Farmers choose to foray into value-added production for many reasons—waste reduction, product diversification, season extension, or just a plain old passion for pickles. Whatever the motivation, this type of processing opens up a whole new can of worms, and farmers must consider all kinds of additional factors from FDA and CNG compliance to label design and recipes. Producing value-added goods is not for everyone, but we’ll try to guide you through the ins and outs so the barriers to entry feel less intimidating.
Value-added producers add monetary value to a raw agricultural commodity through some form of processing. So honey is a raw commodity, while lavender-infused honey would be a value-added version. Same goes for peppers vs. salsa, wheat vs. bread, cabbage vs. kraut, milk vs. cheese, etc. The term is extremely broad and some government entities even consider organic production itself to be “value-added.”
For our purposes, we’ll consider value-added goods as those that require the producer to cut, dry, cook, can, culture, smoke, or otherwise process their raw product.
Food Safety
Compliance with FDA, Cottage Food, and other food safety regulations is often the biggest barrier to entry for folks with big value-added dreams. Regulations vary widely state to state, but for most smaller operations, a good place to start is your state’s Cottage Food laws. These laws allow small-scale producers to process low-risk foods in their home kitchens and sell them, with a bare minimum of regulatory oversight. This is why your great aunt can sell her homemade blueberry jelly at the farmers market. Most states’ Cottage Food laws only apply to producers with gross annual value-added product sales under a certain amount. These laws allow only certain types of products, usually non-potentially hazardous foods like jam, jellies, baked goods, and dried herbs. Higher risk foods are those that require specific processing times and temperatures to be considered food safe, like those containing meats, raw dairy products, and many cooked vegetables.
For farmers who are looking to produce larger amounts of products or process higher risk foods, commercial kitchen space will be necessary. Some farms build their own commercial kitchens onsite, while others rent space in community kitchens and restaurants. Local agricultural extension agents can be a great resource for more in-depth info about your state’s Cottage Food laws and what commercial kitchen options are available in your area.
Remember to contact your farm insurance agent and let them know that you’re getting into value-added production. Often additional coverage needs to be added onto standard product liability policies.
Packaging and Marketing
Often the main allure of value-added production is the prospect of extra income, especially during times when other farm production is low. Having shelf-stable products can be a great way to supplement farm stand and CSA options and add diversity to your farmers market and online offerings. With most market channels, packaging your product attractively and inline with regulations is key. Design and print professional, clear, enticing labels on appropriately-sized, affordable packaging. Think about compostable and recyclable packaging options. Depending on this size of your operation, consult your state Cottage Food laws or FDA regulations regarding required label information, including ingredients, farm name, date, etc. Traceability and UPCs could be important labeling considerations as well.
Don’t skimp on good-looking packaging. The product can’t speak for itself until folks try it and it’s very likely that your prices will have to be much higher than grocery store prices.
Samples at market can be an invaluable marketing tool, just make sure you’re following your market’s food safety guidelines.
CNG Labeling
CNG certifies raw agricultural products and minimally processed products like honey and maple. We’ve set the following policies to address questions about labeling from members who create value-added products from their CNG crops.
- The CNG label may only be used on products where the majority of inputs by volume are CNG certified ingredients. Common examples are sauerkraut, pickles, and jams.
- If the majority of ingredients are not CNG, then the CNG logo may not be placed on the packaging, but the member has the option to indicate which of the product’s ingredients is Certified Naturally Grown. For example, a tomato sauce where only the basil is CNG, but not the tomatoes, may not use the logo but the ingredient list may indicate Certified Naturally Grown basil, or use an asterisk to indicate which ingredients are CNG certified.
Some value-added products require major ingredients that aren’t available in CNG certified form, like oils and alcohol, in which case there’s more flexibility with using the CNG label.
- Tinctures: May use the CNG label if the majority of plant ingredients are CNG, and the alcohol is certified organic.
- Salves and Infused Oils: May use the CNG label if the plant ingredients are CNG, and the oils are certified organic. Honey and beeswax should also be from a CNG apiary.
