Key Takeaways

In the summer of 2024, Auburn University conducted eleven focus groups for the Economic Development Partnership of Alabama (EDPA). Focus group members included farmers, ranchers, growers, producers, owners of agribusiness entities, agricultural processors and manufacturers, and agricultural lenders. The purpose was to explore the participants’ perspectives on opportunities for economic development in Alabama agriculture. Focus groups discussed challenges and potential opportunities for economic development, sharing examples from other states that could be replicated in Alabama. The following are key takeaways:

• All data presented in this summary is derived from the perspectives of those in the agriculture industry. Some of the data provide actionable suggestions, whereas other data offer insights into their perspectives, which are relevant for understanding the industry and present context.
• Participants proposed wide-ranging opportunities for economic development in agriculture and Alabama. No project or commodity was agreed upon as the best focus for investment. Instead, focus group participants suggested numerous interconnected economic development and investment avenues across different commodities.
• Focus group participants emphasized the importance of expanding food and agricultural processing and manufacturing for the further development of Alabama-grown products. They also highlighted workforce development programs, value-added ventures, and novel funding programs as potential key focus areas.
• To take advantage of these opportunities, focus group members stressed that economic development efforts should also consider and understand existing industry challenges to profitability, farmland conversion, and infrastructure investment.
• The focus group participants concluded that balancing these opportunities with ongoing challenges presents a promising future for Alabama’s agriculture, driven by the resilience of its farmers and stakeholders, making the sector attractive for investment.

Project Summary

Introduction

Agriculture is an integral part of Alabama’s economy. To better grasp the perspectives of those involved in the industry on opportunities for economic development and agriculture, the Economic Development Partnership of Alabama (EDPA) commissioned a series of focus groups representing different aspects of the agriculture industry in the state. In these focus groups, participants discussed economic development and agriculture challenges and potential targeted opportunities to pursue in Alabama. Individuals also shared examples of other state policies and programs that could be replicated in Alabama to spur economic development in the agricultural industry and rural communities.

Methodology

The Auburn University research team conducted eleven focus groups with farmers, producers, growers, agribusiness owners and employees, agricultural processors and manufacturers, and agricultural lenders to conduct this research. Nine focus groups were conducted over Zoom, and two were conducted in person between July and August 2024. The focus groups were organized around specific commodities or sectors of the industry. Focus group participants were recruited through commodity and agricultural organizations within Alabama. A total of 115 individuals participated (65 white men, 17 black men, 15 white women, 10 black women, and 8 individuals who did not disclose their gender, race, or ethnicity). Focus groups lasted for 1 to 2 hours and were recorded. The sessions were later transcribed, and the transcript data and focus group field notes were coded in multiple rounds in MAXQDA Analytics Pro by the primary investigator. A second coder, the coinvestigator, reviewed the coding scheme before the final coding round. Any quotes in this report do not include the participants’ names to protect their privacy.

Findings and Discussion

During the focus groups, participants were asked open-ended questions to elicit responses without initial probing or directed questions about specific programs, initiatives, or policies. In these conversations, many individuals provided answers regarding prospective opportunities but also called for considerations of existing challenges to agriculture in Alabama. Participants articulated that understanding the industry context, including and especially challenges those in the industry face, is essential to understanding economic development opportunities. Hence, the first part of this summary includes the participants’ perspectives on key challenges to Alabama’s agricultural industry.

Challenges

Profitability

In Focus Group V, a participant said,“I think the biggest thing is profitability, the leading factor in growing almost anything. If it’s not worth doing, why are you going to spend the resources and all your energy just to be at a break-even point or just barely paying the bills? You know what I’m saying? I think that’s figuring out how to become more profitable, whether in a niche market or something like that. But I think that’s the main driver.”

All your energy just to be at breakeven point or just barely pay the bills.

This sentiment was echoed across all of the focus groups. Participants’ central concern for the agricultural sector is profitability. They identified many factors that contributed to their concerns; the most common ones follow.

Rising Input Costs and Decreasing Commodity Prices

Participants noted that the high cost of production coupled with low commodity prices for row crops and lack of markets for catfish, fruit, and vegetables affects the overall profitability of agriculture.

Labor Availability and Costs

Participants discussed the (un)availability and high labor cost, particularly for labor-intensive operations such as poultry, fruit, vegetable, nursery, and greenhouse production. While focus group participants discussed both skilled and low-wage labor needs, it is important to note that this report did not address focus group participants’ comments regarding federal H-2A labor programs, which are important to agriculture production in Alabama.

Rising Rental Rates on Rented Land and Increases in Real Estate Values

Participants emphasized the growth in Alabama metro areas and the increasing inability to find land to purchase or rent that is economically viable for a farming operation.

Equipment Costs Skyrocketing with Inflation

Participants remarked that the high cost of specific, necessary equipment limits them from diversifying crops as their equipment purchases tie them to particular commodities. The inability to easily diversify crops causes significant stress when commodity prices plummet.

Increasing Transportation Costs with Freight Charges

The rise in costs related to shipping commodities has had a negative impact on the profitability of producers already affected by low commodity prices.

Regional and International Imports

Participants shared their dissatisfaction with existing companies purchasing raw products from outside the southeastern United States for use in agricultural and food manufacturing in Alabama. Additional infrastructure improvement projects, including aggregation transportation, are needed to make Alabama’s raw agricultural products more competitive with regional and international imports.

