The COVID-19 Pandemic Forces Some Farmers to Pivot to Direct-to-Consumer

by Jodi Helmer

4/01/20

Farmer Evan Chender has sold 100 percent of his fresh produce to restaurants since he started farming in Weaverville, North Carolina, in 2013. In March, after North Carolina Governor Roy Cooper issued an executive order forcing restaurants to close for dine-in services, chefs started canceling their orders. Chender watched sales plummet from $2,500 per week to just $250 and started rethinking how he was going to get the fruits, vegetables and herbs he’d been growing for local restaurants from farm to table.

“I had just two [restaurant] accounts left that were trying to do takeout,” he says. “The only viable market that still exists is direct-to-consumer.”

The Promise of the CSA Model 

Chender, farmer/owner of The Culinary Gardener, knew that it would be hard to sell mass quantities of edible flowers and esoteric (and expensive) vegetables like tardive, rutabaga and Chinese artichoke to home cooks so he ripped out the crops and replanted them with popular produce like lettuce, cucumbers, zucchini and tomatoes and started selling shares through a community supported agriculture (CSA) model.

“At this time of the year, farmers have the least amount of cash on hand because of all of the purchases they made to get ready for the season,” he says. The upfront cash infusion of a CSA “could mean the difference between a farm that survives and a farm that dies.”

Farmers with long-established direct-to-consumer sales channels such as CSAs and farm stores have continued selling pastured meats, cheese, eggs and local produce while taking precautions such as wearing gloves, practicing social distancing and engaging in contactless transactions. The pandemic has forced farmers who sold to restaurants to develop new outlets for their harvests.

“Just as in every other corner of the nation’s economy, farmers and farmworkers are feeling the impact of coronavirus,” says Lisa Misch, Just Foods project manager at Rural Advancement Foundation International (RAFI)-USA. “Since most farms operate on a very thin margin, unexpected changes to income can make things incredibly unstable.”

Nationwide, restaurants are closing or limiting operations to takeout to help curb the spread of the coronavirus or COVID-19 and several cities and states have also shut down their seasonal farmers’ markets during the pandemic. 

The Farmers Market Coalition is pushing for markets to be considered essential services as part of a group of COVID-19 stimulus packages but, even if markets remain open, it might be too late for farmers who are not regular vendors to secure booth space.

Dominic Palumbo set up a drive-thru farm stand at Moon in the Pond Farm in Sheffield, Massachusetts, after the future of the local (indoor) farmers’ market became uncertain. Customers place their orders for meat, produce and value-added products like honey, cider and syrup in advance, select a pickup time, pay online and drive up to grab their pre-packed order. Both regular customers and first-time shoppers have taken advantage of the contactless option.

“We’ve had several new customers make substantial purchases, which leads me to believe that people are really searching for local produce,” Palumbo says.

In Search of a New Normal

The closure of popular CSA distribution sites like restaurants and churches has forced farmers to seek out new spots for customers to pick up their produce  and some farmers are allowing customers to purchase week-to-week instead of committing to an entire season. 

Chris Duke grows 12 acres of certified organic produce at Great Oak Farm in Mason, Wisconsin, and sells it through a farmer cooperative, Bayfield Foods. Their spring CSA, which runs weekly from June to October, has been popular but the co-op has already been notified that one of the churches that served as a regular pickup point would not be available during the pandemic. 

“Once our regular CSA season starts, we have no idea whether our regular distribution sites will even be open,” Duke says.

Concerns over gaps in their supply chain coupled with the loss of wholesale and restaurant accounts as a result of coronavirus led the 18 cooperative members to switch things up. The farmers started offering weekly produce box deliveries and the response was swift. In the first two weeks, sales almost doubled and Duke hopes it’ll continue to grow.

“If we have to start delivering hundreds of CSA shares each week when the season begins, it’s better to get the logistics worked out now,” he says.

