Friday, August 20, 2010

Local-Food Entrepreneurs bring Produce directly to Eaters

Lexington Herald-Leader

RALEIGH, N.C. - "From farm to fork" has long been the rallying cry of the eat-local movement.

But getting the food from the farm has been a barrier for some consumers who don't have time to shop at farmers markets or who find community-supported agriculture programs, better known as CSAs, inconvenient.

Enter a new breed of business - a middleman between consumers and farmers - that tweaks the old model.

Traditionally, a consumer who joins a farmer's CSA pays up to $600 in the winter for a weekly share of produce from spring to fall. Though the programs are popular - there are more than 100 in North Carolina, up from 35 in 2002 - many people cannot pay for a whole season of produce in advance, volunteer on a farm or pick up the food at designated times as many programs require. Other people simply don't know what to do with an abundance of beets or kale.

That has created an opportunity for businesses such as Papa Spuds and The Produce Box, which allow customers to pay for their produce as they go - generally $20 to $30 per box. They offer customers more choice and generally stock products from several farms rather than just one. In addition, the boxes are delivered to customers' homes.

These new businesses are bringing hundreds of new customers to the table, helping to make farming financially viable for more small farmers.

In two years, The Produce Box has grown from 25 customers to nearly 3,000. At the end of last season, the Raleigh company was filling 900 boxes a week, and owner Courtney Tellefsen said demand is growing steadily this year. Some areas have a waiting list to become a Produce Box customer.

This type of system has been feasible only for a few years, said Rob Meyer, co-founder of Papa Spuds, a similar operation in Cary, N.C. He credits his partnership with Eastern Carolina Organics, a Pittsboro, N.C., group that acts as a distributor for local organic products.

Meyer's company, which offers meat and produce, also contracts directly with dozens of farms throughout the state to get the volume and variety customers demand.

"If you were going to do local organic in our size in this area, there aren't enough farms," he said.

Sandi Kronick, CEO of Eastern Carolina Organics, said the new businesses complement farmers' other efforts to reach consumers. Eastern Carolina Organics is farmer-owned and distributes organic products from farmers to restaurants, retailers and companies such as Papa Spuds.

"CSAs are overbooked by February, and there's always going to be customers who choose to go pick up off the farm," Kronick said. "The point is that the money is flowing throughout the local community, and hopefully it's resulting in more acres turning into organic in the state."

The Produce Box partners with Lee Farms in Dunn, N.C., where the sorting and packing is done on site, often within hours of the items' being picked. The company then relies on a network of women who do not work outside the home to distribute the boxes throughout the Triangle.

Papa Spuds gets bulk shipments from Eastern Carolina Organics at its Cary warehouse, where everything is packed and then distributed.

"It took us a year to turn a profit," Meyer said. "We bootstrapped the hell out of it at first. We got our feet and hands really dirty."

For customers like Jessica McRackan the new businesses make eating local feasible.

McRackan, 29, of Cary gave birth to a daughter at the end of March, an event that put an end to her regular trips to the farmers market.

"I like it better," she said of the deliveries. "I love the environment of the farmers market; it's a lot of fun. But it's often hot and it's crowded."

McRackan has become such a fan of The Produce Box service that she writes a blog dedicated to sharing what she does with the contents of each box she receives. She posts meal plans and recipes to help others figure out what to do with less familiar produce.

Tuesday, August 17, 2010

Government Starts Talks about New Mortgage System

Associated Press

Talk of shrinking the government's involvement in the mortgage market is growing. Just don't expect action any time soon.

A conference Tuesday at the Treasury Department is the first of many steps toward restructuring the nearly $11 trillion mortgage market. So far, rescuing mortgage giants Fannie Mae and Freddie Mac has cost the government more than $148 billion. That number is expected to grow.

Treasury Secretary Timothy Geithner pledged "fundamental change" to the structure of Fannie and Freddie, which profited tremendously during good times but burdened taxpayers with losses when the housing market went bust. He said the two companies weren't the only cause of the financial crisis, but made it worse.

Geithner, however, did not offer a specific exit strategy for Fannie and Freddie. He said only that, "it is our responsibility to make sure that we create a system that is not vulnerable to these same failures happening again."

With Republicans likely to pick up seats in Congress in November, however, the Obama administration will need support from both political parties for the changes it proposes.

Reflecting this reality, Geithner said that "the failures that produced the system we have today were bipartisan. The solution must be as well."

Executives and mortgage experts are prepared to tell Obama officials that the government must stay in the business of backing U.S. mortgages even if Fannie and Freddie disappear someday.

