KY Produce Auctions Expand Roles

by Dr. Tim Woods, Department of Agriculture Economics

     Most Kentucky produce operations tend to be fairly small and/or part time as they emphasize direct markets.  However, the number of producers involved in these direct markets continues to climb.  Further, the absolute number of producers involved in fruit and vegetable production has continued to increase as well.

     Much of this growth can be tied to the presence of the produce auctions.  The Fairview Produce Auction, launched out of a tiny shed in 1996, involved a handful of Christian County growers and grossed less than $200,000.  The Fairview Auction has grown considerably and new auctions have come on-line with varying degrees of success. The auctions collectively have grown in sales volume and in vendor numbers.  The last record indicated over 750 vendors selling at one of the now five produce actions in Kentucky.

     These markets will typically bring close to wholesale prices, but they provide an option for growers with either a little excess volume, a new produce item being developed on a smaller scale, or where limited direct marketing demand exists.

     New auctions and clusters of horticultural producers are developing quickly in KY.  New auctions just opened in Hart County and Henry County (Capstone Produce) and these will be potentially joined by a new auction in Cincinnati (Findlay Auction).   Some have expressed concern about overcrowding of these markets.

     In reality, Kentucky is a very small volume produce supplier within the region, only 20-30% of the acreage of each of our neighboring states.  There would appear to be plenty of growth opportunity.  But some markets may feel some competition as buyers get accustomed to the auctions as a steady source of supply.  (Tim Woods)

Kentucky Produce Marketing Channels: Farms Selling More than 10%

into One Channel  (2003 and 2009)

Markets	2003	2009
Farmers’ markets	52%	51.9%
On-farm markets	50%	41.1%
Cooperatives	15%	1.8%
Non co-op wholesale	17%	14.7%
Internet		2.1%
Direct to grocery	21%	14.7%
Direct to restaurant	12%	8.2%
Auction	9%	18.5%
CSA	3%	3.5%