Progress Report 87, January 2020

IN THIS ISSUE . . .

Pepper Leads Tennessee’s Dairy Innovation Initiative ......................................................................... Page 1 Dugger Named Coordinator for AgrAbility in Tennessee .................................................................... Page 2 CPA Conducts Joint Staff Meeting with TDA Business Development Staff ....................................... Page 2 Census of Agriculture Shows Continued Growth in Value-Added Agriculture ................................. Page 2 Listing of USDA Livestock Slaughter Facilities in Tennessee Updated ............................................. Page 3 UTIA Ag Day Provides Opportunity to Connect CPA with Alumni, Friends, and Supporters ....... Page 3 Team Assembled to Evaluate Small-Scale Dairy Processing Equipment ............................................ Page 3 CPA Collaborates in County Agriculture Asset Mapping .................................................................... Page 3 Giorgio and Holland Complete “7 Habits of Highly Effective People” Training ............................... Page 4 Center Hosts County Agriculture Agents in Two-Day Training .......................................................... Page 4 Business Planning and Marketing Education for Tennessee Farmers Project Wraps Up ................ Page 4 Specialty Crop Hops Team Participates in Study Tour to Washington and New York State .......... Page 5 Sustainable Value-Added Agriculture Business Training and Crop Tours ........................................ Page 5 Project Updates ......................................................................................................................................... Page 5 Pepper Leads Tennessee’s Dairy Innovation Initiative A team of collaborators from four departments within the University of Tennessee Institute of Agriculture as well as the Tennessee Department of Agriculture, Middle Tennessee State University, Tennessee Dairy Producers Association, and other dairy industry specialists have received a Dairy Business Innovation Initiative grant from USDA. Hal Pepper, financial specialist with the Center will coordinate the Tennessee effort. The project is aimed at assisting Tennessee dairy farmers in diversifying dairy product markets, reducing risks, and developing higher value uses for dairy products. Educational programs to assist them with business development strategies that diversify their farm income beyond the production of milk will also be developed. This project will also provide on-site analysis of processing, packaging, and marketing of dairy products. The Center is excited to be collaborating with the Tennessee Department of Agriculture Business Development Division and many other industry partners.

Helping Farmers Develop Value-Added Enterprises Center for Profitable Agriculture Quarterly Progress Report

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Dugger Named Coordinator for AgrAbility in Tennessee Troy Dugger, program coordinator with the Center for Profitable Agriculture, has been named state coordinator for the Tennessee AgrAbility Project, effective January 1, 2020. Agriculture is one of the most hazardous occupations in America. The Tennessee AgrAbility Project provides services to farmers, farm workers, and family members with disabilities across the state. The aim of the AgrAbility project is to help these individuals and families to continue living and working as productively as possible. Tim Prather, Extension specialist in the Department of Biosystems Engineering and Soil Science at the University of Tennessee Institute of Agriculture, served in this role for the past twenty-five years. Prather’s retirement at the close of 2019 initiated the change in the state coordinator program position. Two area specialists work with this project across the state. Joetta White serves the Western Region and works out of the Gibson County Extension Office, and Eileen Legault serves the Eastern Region and is housed in the Eastern Region Extension Office in Knoxville. AgrAbility offers several services at no cost to program participants. These include on-site assessments; recommending appropriate assistive technologies; providing informational materials; providing education/training opportunities through workshops, conferences, and seminars; referring clients to other service providers for potential assistance; and assisting military veterans seeking employment in agriculture-related occupations. The AgrAbility Project does not provide direct funding or equipment but works closely with the state Vocational Rehabilitation Departments and other funding sources to help clients find needed assistive technologies and modifications. CPA Conducts Joint Staff Meeting with TDA Business Development Staff CPA staff met with the Tennessee Department of Agriculture’s Business Development team in November. The purpose of the joint staff meeting was to make introductions, provide program overviews, and discuss potential collaboration on future projects. Everyone enjoyed the opportunity to network and interact with new members of both teams as well as reconnect with old acquaintances. Each team provided an update on the specific program areas they cover as well as the individuals involved in those program areas. Opportunities for future collaboration and discussions of commonalities in our missions promoted a robust conversation about working together to better promote our programs throughout the state. Census of Agriculture Shows Continued Growth in Value-Added Agriculture

