Guided by the invisible and powerful hand of the free market, a new crop of entrepreneurial farmers in Michigan and other states is tailoring production to meet changing consumer demands. The result not only is more profitable farm families but also safer food and farmland free of pavement and pollution.

Such successes depend on switching from conventional farm and marketing practices and breaking into new consumer markets, say economists. The number of money-making farms also could increase if local and state economic development agencies expanded their work to include farmers, according to the New Entrepreneurial Agriculture, a special report on the promising trend by the Michigan Land Use Institute.

"Agriculture could be a very strong area of growth with more focus on it as a business," says Jonathan Scott, economic development director for Mecosta County, who worked with entrepreneurial farmers in North Dakota before moving to Michigan. "It's an entirely new perspective versus raising crops. It's about selling products, labeling, processing, packaging. That's what economic developers need to work on; they need to facilitate that."

Examples of entrepreneurial agriculture and more information can be found in the Michigan Land Use Institute's New Entrepreneurial Agriculture report at www.mlui.org or contact Patty Cantrell at (231) 882-4723 or patty@mlui.org.

Michigan's advantage

Michigan has a unique competitive advantage in the new entrepreneurial agriculture. The state is second only to California in its broad range of agricultural products-from pears to perennial plants. The state's farmers also sit within 500 miles of half of the populations of both Canada and the United States.

Even more overlooked are the ready markets right at home. Michigan consumers spent $25.7 billion on groceries and eating out in 2001. Only about 10% of that food comes directly from Michigan farmers, according to researchers. Capturing just a tiny fraction more of Michigan's total food dollars can amount to a lot of money for independent farmers in Michigan who want to stay on their land.

Economic developers can help farms with market research and business development assistance, says Scott and other development specialists. According to the Institute's special report, farm families in communities as diverse as Kalkaska, St. Johns, suburban Grand Rapids and Goetzville in the Upper Peninsula are earning more money through direct sales, processing and value marketing.

George and Sally Shetler's two oldest sons, for instance, returned from city jobs to help build the family's "From Moo to You" milk-bottling business in Kalkaska. The dairy now supports multiple family members in its business of delivering all-natural, non-homogenized milk in glass bottles to independent grocery stores in the area (p. 13).

With no subsidies and no middle men, farmers' markets have increased by 79% since 1994, to 3,137 markets in all 50 states, and the number of farmers who sell at them has more than tripled to 67,000, the Agriculture Department reports. About three million Americans a week now get their fresh food directly from the farmers who grew it.

New economic agenda

"The national trend is that agriculture is going in two different directions," said Dan Wyant, director of the Michigan Department of Agriculture.

One is toward larger operations that mass-produce commodities under contract with larger companies. The other direction is toward niche and specialty food markets; toward farmers adding value to their crops with their own processing ventures; and toward locally-grown and locally-sold agricultural products.

"Michigan is uniquely situated to take advantage of niche, value-added and local market opportunities," said Wyant, whose agency oversees the state's second-largest industry. "We have a lot of diversity in the things we produce, and we have a lot of agricultural production where we have a lot of people, unlike some big rural states that don't have a large population base."

Some communities in Michigan recognize the opportunity and put essential business assistance behind their valuable farmers.

In Grand Rapids, the grassroots Ridge Economic Agricultural Partners group has developed an agritourism guide for the "ridge," a rich fruit-growing area northwest of Grand Rapids. The group also has put area farmers through a business training course with the Michigan Small Business Development Center.

At the tip of Michigan's mitt, Northern Lakes Economic Alliance Director Tom Johnson says putting agriculture back into economic development is a matter of first realizing the opportunity exists and then making it happen. "When you see consumer demand unfulfilled, you go get it. That's what business is all about," he says.

Movers and shakers

Like hometown banks or specialty retail stores, farms can succeed despite mega mergers all around them. They can do it by adding value to their products with a friendly face or specialty processing, by finding profitable market niches-anyone for goat's milk yogurt?-and by finding new ways to consumers, such as selling shares in the next season's harvest.

Newlyweds Terri and Rick Hawbaker and Dawn and Eric Campbell, for example, are two young dairy families in the St. Johns area who now are investing in farmland because they've found a way to make more profit per cow. They're doing it with a low-cost grassland grazing system that also has set up the families to earn 50% more for their milk as certified organic milk producers.

In the eastern Upper Peninsula, Rus and Amy Goetz were able to make a profit in their first year of raising poultry on pasture in movable, outdoor pens for local customers who want chicken free of synthetic hormones.

Rather than take what global markets will pay for raw "commodities"-tankers of milk, bulk grain or mass-produced meat-Michigan farmers are capitalizing on new marketing opportunities to keep their families and their land in agriculture.