Despite Setbacks, FarmFED Co-op Nears Phase 1
Central Illinois project aims to help farmers find new and bigger buyers
FarmFED Co-op Rises Again After Challenges
The Farm-Fresh Enterprise Development Cooperative, aka FarmFED Co-op, burst upon the Illinois local food scene in July 2021. Its plan was to build an innovative co-op produce processing facility, one that would provide Central Illinois farmers with greater income assurance and access to consumers — including large institutional buyers such as schools and hospitals — who want more local food but have difficulty finding it.
The project was initially led by the married couple of Jeff Hake and Katie Funk, partners in Funks Grove Heritage Fruits & Grains Farm in McLean and activists in the local food and young farmers movements. I’d known Jeff for some years and he gave me the tip that made the FarmFED launch our first breaking news story since Local Food Forum launched in April 2021.
The project got off to fast start, selling co-op shares totaling $147,000, greatly exceeding their $100,000 goal. But the initial, optimistic plan to open for business in 2022 ran into major obstacles. The ongoing disruptions caused by the COVID pandemic and the ensuing inflation spike undermined some of the farms that were expected to be co-op suppliers. Then the building the co-op has purchased in the village of Mount Pulaski turned out to be insufficient for the operations needs.
Given this background, it was a pleasure to attend a talk at the recent Everything Local Conference in Springfield given by Cindy Jackson, FarmFED’s general manager since October 2021, who revealed that the co-op appears on track for a phased opening beginning this May.
As Cindy explains in the excerpts below, they will start small with Phase 1, working with eight to 10 local farmers to test their processes and make any refinements necessary (see photo at top for specifics). A more expansive Phase 2 may launch as early as 2025.
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We had a lot of really supportive community members in Mount Pulaski... They started convening meetings back in, I think, 2017 with about 20 people. By the time they got to 2019, they had like 85 or 90 people, not a bad turnout for a community of 1,500... In 2019, they received a technical assistance grant from the EPA and the USDA... What they provided were experts to come in, help them do a very in-depth market analysis of their community strengths, weaknesses...
When their grocery store closed, that left Dollar General as the only food resources less than 20 minutes away... You're in the middle of an open community completely based on agriculture, there's no fresh food available. That's a pretty big problem.
It was very much community driven, which I feel like is a lot of the reason it's had such success... This community wanted to invest in their community, in their town square, and in a place where they would be able to go to procure locally produced products...
I did a little bit of research and I found an amazing website, FCI, Food Co-op Initiative. They're a nationally based nonprofit that really helps they focus more on the grocery store side of the food co-op stuff... Even though we're not going to be entering that retail space... they support everything that the co-op stands for...
During COVID, we all witnessed the failure of our conventional food system... It was it was really difficult, but it opened up people's eyes to some of these infrastructure improvements that are needed...
The very first part of this community action plan that the EPA and the USDA put together with Mount Pulaski was the grocery store, because what they were really missing is that access. In June of 2020, the middle of the pandemic, they opened their doors, which was phenomenal. Over 100 stakeholders helped fund it, and they continue to support it to maintain its success...
As the market got going and tried to procure local products, they started hitting some walls... There's no food hub in central Illinois... There's no distribution, there's no aggregation. So that was where the conversation led to the food hub development alongside that cooperative grocery store model... So we started in ‘20, and in ‘21 the first thing that happened was the [Illinois Economic Development Program] came in and gave us funding, so that we were able to bring people on and hire professionals put together our initial business plan... They actually provided part of our match for the [federal Local Food Promotion Program] grant we ended up getting awarded. They formed an interim board of directors to get started and went forward to make the coop a legal business entity in Illinois.
Then they... hired interim co-managers, Jeff Hake and Katie Funk, to run the shareholders campaign, put some brand-new stuff together, hit the ground running so that people knew who FarmFED was. And they did a great job doing that.
One of the first things that the interim Board had to do was come up with a mission and a vision for the co-op… So the mission of FarmFED is to connect Central Illinois consumers and producers for their mutual benefit by cooperatively expanding processing infrastructure and market access for local farmers and other producers, and by providing our community with year-round access to locally produced fresh, nutritious food… The vision is a robust regional food system that improves the quality of life in central Illinois by offering larger, more diverse market opportunities to local farmers and other producers and by retaining economic strength and healthy food in our communities…
In 2021, they held a shareholder drive. The goal for this trial was only $100,000. Within three weeks, they were at $147,000… So that really shows you the commitment that the community has making these initiatives work and the commitment that community had to that community action plan that was drawn up by them and the USDA and EPA… It's crazy to me how they garnered 164 members in four weeks.
