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Staple Food Commodities

Staple food commodities are defined as those essential agricultural products required to sustain the island’s population. The primary purpose of focusing on this grouping of agricultural products is to enable HIAP's members to better analyze and understand Hawaiʻi Island's food value chains, the market ecosystem that enables these value chains to function efficiently, and the economic capacity to improve the island's food security. By strategically removing systemic constraints, this analysis aims to promote more inclusive, market-driven growth.

Staple Food Commodities are categorized in ways that make it as easy as possible to track reported agricultural and economic data, dividing various agricultural products into three primary groups: Fruits, Vegetables & Melons, and Livestock & Dairy. The list of agricultural products included in each group is shown in the table below. It is important to note that some products in the vegetables category are technically fruits but are included with vegetables due to common usage or processing needs. 

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The information on this webpage seeks to explain the market ecosystem for staple food commodities on Hawaiʻi Island. It provides available data to understand the scope, scale, and economic performance of the commodities, identify the roadblocks or systemic constraints that are hindering profitability and growth in the agriculture and food cluster, and include feedback from stakeholders within the system.

Market Ecosystem Map

The system map below outlines the key functions, rules and stakeholders of the island's staple food commodities market ecosystem and identifies key systemic constraints. Clicking on any of the links below will take you to the relevant information associated with that element of the system.

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Staple Food Commodities Value Chain

Value chain analysis encompasses all the activities and stakeholders involved in bringing a product from the initial stages of production to the final consumer. This includes every step from cultivation and harvesting to processing, distribution, marketing, and sales. By analyzing the value chain for the island's staple food commodities, we can focus on systemic constraints and identify strategic opportunities for producers.

Value Chain Analysis

Understanding the value chains of the island's agricultural products from production to consumption helps to identify the factors that determine the prices producers get for their products and where different market opportunities might exist, particularly for more value-add to products that can increase farm profitability. Analyzing vertical linkages amongst value chain functions and horizontal linkages amongst producers can yield potential new opportunities. The following diagram displays each of the value chain functions and segments the farms on the island by income category, displaying the total sales the farms in each income category contributes towards the total value of products sold in 2022. Note that the 90 highest earning farms (2.5% of the total) generate 71% of the total value sold in 2022.

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Horizontal Linkages

Horizontal linkages among producers of similar products are crucial for achieving economies of scale, sharing resources, and collective marketing. The data from various sources highlights several key horizontal linkages on Hawaii Island:

  • Hawai’i ’Ulu Cooperative: This cooperative is a prime example of horizontal linkage, enabling breadfruit farmers to pool their resources for processing and marketing. The cooperative's shared processing facilities reduce individual costs and increase collective bargaining power, allowing members to access larger markets and achieve better prices for their products.

  • Hawai'i Papaya Industry Association: This organization supports papaya farmers by promoting their products in both domestic and international markets. Collective marketing efforts help increase brand recognition and market reach, benefiting all members by sharing the costs of marketing campaigns and facilitating access to export markets like Japan.

  • Farmers’ Markets and CSA Programs: Local farmers' markets and community-supported agriculture (CSA) programs provide platforms for producers to sell their products directly to consumers. These markets foster collaboration among farmers, enabling them to share best practices and coordinate on marketing strategies. CSA programs, where consumers subscribe to receive regular boxes of fresh produce, also strengthen horizontal linkages by creating a steady demand for a variety of products from multiple farmers.

 

Vertical Linkages

Vertical linkages involve the connections between different functions in the value chain, from production to processing, distribution, marketing, and sales. Effective vertical linkages ensure smooth transitions of products through the value chain, enhancing overall efficiency and profitability.

The relationship between producers and processors is critical for timely and efficient processing of agricultural products. The data indicates that many small-scale farmers lack access to adequate processing facilities, creating a bottleneck in the value chain. Initiatives to develop localized processing infrastructure, such as The Food Basket's Agriculture Innovation Center, aim to address this gap by providing shared facilities for value-added production. This will enable farmers to process their products locally, adding value and reducing the need for costly off-island processing.

Efficient distribution networks are essential for connecting producers with markets. The data highlights several key challenges and opportunities in this area.

 

  • Developing refrigerated consolidation points in key agricultural areas can help streamline logistics and reduce post-harvest losses. These facilities can serve as hubs where farmers can bring their produce for cooling and storage before it is transported to markets or processing facilities.

