families
An alternative tour includes cultural stops at Lexington, Mo. and Baltimore Vineyard and Winery. A family registration for the tour is $100. Individual rate is $60. Find a detailed schedule at www.moyftour.info. For more information, contact John Morgan at morganjohnh@hotmail.com or call (660) 909-2259. Registration is underway. |
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