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Shelton Farms: Finding a Space in the Middle of AgricultureBy Ginger Kowal
When William Shelton was still in college, he would plant a few rows of corn on his father’s land to sell to the local supermarkets. On summer mornings he would harvest a few hundred dozen ears of the sweet corn before dawn. He would drive the corn himself to the local Ingles market, itself part of a regionally-based grocery chain. He would receive a check for the corn on the spot, and by that A few years later, after William had returned to his family farm to farm full-time, he found he could still sell nearly everything he grew to a local Ingles store. “I could walk into an individual store and deal directly with that store’s produce manager,” William remembers. “On top of that, I was distributing my products myself to public schools in three counties. I can’t imagine doing all of that at the size I’m at now.” Two years after he took over the Shelton Farms operation, William built two greenhouses to devote to bibb lettuce, a specialty lettuce that requires careful care in raising and handling and that brings a premium price. Within two years, William built two more, and then four more greenhouse bays. With that much of an increase in his production, and because his product was a specialty, William found that the small, decentralized markets that he had been relying on to take his product were no longer enough. What’s more, he had too much produce to distribute it himself. “I outgrew myself,” William says. “It took a few years to catch up to the size that I had established.” The predicament that William found himself in, where his production was too large to be met solely by demand in local markets, but too small to compete with national commodity producers, is a common one faced by many mid-sized farms. While smaller farms can find niche markets selling directly to consumers or making their own deliveries to a few local market outlets, it’s not feasible for a farm the size of William Shelton’s to deal in direct markets or to make deliveries to local retail sites independently. At the same time, Shelton Farms is not at the industrial scale that is required to compete at commodity prices. “With so much volume, I underpriced myself at first trying to just break into the market,” William explains. “It took a while to find a balance between supply and demand.” In this respect, Shelton Farms struggles with the same issues of scale as mid-sized farms all over the country. These farms fit awkwardly between the two marketing strategies that are available to growers today: large-scale commodity markets, where mass quantities of single crops are required and prices are low; and direct markets, where small quantities of differentiated products can be sold at a premium price, but distribution is costly. A prevailing “widening of the gap” in national agriculture over the last few decades has brought increasing consolidation of huge megafarms alongside expanding opportunities for small farms adapted to direct markets. Nationwide, the percentage of farms with gross sales of less than $2,500 and that of those with gross sales in excess of $500,000 both showed increases between 1997 and 2002, while the percentage of farms with sales between $2,500 and $500,000 dramatically decreased in the same time period. These farms, and their plight in the face of incompatible infrastructure and marketing support, are the subject of a national initiative that calls them the “Agriculture of the Middle”. The farms that constitute the Agriculture of the Middle in the US represent more than 80% of the nation’s farmland. In western North Carolina, where farms have historically occupied small tracts of the mountain land, even the region’s largest farms fall between the $2,500 and $500,000 sales marks. When any of these mid-sized farms are lost, a significant portion of the region’s capacity for food production and a substantial amount of its land in farming are also lost. Their infrastructure and marketing needs present a unique challenge to local networks.
Finding a balance between supply and demand has also meant finding a balance between distributing his product himself, and simply handing it over to produce brokers and distributors to do that work for him. Either way, some profitability is compromised. On one hand, it is prohibitively expensive in time and transportation to market that volume of lettuce directly to consumers at the number of outlets that would be required. On the other, any broker or distributor that William hires to take care of that job will take a percentage of the price of the produce, and sometimes quite a substantial one. Today, William employs a complex and dynamic combination of those two methods to get his premium lettuce from the farm to the customer. Shelton Farms bibb lettuce is sold at Ingles, Publix, Food Lion, Kroger, and Earth Fare stores all over the Southeast. To get there, the lettuce usually makes at least one stop along the way from the farm to the store. William contracts with a regionally-based distributor, Mountain Food Products, and with another fairly large-scale farm in western North Carolina to move the lettuce to larger distributors based in Atlanta or to deliver directly to the supermarket warehouses. To get to Publix stores, for example, William delivers the lettuce to Mountain Food Products’ base in Asheville. Mountain Food Products then hauls it to the Atlanta Farmers’ Market, where it is picked up by another distributor and trucked to the stores. William has also worked out deliveries via backhauling, a practice where an empty truck that has made its delivery to an Ingles store, for example, can pick up produce at the store to take back to the Ingles warehouse for distribution. It is a clever system, since the truck is making the return trip to the warehouse anyway, but