  • Improved cold chain logistics are vital for maintaining the quality of perishable products during transport. The data suggests that investments in cold storage facilities and refrigerated transportation options can significantly extend the shelf life of fruits and vegetables, making it easier for farmers to access distant markets while maintaining product quality.

  • Effective market intelligence and demand forecasting are crucial for aligning production with market demand. The data highlights the need for better information flow along the value chain.

  • Understanding consumer preferences and market trends can help producers make informed decisions about what to grow and when to harvest. Improved market research and data analysis can reduce the misalignment between supply and demand, minimizing waste and increasing profitability.

  • Establishing feedback mechanisms between producers, processors, and retailers can enhance coordination and improve responsiveness to market changes. For example, regular communication and data sharing can help adjust production schedules and processing volumes to meet current demand levels more accurately.

  • Building strong relationships with retailers and exporters is critical for ensuring that local products reach both domestic and international markets. The data indicates several successful examples and opportunities for improvement:

  • Hawaiʻi Seals of Quality Program helps distinguish locally produced agricultural products by certifying and promoting them to consumers. Collaboration with retailers to display and market these products can enhance their visibility and appeal, driving demand and supporting local farmers.

  • Export Market Development targeting high-value niche markets and exploring more efficient packaging and transportation methods can help Hawaiʻi Island products compete in global markets. The data suggests that focusing on quality and leveraging the unique attributes of local products can create competitive advantages in international markets

 

Root Causes of Problems
  • The data highlights significant logistical challenges due to Hawaiʻi Island's geographic isolation and diverse topography. The distance between farms, processing facilities, and markets increases transaction costs and complicates logistics. This is particularly evident in the distribution of fruits and vegetables, where remote farm locations hinder efficient transportation and timely delivery of produce to markets.

  • Stakeholders consistently identify the high costs associated with compliance, permitting, and infrastructure development as major barriers. For example, the complex permitting process for building agricultural structures and obtaining water and wastewater permits adds financial and administrative burdens on farmers. This is compounded by high transportation costs for both local and export markets.

  • There is a clear misalignment between production and market demand, leading to supply constraints and inefficiencies. Seasonal variations in fruit and vegetable production result in periods of oversupply followed by shortages, complicating efforts to maintain consistent supply to consumers. This misalignment is exacerbated by inadequate demand forecasting and market intelligence.

 

Needs and Opportunities
  • Investing in improved infrastructure, such as refrigerated consolidation points and better cold storage facilities, could significantly reduce post-harvest losses and extend the shelf life of perishable products. Developing a robust island-wide transportation network specifically designed for agricultural products can also streamline logistics and reduce costs.

  • Simplifying the permitting process and providing financial incentives for compliance with environmental and health regulations could alleviate some of the financial burdens on farmers. Adopting more flexible water and wastewater regulations tailored to agricultural needs can further support farm operations.

  • Improving market intelligence and demand forecasting can help align production with market demand. This involves collecting and analyzing data on consumer preferences, market trends, and price averages to inform production decisions. Better market alignment can reduce waste, increase profitability, and stabilize supply.

  • Establishing shared processing facilities equipped with advanced technologies can enable small-scale farmers to engage in value-added production without incurring prohibitive costs. These facilities can support the development of new product lines, such as dried fruit powders or specialty dairy products, which can open up new market opportunities and increase farm profitability.

Production

Production information is divided between the three primary staple foods commodity groups: Fruits, Vegetables & Melons, and Livestock & Dairy. Click on the links below to view data for each of the three groups.

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Fruits

The following table shows the numbers of producers for each fruit crop on Hawai'i Island for the past ten years. Entries showing a zero (0) instead of a blank entry indicate there were too few data points to be able to reveal the data without revealing information about individual operations. 

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County Data

Statewide data from HDOA’s Market Analysis and News Branch provides more details of production and yields than can be found in most County-specific data. The Statewide data shows the significant difference in yields between Avocado production in Hawaiʻi compared to other states, being only 16% of the national average in 2022.

Avocado Production comparison and yields

Source: Hawaiʻi Dept of Agriculture, Market Analysis and News Branch

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Statewide Data

The following table shows how Avocado production and yields in the state have declined over the past five years.

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Statewide Data

A concerning trend is the declining acreage of crops like avocados and bananas, highlighting the urgent need for interventions to address issues such as disease management, market access, and labor availability. These declines suggest underlying problems that, if left unaddressed, could significantly impact the island's fruit production capacity. On the other hand, there are promising signs of growth and diversification in the fruit sector. The expansion of mango, lychee, and longan production presents opportunities for further development and market expansion. 

