Trends in Indiana Specialty Agriculture

July 18, 2008

PAER-2008-10

Maria Marshall, Assistant Professor; Corrine Alexander, Assistant Professor; Jennifer Dennis, Assistant Professor; Roberto Lopez, Assistant Professor and Floriculture Extension Specialist, Department of Horticulture and Landscape Architecture and Kwamena Quagrainie, Aquaculture Marketing Specialist

Agriculture is undergoing a transition in the types of crops produced and the types of people who are farming. According to the Indiana Agricultural Statistic Service, the number of Indiana farms has decreased by 10 percent in the last five years, resulting in a decrease of over 400,000 acres in farmland. Despite this decrease in total farms, small farms (10 to 49 acres) have increased steadily (National Agricultural Statistics). Indiana has 44,990 small farms (defined as operations with less than $50,000 in gross sales), and these small farms account for approximately 75 percent of total farms in Indiana (National Agricultural Statistics Service).

Many of the farms dedicated to specialty agriculture production are small. Specialty crop and animal production in Indiana is very diverse. Specialty crops range from tomatoes and apples to floriculture and organic agronomic crops. Specialty animal production ranges from goats to aquaculture.

Fruit and Vegetable Production

Indiana’s specialty crop production varies from small farms to larger, more commercial farms. Distribution methods range from retail (for fresh market) to wholesale (fresh market and processing). It is well known that Indiana ranks among the top five in the production of tomatoes, watermelons, and cantaloupe; however, Indiana has a rich history of producing specialty crops. Indiana is home to a productive tomato, snap bean, and cucumber processing industry. However, production decreased from 2004 to 2005. Most of the fruit production such as apples, watermelons, and cantaloupe in Indiana is targeted for the fresh market. Indiana’s apple production in 2005 was down 17 percent from 2004. Meanwhile, blueberry and watermelon production both increased 13 percent from 2004 to 2005.

 

Organic Agriculture

Organics is one of the fastest growing food sectors, at 21 percent growth between 2005 and 2006. The fastest growing organic categories between 2005 and 2006 are meat, at 29 percent; dairy at 25 percent; fruits and vegetables at 24 percent; and bread and grains, at 23 percent. Because of the substantial growth in consumer demand for organics, there are opportunities for Indiana farmers.

As of 2005, Indiana had 43 certified organic operations and 5,156 acres of certified organic cropland and pasture (ERS, 2005). In addition, Indiana had 180,300 certified organic layer hens, 167 beef cows, 237 milk cows, 70 other cows, and 2,000 hogs. Organic production has been increasing in Indiana since 2005 and is expected to continue to increase. There is substantial room for growth in organic field crop acreage and organic livestock in Indiana and in and the Corn Belt overall. In 2005, the Corn Belt had less than half of the US supply of organic livestock but roughly 80 percent of the US supply of organic corn and soybean acreage. The Corn Belt has a clear advantage in producing organic livestock and poultry relative to the rest of the US because of its substantial feed base. Going forward, the biggest challenge in the region will be to match the growth in production of organic feed to the growth in production of organic livestock.

Floriculture Production

Indiana ranks twenty-third among states in floriculture production, with more than 260 commercial greenhouse growers, with a wholesale value conservatively estimated at $60 million. (USDA, 2006). In 2005, the wholesale value of herbaceous perennials, bedding, propagative, potted, and foliage plants grown in Indiana was $9.0, 31.2, 3.1, 5.8 and 1.3 million, respectively. The future of commercial greenhouse operations in Indiana is dependent on immigration reform and energy costs. Today, energy accounts for 50 to 85 percent of the total operating costs of greenhouses. The cost to heat and light a greenhouse has increased in the past decade because the cost of fuel (e.g., natural gas and heating oil) has nearly doubled. One reason for Indiana’s lack of prominence in the floriculture industry compared to surrounding states is that its growers have not had access to production and marketing information to grow new, alternative, more profitable specialty crops to replace ones that have become marginally profi table.

