Valuable Lessons Learned in USDA VAPG Alabama Dehydration Plant Project
From root vegetables to flours.
Photo by Michelle Consuegra of BSVI
FOLEY, AL – A characteristic of the USDA’s Value Added Producer Grant (VAPG) program since its inception more than 20 years ago is that it opens doors to new ideas. It can become entrepreneurial in nature, regardless of size of the farm business, geographic location or crop involved.
In 2016, Bon Secour Valley Ingredients (BSVI), Foley, Alabama, sought and was awarded a $250,000 grant to help launch a facility to dehydrate unused (often below-grade) field crops and create powders/flours that could increase nutritional value in many foods.
VAPG requires an equal investment from the farm business that is initiating the venture, and often projects extend over a three-year timeframe.
George Woerner, CEO of BSVI, said the VAPG allowed the company to start down the right path – but also helped owners and investors learn enough to realize adjustments were necessary to make the plant successful.
“We found we were focusing entirely on the farm level (primarily root crops) and adding value by increasing crop use.” Woerner and his family have produced sweet and red potatoes as primary crops for 20 years. He said he and other investors had done due diligence and purchased equipment based on knowledge provided by equipment firms, which didn’t always take into account use with root crops and other equipment. Different plant and equipment engineering expertise will be required for the dehydration project to fly.
Yet Woerner is adamant when relating facts about lost food value that could be captured. Between 50 and 55 percent of root crops never make it to consumer markets because of regulations regarding mis-shape, minor blemishes or under-size. Some crops aren’t even harvested, and at other times, they are dumped, he said. He used sweet potatoes as a prime example.
“About 100 million pounds are never even brought to the shed, which is a cost to growers” to handle, he said. The dehydration plant is part of a national solution to food waste at the farm level, he noted.
Food waste per year in the USA is about $160 billion. Bon Secour methodology was to peel, slice, dehydrate and turn that wasted product into sweet potato flour to be used for breads, cakes, biscuits and pancakes, among other goods to increase nutritional value.
It’s a novel idea for his region, but is successfully used in plants in a few western states and one in North Carolina, he added. Other regional Alabama crops would be processed, including chicory and carrots. Woerner said he spent five years planting multiple crops to test suitability. In Europe, chicory root is used to add value to cattle feed. Chicory also is used as a non-caffeinated drink, similar to coffee.
Now, Woerner said, “Valuable lessons have given rise to a different path forward.” The entrepreneurial venture has a solid future, he explained, and will look at gathering investors to joint-venture a pilot plant in a region where major excess raw supplies exist, arrange a year-round supply network of growers and enter into supply agreements with food companies that would offer distribution performance guarantees. There was early high interest among large companies that wanted to purchase product for health-food lines and by those serving low income and elderly populations and Middle Eastern markets, Woerner said.
About USDA VAPG
VAPG funding has been offered by the USDA periodically since the early 2000s. A new round of funding is anticipated to be announced in coming months. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agriculture producer groups and producer-owned business ventures, including non-profit organizations may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies).
Ag Marketing Resource Center (AgMRC) Assistance
Producers and ranchers, cooperatives and other agricultural businesses can find a wide-ranging set of tools and information to help them in pursuing VAPG funding at the Agricultural Marketing Resource Center (AgMRC). On a variety of value added topics and across products, AgMRC is a rich resource for agricultural businesses, from startup to advanced growth stages.
Directories for state and federal resources, specialty crop information, legal guidance, assessment and spreadsheet tools and other types of business training are available.