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Statewide Data

Source: Hawaiʻi Dept of Agriculture, Market Analysis and News Branch

Vegetables & Melons

Vegetable and melon production on Hawai'i Island is characterized by its diversity and adaptability to the island's varied microclimates. The numbers of vegetable producers on Hawaiʻi Island over the past ten years.

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County Data

Statewide Growth in Vegetables

Statewide data shows strong increases in production of vegetable crops, as shown in the following table released by the USDA NASS Pacific Region Office in 2023.

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Statewide Data

A survey conducted on taro farming across the state of Hawaiʻi estimated total crop production at about 4.8 million pounds and valued at $6.4 million in 2021. Loʻi taro1 led the way for both production and value of 2.6 million pounds (54.7%) and $3.3 million (51.5%) respectively. This is followed by luau leaf2 at 1.9 million pounds (40.0%) and $2.5 million (39.7%) respectively. Upland taro3 accounted for 257,000 pounds, valued at $563,000. In terms of planted acreage statewide, loʻi taro was cultivated in 269 acres (61.4%), followed by luau leaf, grown in 76 acres (17.3%), and upland taro, 29 acres (6.6%). Another 64 acres (14.7%) were reported as fallow land. A total of 438 acres were reported as dedicated to taro farming.

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Statewide Data

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Livestock & Dairy

The livestock and dairy sector on Hawai'i Island represents a significant component of the agricultural landscape, encompassing cattle ranching, poultry production, pig farming, and small-scale dairy operations. This sector not only contributes to the island's food security but also plays a crucial role in land management and cultural heritage.

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County Data

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Statewide Data from HDOA show increases in value in 2023 due to higher prices, even though production volume decreased during the year.

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Statewide Data

Aggregation

The aggregation function of Hawai'i Island's staple food commodities value chain presents both challenges and opportunities for improvement. A significant opportunity lies in the establishment of larger centralized facilities for aggregated storage and high-end processing. Such facilities could serve dual purposes: meeting local demand for fresh and processed fruit products while also facilitating export operations. These centralized hubs could provide economies of scale in storage, processing, and distribution, potentially making Hawai'i Island fruits more competitive in both local and export markets.

 

Complementing these larger facilities, there's a recognized need for localized, smaller-scale facilities to support processing and packaging for small farms. These localized facilities serve as collection points for small producers, allowing them to aggregate their produce and access larger markets that they might not be able to supply individually. This two-tiered approach to aggregation – centralized facilities for larger operations and local facilities for smaller producers – could help balance the needs of different scales of fruit production on the island.

 

Food hubs have emerged as a crucial component in the aggregation process, playing a vital role in balancing supply and demand and acting as a buffer between producers and consumers. These hubs serve multiple functions, including product aggregation, processing, distribution and marketing. They can be particularly beneficial for small and medium-sized farms, providing them with access to markets that might otherwise be out of reach due to volume or consistency requirements.

 

The aggregation of vegetables presents unique challenges due to the diverse nature and varying shelf lives of these crops. Unlike fruits, which often have longer shelf lives, many vegetables require rapid aggregation and distribution to maintain freshness. The island's food hubs play a crucial role in aggregating vegetables from multiple small producers. For instance, the Hawai'i 'Ulu Cooperative, while primarily focused on breadfruit, has expanded to include various vegetables in its aggregation and distribution network.

 

The aggregation function varies significantly between sectors. For cattle, the Hawaiʻi Cattlemen's Council, representing about 130 producers, plays a crucial role in coordinating between ranchers and facilitating marketing efforts. In 2020, they reported coordinating the shipment of approximately 30,000 calves to mainland feedlots.

 

For smaller livestock operations, aggregation is often informal. The Hawai'i Island Meat Cooperative, established in 2018, has been working to aggregate products from small-scale poultry and pig farmers. As of 2021, they reported working with 25 member farms. In the dairy sector, the small scale of current operations means most aggregation happens at the farm level. The Hawai'i Island Goat Dairy Association, formed in 2019, represents five producers and has been working to coordinate marketing and distribution efforts.