The United States Department of Agriculture’s National Agricultural Statistics Service conducts a Census of Agriculture every five years. The census is designed to provide “a comprehensive picture of U.S. Agriculture.” As a part of the “comprehensive picture,” the census has been collecting data related to value-added agriculture, including value-added agriculture products, direct sales, and agritourism. NASS most recently conducted a Census of Agriculture in 2017, and results were released in April 2019. Much of the data contained in the census for Tennessee paints a positive picture of value-added agriculture and related enterprises in the state. The Center’s Holland, Leffew, Dugger, and Pepper recently published A Snapshot of Value-Added Agriculture and Commonly Related Enterprises (Extension publication SP 807) in November 2019. The publication provides Tennessee value-added agriculture data from the most recent Census of Agriculture. Using previous Census of Agriculture data, the publication shows how the state’s value-added agriculture sector

and related enterprises have grown over the years. You can find the full publication at https://ag.tennessee.edu/cpa/CPA%20Publications/SP807_Census-Publication-8-web.pdf

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Listing of USDA Livestock Slaughter Facilities in Tennessee Updated Finding a processor that can custom slaughter under USDA inspection is very important to many of our value-added beef producers in Tennessee. The Extension publication Listing of USDA Livestock Slaughter Facilities in Tennessee provides a list of all USDA-inspected slaughter facilities in Tennessee available for producers wanting to process livestock under USDA inspection. USDA inspection is required for producers to be able to sell retail meat cuts directly to consumers. The publication was updated in September 2019 and lists the fifteen USDA-inspected slaughter facilities in Tennessee available for producers to send livestock. Each processor listed has a business address, phone number, and the animal species they were accepting for slaughter at the time the publication was updated. The publication can be accessed at https://ag.tennessee.edu/cpa/CPA%20Publications/D3%20updated%209.30.19.pdf

UTIA Ag Day Provides Opportunity to Connect CPA with Alumni, Friends, and Supporters Jared Bruhin attended UTIA Ag Day before the Tennessee-Georgia football game on October 5, 2019, representing the Center. Ag Day is a great opportunity for CPA staff to visit with co-workers on campus, alumni, and friends. Over 100 people came by the CPA booth that afternoon to chat and learn more about resources offered by the Center. Bruhin also had the pleasure to meet US Secretary of Agriculture Sonny Perdue and discuss the programs and resources the Center provides to producers across the state. Team Assembled to Evaluate Small-Scale Dairy Processing Equipment The five-member leadership team for the small-scale dairy processing work group has received $105,000 in funding support to launch the project. A list of small-scale dairy processing equipment has been assembled and will be utilized as the basis for developing three different processing models for (1) fluid milk bottling, (2) cheese making, and (3) ice cream manufacturing and bottling 2 percent milk. Financial, market and feasibility analyses will be developed for each of the modeled systems. The project is being led by Liz Eckelkamp (Animal Science), Rob Holland (Center for Profitable Agriculture), Mark Morgan (Food Science), and Kim Jensen and David Hughes (Agricultural and Resource Economics). CPA Collaborates in County Agriculture Asset Mapping

The Center for Profitable Agriculture is currently working with two counties in Tennessee conducting an agricultural asset mapping report. The report is based on a combination of focus group meetings with local agricultural, forestry, and economic leaders and the use of secondary data. The main goal of this mapping process is to help the local leaders identify agricultural assets that could be used to support/enhance economic growth within the county. Another goal of the mapping process is to help increase the understanding and value of agriculture. The initial meeting is to collect a map with locations of all the local businesses, physical assets, opportunities, and challenges as determined by the focus group members. Another meeting is then planned with the group within four to six months

of the initial meeting. This second meeting is designed to allow the focus group members an opportunity to view a presentation developed from their suggestions and combined information from a secondary data analysis. Based upon this presentation and discussion, the committee then determines what areas become their program focus. To complete the process a web-based publication is developed for use by county leaders as a tool to assist in economic development. Currently the Center for Profitable Agriculture is working with Extension in Perry County in the Western Region, Grundy County in the Central Region, and will be working with an Eastern Region county. David

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Hughes and Hannah Wright with the Department of Agricultural and Resource Economics, and Troy Dugger with the Center for Profitable Agriculture along with the county Extension director in the above counties have conducted the planning sessions. This program is funded through a USDA Rural Development Grant. Giorgio and Holland Complete “7 Habits of Highly Effective People” Training A “7 Habits of Highly Effective People” workshop was offered at the Rutherford County Extension office on October 29-30, 2019. Kim Giorgio and Rob Holland from the Center attended the two-day work session. As part of the session participants completed a self-assessment prior to the workshop. This assessment also involved their leader and others to provide feedback. During this intensive training, skills necessary to be effective in their professional and personal lives were learned. Center Hosts County Agriculture Agents in Two-Day Training