Restaurant closures have also changed how Moon Valley Farm operates. Farmer Emma Jagoz sold an estimated 50 percent of the produce from her Woodsboro, Maryland, farm to eateries in Maryland and Washington, D.C., before the coronavirus hit. The crops were already popping up when restaurants started shutting down. In response, Jagoz expanded her CSA program, increasing the number of available shares and offering boxes starting in March instead of May. 

Jagoz sells boxes for $35 per week and expanded home delivery service to reach more customers. She also changed how orders are processed: Delivery drivers wear gloves and leave CSA shares on front porches; customers order online and pay with a credit card so the entire process is contactless.

Although she expects the pandemic will have little impact on her overall revenues thanks to the quick decision to expand her CSA offering, Jagoz acknowledges that a lot of farmers are scrambling to adapt to restaurant and farmers market closures.

“It’s spring, and we can’t ignore the transplants that we’ve grown so, for the most part, we’re planting on,” she says. “I expect to survive because I’m confident that now, more than ever, people need access to healthy produce,” she says.

Areas of Concern

So far, the pivots appear to be working but it is still too soon to tell if the uptick in direct-to-consumer sales can be maintained. Food spending declined seven percent during the Great Recession and the economic impact of the pandemic could have long-term consequences, especially for low-income households.

“Many farmers markets across the country accept SNAP payments on behalf of all the participating vendors,” Misch says. “Now that many markets are closed…SNAP customers have much lower access to local food. At this time, there is no way to accept SNAP payments through online farm stores and most farmers are not certified to accept SNAP payments in person. For whatever new, innovative solutions farmers come up with to sell their products, we also need to seriously consider how to make this food accessible to all households.”

Labor is also a concern. 

The U.S. State Department announced restrictions on processing H-2A visa applications for farmworkers due to coronavirus concerns but reversed its decision over concerns about farmworker shortages. The nonprofit Farmworker Justice expressed concern that farmworkers have inadequate access to healthcare and their low wages, lack of health insurance and limited resources at migrant health centers puts them at risk during the coronavirus crisis. Reports of illness have already led to closures and reduced production at several meat processing facilities.

Can it Add Up? 

Even a successful pivot from wholesale accounts to direct-to-consumer sales might not be enough for all of these farmers to make up for lost restaurant sales. 

Chender, who sells one quart of edible flowers to chefs for $20, priced his CSA shares at $25. He’d need to sell 300 CSA shares per week to make up for the lost income from the specialty crops he grew for restaurants but lacks the infrastructure to produce, box and distribute fresh produce at that volume. Switching up business models, he says, will decrease his 2020 income by at least 65 percent. Still, Chender remains optimistic about the potential of direct-to-consumer sales. 

“We sold 90 boxes of produce our first week, which was a lot more than I expected,” he explains. “I hope things will go back to normal in 2021 but I might maintain the CSA; it’s an extra source of guaranteed revenue and could fit well with the work we do with restaurants.”

Cheesemaker Allison Lakin is also hopeful that the pivots she made at Lakin’s Gorges Cheese in response to COVID-19 will help see the Waldoboro, Maine farm through the pandemic. 

The Maine cheesemaker went from purchasing 150 gallons of milk per week from a neighboring farm to just 40 gallons last week, which means the farmer who depended on her for milk sales is also losing revenue.

Losing restaurant sales, which account for 85 percent of her revenue, to COVID-19 closures has forced Lakin to stop making soft cheeses — and scrambling to sell the ultra-perishable fresh cheeses she has on-hand — to focusing on hard cheeses that last longer and can be shipped to customers. 

On a positive note, the onsite farm store, which has shifted to a contactless order and pickup system, is drawing some customers and online sales have spiked thanks to a growing awareness about the importance of supporting local farmers through the pandemic. Lakin is hopeful the shifts will be sufficient for her business to survive the pandemic.

Palumbo believes farmers are resilient in the face of challenges and will figure out how to keep growing and selling local food. 

“Things happen out here all the time; the weather changes, machines break [so] this line of work demands that we reprioritize on a daily basis,” he says. “If there’s anything good that will come of this, it’ll be that people realize the massive importance of supporting the local food system.”

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