 

Challenges in aggregation persist however, particularly for small farms. Many struggle to supply reliable volumes and consistent quality to larger buyers, including supermarkets and institutional purchasers. This challenge highlights the need for better coordination and infrastructure in the aggregation process. Improved communication systems between producers and aggregators, standardized quality grading processes, and flexible storage solutions could help address these issues and strengthen the overall aggregation system for Hawai'i Island's fruit sector.

Processing

The processing function of Hawaiʻi Island's staple food crops value chain is crucial for adding value to raw agricultural products. Stakeholders, including HIAP members and agricultural producers, have emphasized the need for increased access to processing facilities, services, and equipment to capture more value-added profits at the farm level. This need was highlighted in a 2022 design charette held in Hilo, which focused on the development of The Food Basket's Agriculture Innovation Center at their planned Food Campus in Hilo. The following sections detail the processing capabilities and challenges for fruits, vegetables, and livestock on Hawaiʻi Island.

Fruits
The fruit processing sector on Hawaiʻi Island has significant potential for growth. There is a pressing need for localized, shared processing facilities accessible to small farms. Such facilities could include dehydrators, mills, high-pressure pasteurization units, commercial kitchens, flash freezers, and cold storage facilities. These facilities would enable small-scale farmers to engage in value-added production without the prohibitive costs of individually investing in processing infrastructure.


 

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Challenges in this sector include high equipment and construction costs and complex permitting processes. The lack of readily available capital and the business risks associated with seasonal supply fluctuations further complicate the development of processing infrastructure. Despite these challenges, the potential benefits of improved processing capabilities are substantial. These facilities could help preserve surplus fruit during peak seasons, reduce waste, and create new product lines with longer shelf lives and higher market values.

 

Innovative processing techniques could open new market opportunities. For instance, developing fruit powders through advanced drying and milling processes could create shelf-stable products for the nutrition and natural foods markets. Similarly, extracting fruit oils and essences could meet the growing demand for natural flavors and fragrances in the cosmetics and food industries. Such value-added products could significantly increase the profitability of the fruit sector and help smooth out the seasonality of income for producers. The graphic below highlights the trends in new processing technologies.
 

Vegetables
Vegetable and melon processing on Hawaiʻi Island represents a largely untapped opportunity. Most vegetables are currently sold fresh, with limited value-added processing. Developing processing capabilities, such as vegetable powders and dried products, could extend shelf life and create new product lines. For melons, fresh-cut and packaged products could cater to the tourism and hospitality sectors.

Developing these processing capabilities requires investment in specialized equipment and adherence to strict food safety regulations. A unique challenge in vegetable processing is the need for facilities that can handle a wide variety of produce types, necessitating flexible processing solutions.

Livestock
Livestock processing is a critical bottleneck in Hawaiʻi Island's agricultural value chain. As of 2021, there were only two USDA-certified slaughter facilities on the island: Hawaiʻi Beef Producers in Paauilo and Kulana Foods in Hilo, with a combined capacity estimated at 15,000 head per year. This capacity is insufficient for the island's production, leading to the shipment of approximately 60% of the island's cattle to the mainland for finishing and processing.

 

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Statewide Data

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Distribution

The island's unique geography, topography, and isolation present significant logistical challenges that impact the efficiency and cost-effectiveness of distributing agricultural products. Stakeholders across the agricultural sector have highlighted the need for improved distribution networks to ensure timely and efficient delivery of products to both local and export markets. This section explores the distribution challenges and opportunities for fruits, vegetables, and livestock on Hawaiʻi Island, drawing on stakeholder feedback, recent studies, and collaborative efforts aimed at enhancing the distribution infrastructure.

 

Fruits

The distribution of fruits on Hawaiʻi Island faces several challenges due to the island's geographic isolation and diverse topography. A significant issue is the misalignment between supply and demand, creating a supply-constrained environment. This misalignment results from several factors, including differences in expectations between producers and buyers, harvest timing issues, and inadequate demand forecasting. The seasonal nature of many fruit crops leads to periods of oversupply followed by shortages, complicating the efforts of distributors to maintain a consistent supply to their customers.

 

Logistical challenges are also prominent in the fruit distribution process. The distance between small producers and processing facilities increases transaction costs and complicates logistics. Many small farms are located in remote areas with limited access to major transportation routes, making it difficult and expensive to move produce to market quickly and efficiently. Some stakeholders have proposed developing a more robust island-wide transportation network specifically designed for agricultural products, including the establishment of refrigerated consolidation points in key agricultural areas.