"At the end of the day, the government will still have a very large role to play," said Mark Zandi, chief economist at Moody's Analytics and a panelist at the event. Others include mortgage executives from Bank of America Corp. and Wells Fargo & Co, plus Bill Gross, managing director of bond giant Pimco and Lewis Ranieri, one of the creators of mortgage bonds.

The Obama administration's management of Fannie and Freddie has been under fire for months from Republicans on Capitol Hill. In December, the Treasury Department eliminated a $400 billion cap on how much money it would give the mortgage giants to keep them from failing. Sen. John McCain, R.-Ariz., has called that a "taxpayer-backed slush fund" and called for the support to be wound down.

Many in the mortgage industry say that's not realistic.

"There has to be a game plan," said Paul Leonard, vice president of government affairs at the Housing Policy Council, a mortgage industry group. "You can't just pull the plug on them."

Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans - even after the housing market collapsed.

The two mortgage giants, the Federal Housing Administration and the Veterans Administration together backed about 90 percent of loans made in the first half of the year, according to trade publication Inside Mortgage Finance.

At some point the government will have to scale back the level of support it provided the housing and mortgage markets during the recession and financial crisis.

"The government's footprint in the housing market needs to be smaller than it is today," said Shaun Donovan, President Barack Obama's housing secretary.

Most of the plans being circulated to reshape the mortgage market call for the government to guarantee that investors who buy mortgage-backed securities receive their money even if borrowers default.

Under this system, Fannie and Freddie could either be returned to private ownership or phased out completely. Fannie and Freddie, or their replacements, would pay the government to insure the loans. That money could be tapped if the housing market collapses.

"A government guarantee is both a desirable and necessary component of the country's housing finance system," wrote John Gibbons, a Wells Fargo & Co. executive vice president, in a letter last month to the Treasury Department.

Geithner said that there is a "strong case to be made" for such a government guarantee, but said the government needs to charge enough money to make sure the taxpayer does not get hit with losses in the future.

Thursday, August 5, 2010

Caterpillar Picks NC for Second Plant in Two Weeks


SANFORD, N.C. — Heavy equipment manufacturer Caterpillar Inc. announced an expansion at its Sanford plant on Thursday afternoon, bringing more than 300 jobs back to a facility that has seen cutbacks in recent years.

Gov. Beverly Perdue and other state and local officials were at the plant to herald the $28.3 million expansion, which is expected to add 325 jobs over the next four years. An unidentified Caterpillar supplier is also expected to bring 160 jobs to North Carolina to work with the plant, officials said.

“For the second time in less than a week, Caterpillar is making a major investment in North Carolina and strengthening its ties as a corporate citizen of our state,” Perdue said in a statement. “By expanding its stake in North Carolina, Caterpillar has demonstrated that our own investments in education, worker training, transportation and infrastructure have paid off.”

Last Friday, the company said it would build a $426 million factory in Winston-Salem to produce axle units for large mining equipment. It could employ about 500 full-time and contract workers in five years.

Caterpillar will build a 270,000-square-foot addition to the Sanford plant that will house logistics and robotic welding lines to produce skid steer loaders and other equipment, officials said. About half of the new production is slated for export, they said.

Construction is expected to start in September, with production beginning by next July, officials said. The average annual wage for the new jobs will be $35,602, plus benefits, they said.

The Sanford plant and another Caterpillar facility in Clayton have experienced several rounds of layoffs since late 2008, as the company adjusted to the global economic slowdown.

Lee County's unemployment rate is more than 12 percent, and Sanford Mayor Cornelia Olive said it was difficult for her to stop smiling on Thursday with hundreds of new jobs on the horizon.

"This has been a hard couple years for Lee County," Olive said.

Charles Childress, who lost his job as a machinist five months ago, already lined up an interview for Monday for a job at Caterpillar.

"It's hard to find a job. It really is," Childress said. "I know a lot of people out there need work, and there's a lot of people out there qualified (for the Caterpillar jobs)."

Caterpillar employs 1,026 full-time workers in seven North Carolina counties, and with the economy stabilizing, the Peoria, Ill.-based company appears to be gearing up for growth again.

Lee County commissioners in June offered Caterpillar up to $900,000 in incentives to land the plant expansion.

Caterpillar also was awarded a $600,000 grant from the One North Carolina Fund, which provides cash grants to attract business projects to the state. No money is paid up front, and companies must meet job creation and investment targets to obtain the funding.

Also, the state Economic Investment Committee voted Thursday to award a Job Development Investment Grant to Caterpillar. Under the terms of the JDIG, the company is eligible to receive a grant equal to 75 percent of the state withholding taxes on the new jobs for each year in which it meets annual performance targets.

If Caterpillar meets the all of the targets during an 11-year period, it could garner $3.46 million from the JDIG.