Agribusiness On The Grow

Before buzz words such as “agribusiness” and “agritourism,” or even the ever-popular refrain “buy local” were even thought of or really considered cool in northern Michigan, there were people in the business of farming and producing goods locals could enjoy. Yet, they were largely invisible to the general public.

Take Shetler Family Dairy in Kalkaska as but one example. My parents George and Sally Shetler started the dairy operation in 1979 and 20 years later began bottling and distributing their own milk, and since that time have expanded their agribusiness to include several other value-added products. Little did I know that my upbringing on the farm would define my eventual career path – that of a small business consultant with an intimate education in the local economy’s agribusiness sector.

No longer are farming and agri-food businesses operating behind the scenes.

While the Northwest Michigan Small Business Development Center (SBDC) – a program of Networks Northwest and part of a much larger statewide network of SBDC consultants funded by the Small Business Administration and Michigan Economic Development Corporation – works with any type of business, its leaders have noticed an interesting trend with the overall customer base. In 2013, approximately 45-50 percent of the SBDC’s regional portfolio consisted of agricultural or agribusiness clients. Just one year later, the percentage increased to 63 percent of its 286 total clients – a 22.9 percent increase in agriculture business clients from 2013.

Agribusiness is defined as “an industry engaged in the producing operations of a farm, the manufacture and distribution of farm equipment and supplies, and processing, storage, and distribution of farm commodities.” Believe it or not, that definition includes not only the traditional family-owned farm growing the commodities, but everything food and beverage- related, such as restaurants and delis, wineries, breweries and “agritourist” destinations.

Somewhere along the way, food and farming became cool. Now there is a race to the finish line to be the first at re-introducing old products in new ways, growing new crops such as hops or hard wheat or lavender, inventing entirely new products, or developing specialty foods to meet the demand of the ever-increasing number of food and beverage enthusiasts. What’s more, almost every new or existing business is trying to figure out how they can also tap into the agritourism component for even broader appeal in the marketplace.

No longer is a farm simply known as a farm – it’s an agribusiness – and farmers are more sophisticatedly known as entrepreneurs, or even “agripreneurs,” and encompass everyone from the small rural community-supported agriculture (CSA) model to the larger, more traditional business model and the lifestyle of those involved. The SBDC recently completed a multi-week workshop instructing a dozen agripreneurs on developing business plans and launching their new businesses or product lines. It’s certainly an exciting and innovative time in this industry.

And there’s no sign of it slowing down. According to Northwest Michigan Works! Business Services, growth in the agricultural sector is projected to continue at a rate of 16 percent through 2020, a rate that is ten times the projected rate of national growth in the sector over the same time period. It’s important to note, however, that this projection does not include the also substantial growth in related food processing micro-businesses.

Annie Olds is a small business consultant and the regional director of the Northwest Michigan Small Business Development Center, which serves small business owners across all industries in the 10-county region with start-up assistance, growth support, no cost one-on-one business counseling, educational and training opportunities and market research. Connect with the regional team of consultants by calling 922.3780; networksnorthwest.org/business/small-biz-tech/sbdc.htmlnorthwestmichigan.com.

 

 

[INSERT CHART]

Impact Category          Agricultural Sector      All Service Sectors

No. Clients Served      62.9%  286

Start Ups         29.2%  24

Jobs Created    57.2%  100.5

Jobs Retained  66.7%  45

Capital Formation        67.0%  $ 6,434,765

No. Companies Tracked for Increased Sales   41.7%  12

Sales Increase  69.4%  $ 1,245,030

 

 

 

 

 

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