 

Cold chain management is another critical aspect of fruit distribution. Many tropical fruits require specific temperature and humidity conditions to maintain quality during transport and storage. Developing improved cold storage facilities at key points in the distribution network, coupled with refrigerated transportation options, could help extend the shelf life of fruits and reduce post-harvest losses. This is particularly important for maintaining the quality of high-value, perishable fruits destined for export markets.

 

For export markets, air freight plays a significant role, particularly for high-value, perishable fruits like papayas and mangoes. However, the high cost of air transportation can make it challenging for local fruits to compete in international markets. Exploring options for more efficient packaging and transportation methods, as well as focusing on high-value niche markets that can absorb higher transportation costs, could help overcome this challenge and improve the competitiveness of Hawaiʻi Island fruits globally.

 

Vegetables & Melons

The distribution of vegetables and melons on Hawaiʻi Island presents unique challenges due to the perishable nature of these crops and the island's geography. Rapid distribution is particularly critical for leafy greens and other highly perishable vegetables. To address this, some innovative farmers have implemented direct-to-consumer delivery systems, using refrigerated vans to deliver fresh produce directly to homes and restaurants. This model has gained traction, especially in more remote parts of the island where access to fresh produce is limited.

 

For melons, which have a longer shelf life than many vegetables, distribution challenges are more related to handling and transportation to prevent bruising and maintain quality. Some melon producers have invested in specialized packaging solutions to protect their produce during transit. Farmers' markets play a crucial role in the distribution of vegetables and melons, providing a direct link between producers and consumers. These markets are particularly important for specialty and heirloom varieties that may not meet the standardized requirements of larger retailers.

 

Livestock & Dairy

The distribution of livestock products on Hawaiʻi Island is influenced by the island's geography and the perishability of the products. For beef, the Hawaiʻi Beef Industry Council reported that in 2020, approximately 70% of the island-produced beef was consumed locally, with the remainder exported to other Hawaiian Islands or the mainland. Local distribution networks for smaller livestock producers are often informal, with a 2019 survey by the University of Hawaiʻi finding that 65% of small-scale poultry and pork producers on the island sold directly to consumers or restaurants.

 

Dairy products are primarily distributed locally due to their perishable nature. The Hawaiʻi Island Goat Dairy Association reported that in 2020, 90% of their members' products were sold within a 50-mile radius of production. Improving local distribution infrastructure, such as establishing additional cold storage facilities and enhancing local transportation networks, could further support the distribution of livestock products and reduce post-harvest losses.

 

Across the Value Chain

Improving the distribution of staple food crops on Hawaiʻi Island requires addressing logistical challenges, enhancing cold chain management, and developing more efficient transportation networks. Stakeholders have identified several potential solutions, including establishing refrigerated consolidation points, investing in specialized packaging solutions, and exploring more efficient air freight options for export markets. By implementing these strategies, Hawaiʻi Island can enhance the efficiency and cost-effectiveness of its distribution networks, supporting the growth and sustainability of its agricultural sector and improving the competitiveness of its products in local and global markets.

Marketing

Marketing plays a pivotal role in the value chain of staple food crops on Hawaiʻi Island, ensuring that high-quality products reach appreciative consumers. Effective marketing strategies can align production with market demand, reduce waste, increase profitability, and open new market opportunities. This section examines the marketing strategies for fruits, vegetables, and livestock, highlighting successful initiatives and identifying areas for improvement. The following pie chart shows the results of a 2020 Producer survey highlight the marketing outlets for their products.

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County Data

Fruits

The marketing of fruits on Hawaiʻi Island emphasizes aligning production with market demand through improved demand forecasting and market intelligence. By understanding consumer preferences in both local and export markets, producers can make informed decisions about what to grow and when to harvest. Organizations like the Hawaiʻi Papaya Industry Association actively promote Hawaiʻi papayas in key export markets such as Japan, which helps build brand recognition and expand market opportunities for other fruits. The graph below shows the most recent survey of buyer demand for fruits in Hawaiʻi.

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County Data

Agritourism offers another promising avenue for marketing Hawaiʻi Island fruits. Leveraging the island's natural beauty and agricultural heritage, fruit farm tours, pick-your-own experiences, and fruit-focused events generate direct sales and build long-term brand loyalty. These activities also provide consumer education about Hawaiʻi Island fruits, further enhancing market demand.