So this year we are driving towards operations and getting our doors open. This spring, we're going to be holding another equity round to help maintain that operational status...
We have a good three or four months every year where there's nothing really that's going to be able to be grown in any kind of mass production, open field. We've got to find a way to preserve [locally grown product] and make it usable for these institutions, such as schools and hospitals and nursing homes; those are the people that see the most vulnerable of our population, and they don't have access to the most nutritious food available…
We want to make sure that everything that we learn we’re able to share with other people… We'd really love to see establishments like FarmFED throughout the entire state so that we have that really good solid system in place, a food movement throughout the entire state from top to bottom and bottom to top.
The biggest piece FarmFED wanted to do was processing and minimal flash freezing to be able to help schools and hospitals and nursing homes be able to use these products in the offseason… Unfortunately, because of COVID and because of rising input costs and inflation… we had lost a lot of small specialty crop farms, and even a couple of large ones. A couple that were our anchors were gone, they didn't make it through the pandemic. And that led to a lot of tough conversations around our Board table… The biggest problem was losing farms, so we're losing product. In order to process you got to have a pretty good amount of food… We've got to farmers to get certifications that are necessary to be able to jump into the wholesale space…
When we started this whole project, schools were required to take the lowest bid for products. And now because of [Illinois Stewardship Alliance] and all of the diligent work of people in this room and beyond, that's no longer the case… This opens up the door for farmers to be able to get their products in the school lunch, which was really exciting. So this was part of what we got back from them…
Our first business plan was four pages of inspiration, uplifting, fantastic… We were going to do all of the things, we were going to fix the food system all by ourselves. That was very ambitious, very lofty. When we came back with this landscape analysis and really drilled down on what the actual gaps in our system were regionally, it allowed us to go back and phase our project to make it more realistic…
So we went back and we broke out our initial business plan into three phases… The very first phase is one we are hoping to embark on and implement this year, in May, and that's going to be a very simple distribution aggregation service.
To begin with, we're going to work with about eight to 10 farms we've talked to so far. So very small, make this our inaugural season, find our sea legs, so to speak, and get all of our processes in place.
We just voted… to put a bid on a building on the town square. I cannot tell you how exciting that is.
One of the biggest parts of this process… Mount Pulaski is home, that's where we want to be. Mount Pulaski, the village, has been super supportive… We actually bought a building back in 2021. And then we sold it in 2022, because as we dove in and did some evaluation, it just wasn't going to work for our needs. It was a little too retro for what we needed to do for processing and even just food movement..
We're gonna be able to hire up to two staff members to help with the distribution and aggregation. We also plan on offering pickup for farms, because the logistics of moving all of that food around can be really cumbersome for them. We want them to do what they do well and stay on the farm and grow food. And then we can come to the farm and pick the food up and bring it back to our facility for the sales and distribution aggregation of that product.
In the next phase of the funding, that's when we're going to apply for the processing… Phase two is where we're going to come into the minimal processing and cold storage… So maybe just cutting, slicing and dicing… And then… we want to also develop a line of FarmFED produce, it's all locally sourced. There's going to be a lot of different ways for us to offer this flash freezing so that we can roll out our own line of products, as well as help farms if they want to bring us their product and they want to include it in their CSAs. And at the end of the year, we have a case of sweet corn that's frozen off the cob and ready to go… The goal for that is 2025-26…
Phase three is the commercial community kitchen. We're going to have an area that we're going to need to use for ourselves for some of our flash freezing and blanching and those kinds of activities, right? So it just makes sense to bring on a community kitchen later down the line, so that farms and other entities, chefs, can come in and do some value-added to their products to be able to make the biggest bang for their buck. And it will allow FarmFED to expand its product lines as well… The best part about our building that we're looking at now, it has a hood and a fire suppression system already there, and that was one of the biggest costs.
If you think that you want to begin this journey of a co-op or a food hub or grocery store in your community, community engagement is really important… Collaboration is something that wasn't in the original business plan, but as we moved into things and discovered how much farmers need support, we started reaching out to places like Illinois Stewardship Alliance and The Land Connection and different colleges, and working with them closely to make sure that our farmers did have access to those resources to be able to scale up and get to that production level that they want to get to.