A Case Study of Vegetable Growers in Colorado

Small agricultural producers around the country are finding it increasingly difficult to remain competitive in a market place dominated by the consolidation of agricultural production. According to the latest USDA census, only 3.6 percent of farms accounted for over half of all U.S. farm sales (USDA, NASS, 2000). This consolidation has had a serious impact on vegetable growers in northeastern Colorado who have recently banded together to form a cooperative in the hopes that they would be in a better position to market their vegetables. These producers have been marketing their commodities using forward contracts (when possible) with various brokers/dealers throughout the supply chain because they have not been very successful in breaking into the super market stores—a difficult if not impossible task for small scale producers. This challenge for producers to market directly to supermarkets and to their consumers is becoming greater as we consider the number of recent consolidations that have occurred in retail grocery markets throughout the country. Currently the top 20 grocery retailers consist exclusively of retail chains. In 1999, the four largest food retailers ’ share of grocery store sales was 27%, up from 18 % in 1987 (USDA, ER