Vegetables & Melons

Marketing vegetables and melons on Hawaiʻi Island focuses on the health benefits and freshness of locally grown produce. The trend of "harvest boxes" or "CSA boxes," which include a variety of seasonal vegetables, appeals to consumers seeking diverse, locally sourced produce. The island's culinary scene also plays a significant role in marketing local vegetables, with restaurants featuring dishes that highlight unique local varieties such as Waimea strawberries or Hamakua mushrooms.

Marketing vegetables based on their cultural significance is another emerging trend. Vegetables used in traditional Hawaiian cuisine, like taro (kalo) and sweet potatoes ('uala), are promoted both as food items and as part of cultural preservation efforts. This approach not only supports local agriculture but also fosters a deeper connection between consumers and the island's agricultural heritage.

Livestock & Dairy

Marketing for livestock products on Hawaiʻi Island emphasizes the unique qualities of island-raised animals. The "Hawaiʻi-raised beef" brand, promoted by the Hawaiʻi Beef Industry Council, has seen growing recognition, with a reported 25% increase in brand awareness among local consumers between 2018 and 2020. For poultry and pork, marketing often highlights sustainability and quality, with 80% of customers citing "locally raised" as a primary purchasing factor, according to a 2020 survey by the Hawaiʻi Island Meat Cooperative.

In the dairy sector, artisanal and specialty products are key to successful marketing. The Hawaiʻi Island Goat Dairy Association reported that their members' products commanded a premium of 30-50% over imported alternatives in local markets in 2020. These marketing efforts underscore the value of promoting the unique attributes of locally produced livestock products to enhance market appeal and profitability.

Across the Value Chain

Common marketing issues, needs, and opportunities span the entire value chain of staple food crops on Hawaiʻi Island. Key areas for improvement include enhancing market intelligence, expanding marketing campaigns, and developing new market opportunities through agritourism and value-added products. By better aligning production with market demand and promoting the unique qualities of Hawaiʻi Island's agricultural products, stakeholders can increase profitability and competitiveness across the value chain.

Effective marketing strategies require a deep understanding of market systems and dynamics, including consumer preferences, demand forecasting, and supply chain logistics. The Market Systems Development Initiative (MSDI) aims to improve stakeholder understanding of these market systems, fostering a collaborative approach to addressing challenges and leveraging opportunities.

Sales

The sales function of the island's staple food commodities faces several challenges but also presents unique opportunities. One significant issue is that farmers often struggle with accessing markets that offer suitable prices. This challenge stems partly from a lack of awareness of market opportunities and competition from low-grade imported products. Addressing this issue requires a multi-faceted approach, including better market information systems, collective marketing efforts, and potentially policy measures to support local producers.

 

Fruits

Obtaining price data in Hawaiʻi has been difficult without carrying out expensive surveys. National averages of prices for fruit products as outlined in the following table provides some benchmarking in the absence of more locally sourced data.

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The competitiveness of local products is challenged by high labor and land costs on Hawai'i Island. To address this, there is a need for more protective measures against low-grade imported products and better marketing strategies to enhance the visibility and market presence of local agricultural products. Emphasizing the unique qualities of Hawai'i Island fruits, such as their flavor, freshness, and the sustainable practices used in their production, can help justify premium pricing and differentiate local products from imports.

 

On the positive side, the growth of farmers' markets and community-supported agriculture (CSA) programs on Hawai'i Island has provided new direct-to-consumer sales channels for fruit producers. These venues not only offer better margins for farmers but also help to educate consumers about local fruits and build community connections around food. Expanding and supporting these direct sales channels could be an important part of a comprehensive sales strategy for the fruit sector.

 

Vegetables

Sales channels for vegetables and melons on Hawai'i Island are diverse, ranging from traditional grocery stores to innovative direct-sales models. Farm stands and roadside markets are particularly popular for vegetable sales, allowing farmers to sell fresh produce directly to consumers. One unique sales channel that has gained traction is the "workplace CSA" model, where boxes of fresh vegetables are delivered to workplaces for employee purchase. This model has been successful in reaching consumers who might not typically visit farmers' markets.

For melons, which are often seen as a luxury item, there's potential in developing premium packaging and branding to target high-end markets, including luxury resorts and gourmet food stores on the island.