it requires considerable negotiation and planning. Currently, William’s lettuce is backhauled from the local Ingles store in Bryson City to the Ingles warehouse in Black Mountain, where it is then distributed to Ingles stores all over the Southeast. “I can’t go in and sell directly to the produce manager of an individual Ingles store anymore,” says William, “but I still have a very good relationship with them. Because I’ve provided Ingles with a consistent, high-quality product for years, I’ve earned their trust. I sell to the Ingles warehouse year-round, and they take pretty much whatever I have available. In season I send them yellow crookneck squash, half runners and peppers along with my lettuce.” William has also been working with Mountain Food Products for years and has established a solid relationship with that company. Even with the larger quantities that Shelton Farms deals in, for William produce marketing is still founded on good relationships. William has also found that packaging is very important in dealing with large-volume buyers. He has adapted his packaging standards and presentation of the product to the requirements of each grocery store, such as choosing to leave the roots on the lettuce or take them off, to provide adult lettuce or baby, or to use different labels. “When I approach a buyer,” says William, “I have to go in with an attitude of, ‘How do you need the product?’, and ‘Would this better for you?’, and ‘What do you need?’.” Another important ingredient in the balance that William has worked out for his mid-sized farm is the fact that he supplies a specialty product. “Having a differentiated product is part of what has helped me to secure Ingles as a customer,” William explains. And William relies on this same higher-value advantage in marketing his tomato crop, which represents a share of the farm sales nearly equal to the lettuce. Shelton Farms tomatoes go almost exclusively to a distributor in New York City with a highly developed brand name, Lucky’s Real Tomatoes®. The Lucky’s brand is built on the superior flavor of vine-ripened tomatoes and has become popular with corporate chefs all over the country. After traveling from western North Carolina to New York City, William’s tomatoes are then shipped to upscale restaurants as far away as Las Vegas and as close by as Charlotte. “It’s all about name recognition and selling the flavor,” says William. “These chefs have just got to have a Lucky’s tomato. And it’s a good relationship for me because I get a premium price.” And although he acknowledges the irony and lack of efficiency in a system that sends fresh, “real” tomatoes so far afield only to return them back to the state where they were grown, William says with a laugh, “That’s the produce business.” Specialty markets such as that for Lucky’s Real Tomatoes are one suggested solution to the needs of the nation’s mid-sized farms. The products that fit this niche must be high-quality and differentiated, and they can bring a higher price for these qualities. At the same time, some of these products are needed in higher quantity than can be supplied by direct-market growers. It is this combination of attributes that makes the growing market for these unique products promising to farms of intermediate scale. William has recently been sworn in as a county commissioner of Jackson County. He is strongly committed to his home region and to its economic and environmental sustainability. But, in order to be a full-time farmer, he has had to make compromises. His position at the middle scale of agriculture, poised The local food movement in western North Carolina, which has been focused primarily on small-scale farmers and direct markets, is encouraging to William. “I enjoy the recognition I get as a farmer,” he says. “People say, ‘Wow, you’re really doing it out here!’, and I appreciate the excitement and the awareness that people have about local farms. But a lot of people still don’t really know what it takes to grow food and make a living at it.” As far as William’s sales, the excitement over local food probably hasn’t had very much impact on his business. As he says, “The people that come out here looking to buy a few tomatoes can’t support my farm alone.” For a farm like Shelton Farms, it takes support from a much larger system to be successful. Finding a way to secure that support in a way that is economically and environmentally sustainable is the challenge that faces William and the other farms in the Agriculture of the Middle. Find Shelton Farms in the Local Food Guide!
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afternoon he would get a call asking if he had any more fresh corn to sell. The arrangement was simple; the corn was fresh; and the price was fair.
With eight greenhouses in full hydroponic lettuce production, Shelton Farms produces roughly 10,000 to 12,000 heads of bibb lettuce per week. “My dilemma,” William says, “is that to make any money I have to deal in some kind of volume. But in order to move that product in local markets, I would have to work to death to distribute it all.” With the smaller farm William used to be able to supply public schools with lettuce directly. Although he would love to be able to do it again, William explains, “Now there is not enough of a market for that lettuce in Jackson, Swain and Macon Counties combined.” 
between the high returns of specialty markets and the large volumes of commodity markets, has forced him to find his own balance in the center. As William puts it, “I probably could find someone to distribute all of my produce and just take care of it all, but then I would end up giving away some of the profitability by not marketing it myself. And I might get a higher return if I dealt directly with local markets, but after adding in transportation costs it would be just about even. I have to just do as much as I can.”