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South Dakota Ag News Headlines
Formation of South Dakota's First 'Food Hub'
South Dakota Ag Connection - 04/29/2016

The concept of a "food hub" -- a way for local food producers to aggregate their products and distribute them to a broader market, such as restaurants and institutions - is becoming a reality for a group of farmers in southeastern South Dakota.

In 2014, SDSU Extension began working with this group of food producers who were interested in supplying to local markets. Through a series of meetings, outreach and grant funds over the past two years, the group - now called Dakota Fresh - hopes to make their first sales by May 2016. Dakota Fresh is focusing on supplying to markets in Sioux Falls, Brookings, and possibly Sioux City.

SDSU Extension Community Development Field Specialist Kari O'Neill has worked extensively with the growers involved in Dakota Fresh to bring all of the pieces, particularly grant funding, together for the effort.

Detailed planning efforts began in October 2014 when SDSU Extension was awarded a one-year $25,000 planning grant from USDA Ag Marketing Service through the Local Food Promotion Program. That money helped recruit interested growers, host meetings, and gather resources to explore the food hub concept, O'Neill explains. Specifically, 20-25 local food producers and eight resource providers met regularly in 2015 to create a strategic plan and choose a structure for the food hub.

As well, SDSU Extension organized a field trip allowing interested producers to travel to Illinois and Wisconsin to visit existing food hubs and learn about their structures.

O'Neill reports that from those experiences, the group determined that a LLC structure made up of member farmers with a cooperative mindset was the preferred structure. They have since established the Dakota Fresh LLC and created a five-member board of directors.

Membership has been set up to include a one-time $1,000 fee and an annual membership fee of $100. Once operational, a percentage of sales will be retained by the LLC to pay operating costs, as well as pay the salary for the food hub manager.

Currently, 14 farmers have committed to the effort as duespaying members. They represent a diverse group and plan to offer fresh greens and herbs, meats, eggs, honey, and many varieties of vegetables and fruits.

In 2015, a $10,000 expansion grant was awarded from USDA Rural Development in South Dakota to focus on marketing Dakota Fresh, and an additional $2,500 was leveraged from a Bush Fellowship grant to host "Meet the Farmer" receptions in four locations in Southeastern South Dakota.

O'Neill explains that these grants allowed members of Dakota Fresh to meet and network with potential customers. The receptions were held in Sioux Falls, Brookings, Wagner and Yankton and attracted chefs, food service managers from schools and other institutions, as well as grocers. O'Neill say interest from the medical community has also been strong.

During two of the receptions, Stewards of the Land food hub manager Marty Travis from Illinois and Chef Dustin Allen from Edge Restaurant in Peoria, Ill., were on hand to share their experiences and provide testimony to attendees to the importance of relationships between farmer, buyer and consumer.

O'Neill reports that the receptions were very well-received, and from follow-up surveys conducted with attendees, 24 potential customers indicated they would purchase food from Dakota Fresh in the future.

In September 2015, SDSU Extension was awarded a $100,000 grant from USDA's Ag Marketing Service for implementation. O'Neill says, "This two-year grant will have a great influence on the start-up of Dakota Fresh and enable producers to move ahead with their ideas." During the last quarter of 2015, Dakota Fresh was able to incorporate, hire a part-time manager and is now making plans to choose possible aggregation site(s).

Other efforts going forward will include development of individual farm safety plans, continued relationship building with local customers and establishing an online presence and ordering system, as well as pricing.

Looking ahead, O'Neill says, "The hope is that Dakota Fresh will be sustainable and allow the producers involved to grow and expand. We also hope this concept will create new opportunities for young farmers to get started and have a market."

Once Dakota Fresh is up and running, O'Neill anticipates the food hub model may be applied elsewhere within the state. She says, "We've had a lot of interest from other groups of growers in the state. I've been meeting with several of them to share and explain the process. They are watching."

She adds, "It's taken a lot of patience and the grant pieces need to fall into place, but there's certainly potential across the state for more food hubs. Different markets exist."

O'Neill emphasizes that the development of Dakota Fresh has been a collaborative effort. In addition to SDSU Extension, partners include Dakota Rural Action, South Dakota Department of Agriculture, South Dakota Specialty Producers, USDA Rural Development, South Dakota Buy Fresh/Buy Local, HyVee and Birmingham/Cwach Law Firm.

More about Dakota Fresh

-- In December 2015, Matt Stone of Yankton was hired as a part-time manager for Dakota Fresh.

-- The newly elected five-member board of directors includes: Mary Storo, Beresford; Jared Hanisch, Humboldt; Adam McClary, Parker; Lisa Smith, Pipestone, MN; and Tammy Andrews, Beresford.

-- The organization's mission statement: Dakota Fresh strives to produce and provide high-quality, safe, healthy food to our region while fostering strong relationships between producers, customers and our communities.

-- Former South Dakota Secretary of Agriculture Lucas Lentsch has said: "Dakota Fresh food hub will allow restaurants, institutions, and consumers to have greater choices in access to local foods. Additionally, it will give farmers more choices in avenues to market the products of their labor with their local community or region. Growing local foods in South Dakota creates new opportunities for growth and development in our rural communities."


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