- If a particular plant ingredient is sometimes organic, and sometimes CNG, then the specific situation should be discussed with CNG. If a particular plant ingredient is sometimes CNG and sometimes conventional, then it may not be indicated that the ingredient is sometimes CNG.
The take home point is, as with all things CNG, transparency is the key!
Ask yourself…
Adding processing and product-making to your never-ending farm list is no small matter. Some farmers and educators counsel value-added hopefuls to consider their farm and their processing enterprise as two separate businesses. Just like starting a farm business, consider carefully and start small. Test your recipes and production process on a small-scale first. Talk to other farmers and producers who have tried value-added production. Research, research, research — talk to agricultural extension agents and food safety educators and make sure you know the compliance hoops before you try to jump through them.
Here are some other questions to ask yourself:
- Are there raw products on my farm that are currently wasted?
- Do I like spending time processing?
- What will I have to charge for my product to make a profit? (Make sure you include your TIME)!
- Do I need a shelf-stable product to sell when farm times are lean or during the off-season?
- When will I need to process and do I have enough room in the farm schedule? Will I need to hire additional help?
- Is there a demand for my product? Is anyone locally already selling it? How will you differentiate yourself?
- What is my tolerance for FDA compliance and inspections?
- Will my product be considered “high risk”?
- Will my product need to be made in a commercial kitchen or do Cottage Food laws apply?
- How much money will I need to get my value-added business started? Do I need to source off-farm funding?
- Am I interested in selling my products online? What about shipping costs and logistics?
Is Value-Added Right for Me?
Value-added production can be an awesome option for lots of farms and there are a plethora of reasons to jump right in.
Alternatively, too many enterprises can be the doom of a small farm, so don’t worry if becoming a processor is not for you. Consider meeting your goals in other ways; whether you dial in your production plan to ensure you don’t produce too much or you extend your growing season in order to extend your market season.
Partnerships with other farmers and local processors can be a great way to participate in value-added production without doing your own processing. Whatever you decide, make sure you have the time, interest, and resources to implement it, without adding too much strain on your business, family or yourself!
Resources
Legality
Farmer’s Legal Guide to Value-Added Products, Farm Commons
Add Value Not Legal Liability video, Farm Commons
State By State Review of Cottage Food Laws, Farm-to-Consumer Legal Defense Fund
Business
Beyond Fresh: A Food Processing Guide for Farmers, ATTRA — A useful workbook that guides farmers through value-added enterprise planning. Includes cost calculators and sample spreadsheets.
Adding Value to Farm Products: An Overview, ATTRA — Farm business resources for food and non-food products.
What is Value-Added Agriculture?, AMRS — Scroll down for an extensive list of state and regional research centers devoted to the development of value-added business and processing resources.
Value-Added Producer Grants, USDA Rural Development — The main grant funding source for value-added producers.
Processing & Packaging
National Center for Home Food Preservation, University of Georgia — Food-safe recipes for canning, freezing, fermenting, drying, curing, and pickling.
Uline — A great place to start for your packaging needs.
The Art of Fermentation, Sandor Ellix Katz — Recipes and methodology for kraut, kimchi, yogurt, and more.
The Organic Medicinal Herb Farmer, Jeff Carpenter — For those interested in drying and processing medicinal herbs and flowers.
Local Resources
- Agricultural Extension Agents
- Small Business Development Center Consultants
- FDA and Food Safety Inspectors
Farmer Contacts
We recently held an online farmer meet-up for folks interested in value-added production, hosted by two experienced CNG farmers. These two have graciously offered to field questions regarding their products and processing logistics.
- James Radnich, Cultivate Farms, Oregon — Produces a wide variety of topnotch products including salsa, hot sauce, infused vinegar, and soaps. Contact here
- Michael Torbett, Terra Vita Farm, North Carolina — A tried and true sauerkraut specialist! Contact here
Just Ask!
Have a value-added resource suggestion or a question for CNG? We’d love to hear from you!