 

A summary of Operations and Sales for Hawaiʻi Island’s vegetable farms is shown in the following table:

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County Data

A challenge specific to vegetable sales on Hawai'i Island is competition from imported produce, which can often be sold at lower prices. To combat this, local producers are increasingly emphasizing the freshness, quality, and lower carbon footprint of their island-grown vegetables, appealing to environmentally conscious consumers. As with the island’s fruit products, obtaining average price data in Hawaiʻi has been difficult without carrying out expensive surveys. National averages of prices for vegetable and melon products as outlined in the following table provide some benchmarking in the absence of more locally sourced data.

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Livestock

Data from the USDA NASS 2022 Agriculture Census provides an overview of livestock and egg sales over the past decade. A summary of key data related to Livestock Sales is provided in the following table.

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County Data

Sales channels are diverse. For beef, while traditional grocery stores account for about 50% of sales, direct-to-consumer sales have been growing. The Hawaiʻi Cattlemen's Council reported a 40% increase in direct sales between 2018 and 2020. Poultry and pork sales are often through direct channels. The Hawai'i Island Meat Cooperative reported that 70% of their members' sales in 2020 were through farmers' markets or direct farm sales.

 

For dairy products, sales are primarily local. The Hawai'i Department of Agriculture estimated that in 2020, 85% of locally produced dairy products were sold through farmers' markets, health food stores, and direct from farm stands. The cultural importance of certain products drives unique sales patterns. For example, the Hawai'i Tourism Authority reported that in 2019, before the COVID-19 pandemic, about 12% of visitors to Hawai'i Island attended a luau, creating steady demand for whole roast pigs.

Supporting Functions

The supporting functions within Hawaiʻi Island's agricultural sector are critical to enhancing the productivity, sustainability, and competitiveness of the local agricultural value chains. These functions include input supplies, information, infrastructure, finance, support services, and training and education. Below is an overview of each of these key areas, emphasizing their role in supporting the staple food crops and export crops being analyzed.

The supporting functions within Hawaiʻi Island's agricultural sector are critical to enhancing the productivity, sustainability, and competitiveness of the local agricultural value chains. These functions include input supplies, information, infrastructure, finance, support services, and training and education. Below is an overview of each of these key areas, emphasizing their role in supporting the staple food crops and export crops being analyzed.

 

Input Supplies

Input supplies are essential for the agricultural operations on Hawaiʻi Island, providing farmers with the necessary materials such as seeds, fertilizers, pesticides, and equipment. Reliable access to quality inputs directly impacts crop yields and farm profitability. Challenges in this area include the high cost of importing agricultural inputs due to Hawaiʻi's geographical isolation and the need for locally adapted varieties that can thrive in the island's unique climate conditions.

 

Information

Access to timely and accurate information is crucial for farmers to make informed decisions. This includes market information, price averages, new technologies, equipment, and market opportunities. The Hawaiʻi Department of Agriculture's Market Analysis and News Branch plays a vital role in disseminating this information, offering regular reports on agricultural markets that help farmers understand price trends and market conditions. Additionally, community-based organizations like The Kohala Center conduct market research and provide insights into new opportunities for local agricultural products.

 

Infrastructure

Infrastructure is a backbone for the efficient functioning of agricultural value chains. This encompasses transportation, storage facilities, and processing units. The geographic dispersion of farms across Hawaiʻi Island makes transportation a critical factor, with significant costs associated with moving goods to market. Improved infrastructure, including better road networks and cold storage facilities, is essential to reduce losses and ensure timely delivery of fresh produce. Initiatives like the Hawaiʻi Department of Transportation's "Agricultural Transportation Program" provide subsidies to lower shipping costs for farmers, thereby enhancing their competitiveness.

 

Finance

Access to finance is a major enabler for agricultural growth. Financial institutions and government programs provide loans, grants, and subsidies to support farm operations, equipment purchases, and expansion projects. The Hawaiʻi Department of Agriculture's "Agriculture Loan Program" and the USDA's Rural Development program are key sources of funding for local farmers. However, the availability and accessibility of these financial resources can be a challenge, particularly for small-scale and beginning farmers.

 

Support Services

Support services, including business services, legal services, and marketing support, are essential for the operational efficiency and market success of agricultural enterprises. These services help farmers with financial management, legal compliance, and effective marketing strategies. For detailed information on the current state of support services on Hawaiʻi Island, refer to the Agribusiness Services Value Chain section of this report, which outlines the existing landscape, challenges, and opportunities in this area.

 

Training and Education

Training and education services are fundamental to developing a skilled agricultural workforce and enhancing farm productivity. They provide farmers with the knowledge and skills needed to adopt new technologies, improve their practices, and comply with regulatory standards. Public and private sector entities, such as the University of Hawaiʻi and various non-profit organizations, offer a range of training programs focused on technical skills, financial management, and sustainable farming practices.

