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Econ Focus

Fourth Quarter 2020

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Food Hubs

Food hubs are an important example of intermediaries in regional supply chains that have values-based community missions. According to the USDA, food hubs are businesses and organizations that provide resources and services to local and regional producers to improve their capacity to match consumer demand. Within the Fifth District, there were 40 food hubs in 2019, representing 17 percent of the national total. Most Fifth District food hubs offer distribution, aggregation, and processing services and engage their communities through donations to food banks, Supplemental Nutrition Assistance Program benefits, also known as SNAP, and nutritional education or workforce development programs.

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"Ways to improve production flexibility are capital-intensive," says Miguel Gomez, director of the Food Industry Management Program at Cornell University. "Food hubs can play a key role as points of aggregation and post-harvest processing to help farmers achieve larger volumes and be efficient in distribution." Surekha Carpenter of the Richmond Fed explained in an article last year that food hubs provide small farmers with access to these capital-intensive resources that they would not have individually. (See "Food Hubs: Mission-Driven Local Food Systems in the Fifth District," Community Scope, 2019.) As seen in the Fifth District, food hubs' social missions make them unique among participants in supply chains and allow them to benefit low- and moderate-income communities.

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