Nonprofit Delivers Local Produce to Schools, Restaurants Around Charlottesville

"It's not a waste of my time. But the six weeks I spent chasing Whole Foods is six weeks I could have been selling them tomatoes," Weary said. "So the Food Hub does two things: They consolidate my deliveries, which makes my life easier, and they consolidate the time it takes to build relationships with those bigger buyers."

Institutional customers have embraced the Hub. After six weeks in business, the Hub had signed up 30 customers, including independent grocery stores, restaurants and several Charlottesville area elementary schools. Collier is in negotiations to sell to the University of Virginia dining services, run by food service behemoth Aramark. U-Va. is responding to students' desire for local food, said Bryan Kelly, the university's executive chef. Kelly sees the Hub as a liaison that can balance the needs of farmers and institutions.

Again, that's not easy. The Hub has established a small distribution system. But it can't compete on price. National distributors and food service providers scan daily commodity market prices. In high season, zucchini sells for about 40 cents a pound. The Local Food Hub sells zucchini for what it considers a fair price: 94 cents a pound.

Buying local produce also increases labor costs. That 40-cents-a-pound zucchini can come washed, chopped and bagged, while local squash must be prepped by the buyer. "It's a huge change for institutions," said Judy Berger, JABA's community nutrition manager. "When you fix thousands of meals, you want the quickest, easiest way to do it. Food from California that's prepped and ready to go is, for crazy reasons, less expensive."

Some institutions are willing to stomach the changes. JABA, for example, preps local produce from the Hub and other farmers for all of its centers in its catering kitchen. And it directs proceeds from catering to cover higher produce prices. But Cavalier Produce, a regional distributor, is not buying as much as the Hub had hoped. Cavalier does sell the Hub's specialty items, such as squash blossoms and purple potatoes, to chefs. But at the height of tomato season, Cavalier can purchase tomatoes from other Virginia farmers a little farther afield for less than half of what the Hub would charge.

"We're trying to make it work, but we have to stay at the market price," said Spencer Morris, Cavalier's general manager. "If I went out to my customers at double the price, I'd lose business."

Local distributors do have one competitive advantage: Unlike national companies, the Hub knows the source of every tomato, potato or apple it delivers -- a plus in an era where E. coli outbreaks make regular headlines. But, says Josh Edge, farm-to-institution manager at the seven-year-old Growers Collaborative in California, it is difficult to turn a profit. "The distribution business is about economies of scale," he said. "We can't compete with the national guys." The Collaborative was originally set up as a nonprofit organization; in 2006, it tried to operate as a for-profit corporation. Last year, it returned to charity status.

The Obama administration has plans to help. The Department of Agriculture is required to put at least 5 percent of its business and industry budget into developing local production. "That's the floor," Vilsack said. "What we're looking at is how can we more effectively use [those funds] to create a whole new way of thinking about the rural economy. Be assured it's one of our priorities."

Collier projects that the Hub could turn a profit with revenue of $1.5 million annually. If all goes well, that could happen in six to eight years. In the meantime, small farmers are taking advantage of the opportunity to find broad and steady markets for their products.

"It's nice to know you don't need to have 200 acres," Down Branch Farm's Proutt said. "You can still make it work."