Issue #5

Value-Added Food Products

 

 

Problem, Opportunity Statement

 

Agriculture is Pennsylvania’s number-one industry and food is the primary output of that industry. The 1997 farm gate value in Pennsylvania was $4.7 billion, and the value of output from the food-processing sector was $23.1 billion. The Pennsylvania food processing industry consists of over 1,500 companies and nearly 83,000 employees.  Food processing represents about 10 percent of all manufacturing in the state in terms of the value of shipments, number of employees, number of companies, and value of payroll.1  Thus, food processing adds significant value to the raw agricultural output and contributes significantly to the state’s economy.

 

The food processing industry is the primary connection between the interests of farmers, food retailers and, ultimately, consumers. This connection occurs through the transformation of raw farm output into value-added food products and ingredients. Processing adds about 12 percent to the value of agricultural inputs.2

 

Pennsylvania has a rich history of food processing and is one of the leading states in terms of the number of processors in meat and poultry, dairy, bakery, fruits and vegetables, snack foods, and confectionary. Seventy-five percent of food processors in the state have less than 50 employees.3 Consequently, many of those processors have limited knowledge of new technologies and market opportunities due to a lack of internal resources. In addition, farmers typically operate with limited resources for exploring new market and technology opportunities. Farmers may be able to increase their profitability, sustainability and share of on-farm income by focusing more of their efforts on

“adding value” to their primary agricultural commodities and selling directly to consumers or to the food distribution network.

 

Extension is uniquely poised to assist small processors and farmers implement new technologies, marketing strategies and entrepreneurial business concepts through education and technical assistance. The effect of that assistance will be the addition of value and long-term sustenance to Pennsylvania food processors, farmers and entrepreneurs.

 

1 US Bureau of the Census, 1997, in: 2003 Pennsylvania Abstract, PA State Data Center

2 USDA Economic Research Service, April 2003, http://www.ers.usda.gov/briefing/foodmarketstructures/processing.htm

3 Pennsylvania County Industry Trends, June 2003, PA State Data Center

 

 

Subject Matter Areas

 

 

 

 

 

 

Program Titles and/or Program Topics by Subject Matter Area

 

Processing and Production Technology

o       Ingredients and Formulation

o       Product Innovation

o       Regulations

o       Raw Material Selection

 

o       Equipment Operation and Maintenance

o       Packaging Technology

o       Process for Quality and Consistency

 

o       Personnel Development

o       Career Opportunity Awareness

                       

o       Marketing

o       Cooperative Opportunities

o       Entrepreneurship

o       Understanding Regulatory Requirements and Compliance

 

Resources

 

o    USDA

o    PDA

o    FDA

o    State funds for  extension staff educators—county and university based

o    PENNTAP

o    Local business experts, bankers, SBDC, SBA, Economic Development  Offices

 

 

Indicators

 

·       Number of participants who gained knowledge (in areas of resources, regulations, etc.).

·        Number of participants who made selections or developed a plan.

·        Number of participants who made changes.

·        Number of businesses reporting increased productivity, profitability, and employee retention.

·        Number of businesses reporting implementation of new technology.

·        Number of participants entering food processing industry as a career.