May 20, 2005 | By: Laura Skillman
PRINCETON, Ky.

Vegetable sales through direct markets, especially to restaurants, groceries and farmers’ markets, increased this past year and a recent survey of producers sees those trends continuing in 2005.

The annual Kentucky Produce Planting and Marketing Intentions Survey and Outlook has been conducted since 2002 by Tim Woods and Matt Ernst, with the University of Kentucky College of Agriculture’s Department of Agricultural Economics, to track cropping and marketing practices for Kentucky produce growers. Income from fruits and vegetables has more than doubled since 1997, and income is expected to reach between $30 million and $36 million this year.

The survey represents about 40 percent of all produce acres in the state. Based on survey data, it is estimated that growers using farmers’ markets in 2004 to sell at least 10 percent of their wares increased by 5 percent and is likely to increase again this year. There were 97 farmers’ markets registered with the Kentucky Department of Agriculture last year.

The number of growers selling directly to restaurants has been relatively unchanged since 2002, Ernst said. However, the Kentucky State Parks produce purchasing program, which began last August, is opening new markets in many parts of Kentucky where little local fresh market potential had existed. With 2005 being the first full year of the program, it is anticipated sales will increase. This is a potential $500,000 market in fresh produce for growers. Capturing half of that would have a large impact on Kentucky produce growers, he said.

Ernst said they also anticipate that as growers gain experience with the state parks, they also may approach other area restaurants and similar markets in coming years.

While sales to restaurants make up only a small part of the overall market, it fills an important niche for those also selling to farmers’ markets or who have other niche markets, he said. 

On the wholesale level, growers continue to shift away from lower value crops such as sweet corn and pumpkins to higher value crops such as peppers, specialty melons, broccoli and niche crops. This shift has resulted in decreased vegetable acres primarily as some larger cooperative producers have exited the market. Cooperatives have reduced their production acreage by more than 200 acres or 15 percent from 2004, according the survey data. The shift to higher value crops is an effort by cooperatives to increase sales over 2004 levels.

In spite of decreased acres, vegetable and fruit production will continue to rise as producers are discovering other, profitable markets, including direct marketing.

Wine grape production in Kentucky more than doubled in 2004 and Kentucky wineries increased their use of state-grown grapes from 55 percent to 71 percent. Kentucky wineries appear to be a continued future market of local grape producers as wineries continue to increase their use of locally grown grapes.
Increased usage can be attributed to more wine grape plantings maturing, growers improving their cultural techniques and wineries continuing to expand their production and sales. As a result, gross farm receipts for grape sales in 2005 will increase.

This year many produce growers are opting out of tobacco production. While consistently 45 percent of the survey respondents have grown tobacco on their farms, 17 percent of those who grew it in 2004 are not going to in 2005. Two-thirds of the growers discontinuing tobacco production are considering expanding the produce portion of their farming 
operation. This shift will continue to be monitored as the transition away from a federal tobacco program progresses.

Ernst said produce continues to be an additional source of income for many Kentucky farms and as marketing and management expertise increases, gross sales from this sector should continue to increase at a rate of 5 to 10 percent a year.

The complete survey and outlook report will be available soon on UK’s New Crop Opportunities Center Web site.

Contact: 

Writer: Laura Skillman 270-365-7541 ext. 278

Contact: Matt Ernst, 859-257-7272 ext. 223