The Sustaining Tennessee Farms with Value-Added Agriculture and Alternative Crops Agent In-service was held November 19-20, 2019, in Maury and Giles Counties. The training included a combination of classroom sessions taught by eight Extension specialists and tours of six value-added agriculture enterprises. The in-service was funded by the Sustainable Agriculture Research and Education (SARE) Program and UT Extension Agricultural and Natural Resources and Community Development. Thirty agents from across the state participated in the event. Topics discussed were Trends in Value-Added Agriculture, Direct Marketing and Agritourism, Resources

Available from the Kentucky Center for Crop Diversification, Hops Production and Marketing, Livestock Processing Feasibility, Poultry and Egg Processing and Marketing, Grains for Brewing and Distilling, Hemp Economics, and Marketing and SARE. Tour stops included Tallgrass Meat Company, Asgard Brewery, Glendale Farm, Light Hill Meats, Hickman Farms Millhouse, and Tenn South Distillery. Business Planning and Marketing Education for Tennessee Farmers Project Wraps Up The Business Planning and Online Marketing Education for Tennessee Farmers project provided educational opportunities to help participants manage financial and marketing risk by developing business plans and implementing cost-effective online marketing strategies. Tennessee farmers involved in value-added, direct marketing and agritourism enterprises were the intended audience. The program included:

• An eight-session seminar series, “Building a Sustainable Business” workshop series. • Three sessions on business planning in 2019 Memphis New Farm Academy. • Two day-long DeviceReady Workshops designed to help producers manage their overall • online presence. • Four daylong, hands-on Facebook 101 Workshops. • Twelve-month Online Marketing Webinar Series covering topics such as social media trends, email marketing,

and effective use of social media platforms. • Four Farmers Market Vendor Boot Camp Workshops including sessions on business planning basics and digital

marketing trends. A total of 516 people participated in the educational programs offered. A total of 235 participants reported their knowledge of marketing fundamentals, tools, and/or techniques. Of these, 229 reported developing written goals for implementing new or improved marketing strategies, and fifty-one reported implementing strategies learned to improve the effectiveness of their marketing efforts. Eighty-five participants reported increasing their knowledge of business planning to evaluate on-farm investment decisions, and four developed a business plan. Funding for the project was provided by the Southern Extension Risk Management Education Center and the United States Department of Agriculture’s National Institute of Food and Agriculture. (This material is based upon work supported by USDA/NIFA under Award Number 2015-49200-24228.)

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Specialty Crop Hops Team Participates in Study Tour to Washington and New York State

Members of the UT Extension Hops Initiative participated in an on-site study tour of hops farms and hops processing enterprises in Washington state on June 23-25, 2019. As part of this tour, two processors, two farms, and Hop Growers of America were visited. The study tour was developed as part of the Opportunities for Specialty Crops in Tennessee: Focus on Hops project, which was made possible by funding from the USDA Agriculture Marketing Service. Members also participated in an on-site study tour of hops farms and hops processing enterprises in New York state on August 15-16, 2019. As part of this tour, three farms and Cornell University were visited.

Sustainable Value-Added Agriculture Business Training and Crop Tours A unique training opportunity was developed during 2019 for various UT Extension specialists, county Extension agriculture agents, and staff members of the Tennessee Department of Agriculture. The project was titled “Studying Grapes, Grain and Hops Production and Processing as Sustainable Enterprises for Beverage Manufacturing in Tennessee: Farm and Business Visits for Professional Development.” The purpose of the training project was to “visit with existing Tennessee grape growers, hops growers, other specialty crop growers, wineries, and distillers to: (1) learn from their experiences, (2) identify needs, challenges, critical success factors, and opportunities, (3) inquire about their use of local agricultural products, and (4) share thoughts and insights.” The visits were designed to provide opportunities for Extension and TDA personnel to learn about the production, processing, marketing, and procurement practices of local farms and value-added agriculture businesses. From July to November 2019, 29, on-site visits were conducted in seventeen counties with twenty-three Extension and TDA personnel participating. Project Updates

Calculating Cost of Production Is Critical for Value-Added Food Businesses When operating a value-added food business, it is essential that prices be set high enough to cover costs and still be in line with the ability to pay by targeted customers. Calculating the per unit cost of producing packaged food products is not always easy, especially when there are many variations in the product line, such as flavors and package sizes. In addition to per unit costs, overhead costs, operating costs, and labor costs should also be considered. Food entrepreneurs who know their costs of production can consider various break-even scenarios and can better set prices that lead to business profits.

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