The wholesale produce auction: An alternative marketing strategy for small farms

Abstract

Small farmers urgently need alternative marketing strategies if they are to achieve the goals of a more sustainable agriculture. This study was a survey of nine Pennsylvania wholesale produce auctions, all established between 1984 and 1998. The main goals of the auctions were to serve local communities, provide high-quality produce to local consumers and make profits. The results showed that the auctions typically employ an average of 7-10 people per growing season. The five most common commodities sold were cantaloupe, watermelon, tomato, pumpkin and sweet corn. Asparagus and onions were the least sold during a regular growing season. In terms of market share, roadside market operators purchased the largest proportion of produce (40%), followed by farmers (27%), chain food stores (16%), independent grocery stores (11%) and restaurants (6%), making up an average annual gross sale of $3.5 million per auction. The study revealed that the nine Pennsylvania produce auctions were successful in meeting their goals. The reasons for success included private ownership, excellent quality and freshness of produce, good location, local produce recognition, clientele availability and customer-oriented business. The auction managers identified some weaknesses, including inconsistent and poor grading, limited space in the auction facility, produce unavailability and limited volume, lack of cooling facility, price fluctuation and slow service. The study indicated that local wholesale produce auctions are a useful marketing alternative for small farmers in Pennsylvania, by providing marketing outlets and convenient shopping centers for sellers and buyers; by securing a source of fresh and locally grown produce not found in traditional wholesale terminal markets; and by allowing exchange and networking among farmers and buyers. Consequently, the wholesale produce auction can be a useful model for an alternative marketing strategy and can provide considerable benefits to small farm and rural communities.