Rules

The Rules within the Staple Food Commodities market ecosystem encompass various legislative, regulatory, and informal frameworks at the county, state, and federal levels. These rules significantly impact the operations of farmers, ranchers, and other stakeholders, influencing everything from land use and water access to food safety and marketing standards. Below is a detailed summary of stakeholder feedback on compliance issues and suggested changes in legislation, categorized by the type of rule and the level of government.

County Rules

  • Building Permits and Property Taxes: Stakeholders expressed concerns over the cumbersome and costly process of obtaining building permits for agricultural structures. The time-consuming nature and the complex requirements for compliance often discourage small farmers from expanding their operations. Additionally, property tax policies were highlighted as a barrier, particularly when agricultural land is reassessed at higher rates that do not reflect its productive value. There were calls for more agricultural exemptions and streamlined processes to make compliance more feasible for small-scale farmers.

  • Ag Tourism Permits: Permitting for ag tourism activities, such as farm tours, faces specific challenges, including requirements for infrastructure like bus turnarounds, which many farms lack. Stakeholders recommended revisiting these regulations to promote ag tourism without imposing prohibitive costs on farmers.

  • Wastewater and Water Access: Access to clean water and wastewater management were recurring issues. The current Department of Health rules make it difficult for farms and commercial kitchens, particularly those on catchment systems, to meet compliance standards. There were suggestions to modify these rules to better accommodate the unique needs of agricultural operations on the island.

 

Hawaiʻi State Rules

  • Department of Health (DOH) Regulations: State-level regulations, particularly those enforced by the DOH, present significant barriers to food manufacturing and processing. For example, the strict rules around wastewater and the difficulty in getting permits for commercial kitchens were cited as major hurdles. There is a call for the DOH to adopt more flexible policies that consider the realities of local farming and food production.

  • Cottage Laws and Food Safety Modernization Act (FSMA): Stakeholders discussed the need for expanding the range of products allowed under the state's cottage food laws, which would enable more small-scale producers to legally sell homemade goods. Additionally, compliance with the FSMA poses challenges, especially for small farms that struggle with the costs and complexities of meeting federal food safety standards.

  • Agricultural Tourism and On-Farm Housing: There is strong support for legislative changes that would allow for on-farm housing for labor, recognizing the critical need for affordable and accessible housing for farm workers. This would also help address the broader issue of housing availability on the island.

 

Federal Rules

  • Food Safety Modernization Act (FSMA): The FSMA is a significant federal regulation affecting local farmers, particularly in terms of compliance with food safety standards. The cost and administrative burden of meeting these requirements can be overwhelming for small producers. Stakeholders suggested that there should be more federal support and guidance to help small farms comply without compromising their financial viability.

  • H2A Program and Labor Regulations: The federal H2A program, which allows farms to hire foreign labor, was criticized for being overly complex and difficult for small farms to navigate. Simplifying this program or providing more support for small farmers to use it effectively would help alleviate labor shortages.

 

Suggested Changes in Legislation

  1. Streamlining Permitting Processes:

    • Simplify the process for obtaining building permits for agricultural structures.

    • Introduce more agricultural exemptions for small-scale operations.

  2. Water and Wastewater Management:

    • Modify DOH regulations to better support farms using catchment systems and alternative water sources.

    • Develop clear guidelines and support for wastewater management that is feasible for small farms.

  3. Supporting Ag Tourism:

    • Adjust infrastructure requirements to make ag tourism more accessible for small farms.

    • Promote policies that support the growth of ag tourism without imposing undue financial burdens.

  4. Expanding Cottage Laws:

    • Broaden the scope of allowable products under cottage food laws to support small-scale producers.

    • Provide education and resources to help producers comply with these regulations.

  5. Enhancing On-Farm Housing:

    • Legislate to allow on-farm housing for labor to support the agricultural workforce.

    • Provide incentives or support for developing affordable housing for farm workers.

  6. Federal Support for FSMA Compliance:

    • Increase federal assistance and resources to help small farms meet FSMA requirements.

    • Consider tiered compliance standards based on farm size and capacity.

 

By addressing these challenges through legislative and regulatory changes, stakeholders believe it is possible to create a more supportive and sustainable environment for Hawaiʻi Island's agricultural sector.

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