The Green Industry

The Indiana Green industry is an important part of the state’s agricultural sector. The “Green Industry” consists of wholesale, nursery, and sod growers; landscape architects; designers and builders; contractors and maintenance firms; retail garden centers; home centers and

mass merchandisers with lawn and garden departments; and marketing intermediaries such as brokers and horticultural distribution centers, known as “re-wholesalers”. According to the National Green Industry Survey, the output impact of the Indiana green industry was $3.01 billion for all sectors combined, based on 2002 data that is expressed in 2004 dollars. The horticultural service sector accounts for $1.44 billion of Indiana’s Green Industry, and the trade sector accounts for the other $1.34 billion in sales. The landscaping services sector is the leader in value-added impact for Indiana, with an impact of $746 million, followed by the lawn and garden sector, at $412 million and then by the nursery & greenhouse sector, at $156 million. Indiana’s green industry ranks 7th amongst Midwestern states for economic impact and 5th for employment impact.

Aquaculture Industry

The aquaculture industry in the state is growing, with an estimated total product value of $3.1 million, though it accounts for only 0.3% of the $1.1 billion US aquaculture industry (USDA-NASS, 2003, 2006). The 2005 Census of Aquaculture indicated 18 Indiana aquaculture farms. Indiana’s aquaculture industry represents the diversity present in today’s aquaculture economy.

Fish are grown for human consumption, recreational fishing, and ornamental display. Martinsville, Indiana is home to one of the largest ornamental fish (goldfish) farms in the US. A number of food fish production facilities, mainly largemouth bass, hybrid striped bass, yellow perch, and tilapia, as well as crustaceans (e.g., freshwater prawn), have been established in the state in recent years, increasing the production capacity of Indiana’s aquaculture industry. In 2007, Bell Aquaculture began operation in Albany, Indiana as the largest yellow perch operation in the US.

Implications

Even though producers have been successful at marketing their products, there is room to help them improve production systems and business management strategies, especially marketing. Marketing and financial risks are two of the biggest concerns for small-scale producers. Although some producers sell directly, identifying markets and understanding pricing and costs of production relative to calculating a break-even point can be challenging. Producers often do not have the knowledge and skills to identify new opportunities provided by export markets and new production practices and threats from new competitors or government regulation. It is imperative that producers learn how to effectively manage opportunities and threats to increase their profitability. Research and educational programs that address the problems faced by the specialty agriculture industries in Indiana are limited. Specialty agriculture producers would benefit from applied research and Extension programming in sustainable production practices and market development.

 

References

Economic Research Service (ERS), United States Department of Agriculture. 2005.

“Data Sets.” http://www.ers.usda.gov/Data/organic/index.htm#tables.

Energy Information Administration (EIA). 2000. Historical natural gas annual 1930 through

  1. Washington, D.C. p. 331. Energy Information Administration (EIA). 2008. Natural gas monthly February 2008. Washington, D.C. p. 55.

Organic Trade Association (OTA). 2008. “2007 OTA Manufacturer Survey Overview.”

http://www.ota.com/pics/documents/2007ExecutiveSummary.pdf.

United States Dept. of Agriculture (USDA). 2006a. Floriculture crops 2005 summary.

USDA-NASS. 2003. “2002 Census of Agriculture – Ranking of 2002 Market Value of

Agricultural Products Sold.” Available at: http://www.nass.usda.gov/census/census02/topcommodities/topcom_IN.htm.

USDA-NASS. 2006. “2005 Census of Aquaculture.” Available at:

http://www.nass.usda.gov/Census_of_Agriculture/2002/Aquaculture/index.asp.

USDA-NASS.2006. Available at:

http://usda.mannlib.cornell.edu/usda/current/FlorCrop/FlorCrop-04-26-2006.pdf.

USDA-NASS. 2006. Indiana Agricultural Report. Available at:

http://www.nass.usda.gov/Statistics_by_State/Indiana/Publications/Ag_Report/2006/agr060220.pdf.

US Department of Commerce, National Marine Fisheries Service, USDOC-NMFS. 2007.

“Fisheries of the United States – 2006.” Available at: http://www.st.nmfs.noaa.gov/st1/fus/fus06/index.html.

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