Producers are often financially stressed. At the core of discussions of new economic development ventures was a strong sentiment to examine the existing strains on the industry related to the profitability of producers, growers, and farmers. When discussing bringing new agricultural processing and manufacturing into Alabama, one participant in Focus Group IX stated, “If you want little towns in rural Alabama to prosper, you need prosperous agriculture.” In this case, “prosperous agriculture begins with profitability.”

Land Conversion

Participants stated that productive land for growing agricultural products must be protected to have successful agriculture-related economic development. In Focus Group II, one participant said, “Who is the next person to take over a farm?” He then scoffs and adds, “Yesterday’s farm is now today’s subdivision.” Throughout the focus groups, participants shared their concerns regarding farmland conversion, with one from Focus Group IV commenting that “We’re losing the land. We have a pretty good rate every year.” Participants attributed farmland conversion in Alabama mainly to urban and suburban growth.

“Yesterday’s farm is now today’s subdivision.”

Focus group participants discussed the attractiveness of many of Alabama’s metro areas and the corresponding rise in real estate prices within those regions. This affects a farmer’s ability to secure additional land for farming purposes and presents challenges related to new residents’ preferences (i.e., land use zoning restrictions and increased traffic, making moving equipment on overburdened roads hazardous, etc.). Farm organizations in Alabama are currently working to address this topic. Most focus group participants shared their desire for statewide legislation that did not incentivize any programs that would actively attract outside investment to Alabama to purchase Alabama farmland and convert it to a nonagricultural purpose.

Transportation Infrastructure

Focus group participants discussed their frustrations with infrastructure in Alabama. One from Focus Group IV stated, “You know, how much more it costs to move it or store it comes out of the value that the farmer receives.” Another from Focus Group II shared, “Anytime that you’re tied to a faraway distance and providing a perishable good, you’re at the mercy of poor infrastructure.” Focus group participants outlined challenges related to the following:

Railroad Infrastructure

Participants desire to utilize rail more; however, there are existing issues with rail efficiency and track networks. The participants identified rail as a key mechanism for improving access to export markets.

Additional Investment in the Port of Mobile for Agricultural Exports

Focus group participants identified the Port of Mobile as a key factor in gaining more financially economical access to international markets. However, participants highlighted that the Port of Mobile should not be leveraged for importing additional agricultural goods but rather be used to target the expansion of agricultural exports related to poultry, nuts, and catfish.

“Anytime you’re tied to a faraway distance and providing a perishable good, you’re at the mercy of poor infrastructure.”

Investment in Storage and Aggregation Capabilities

In addition to infrastructure challenges, participants outlined problems with storage (both on-farm and off-farm) and aggregation capabilities. When investing in strengthening and expanding the existing transportation infrastructure, focus group participants expressed the desire for a comprehensive plan for storage and aggregation to take full advantage of any expansion of port, barge, and rail capabilities.

Focus group members stressed that any infrastructure improvements would have lasting impacts. It should be noted that roads in Alabama were not mentioned as a major transportation infrastructure challenge, which reflects recent successful roadway improvement initiatives in the state. Participants also discussed that many farms and agribusiness companies near the Georgia state line have benefited from Georgia’s agricultural transportation infrastructure initiatives over recent decades. For any scaling up or economic development initiatives, farmers argued that improvements to transportation infrastructure were necessary.

Opportunities

While focus groups had a range of novel ideas regarding economic development strategies, there was consensus on several opportunities across the industry. These ideas center on increasing and adding agricultural processing and manufacturing in Alabama and increasing value-added adventures for farmers and agricultural producers.

Increasing Food and Agricultural Processing and Manufacturing in Alabama

Focus group participants wanted to see more food and agricultural processing and manufacturing in Alabama. An individual in Focus Group I, commented, “There is a need, and we have the capacity to support it.” In Focus Group IV, one individual explained that need by elaborating, “If you want a vibrant rural community, you’ve got to have vibrant agriculture. Integrate agriculture into that community, and people move up the food chain with production facilities and things that go along with it.” Participants identified the following areas of potential focus:

Building on Existing Value Chains

Participants were adamant that any processing and manufacturing targeted for economic development in Alabama be processing manufacturing using Alabama-produced agricultural products. One participant said he welcomes new ventures “as long as they didn’t buy their products on trains.” Trains, in this case, are euphemisms for any form of transportation that will bring outside agricultural goods into the state for further processing. The Alabama agricultural community hopes for the recruitment and incentivization of manufacturing and processing that will keep Alabama agricultural products in Alabama for processing and manufacturing. All commodity groups discussed possibilities for additional processing and manufacturing.

Increasing Processing

Value-Added Processing and Manufacturing

Value-added ventures allow producers to diversify farm incomes and increase their revenue. Agribusiness companies move into value-added ventures to produce products in response to consumer demands. Focus group participants identified the value-added sector as a key factor in economic development— with some important caveats:

Scaling

Value-added ventures can only scale so much. For example a farmer planting several thousand acres of corn will find only a small market for bagged deer corn to sell at a local farm store or sweet corn at a farmers market. The scaling discussion varies by commodity and value-added product, which is essential for any programs targeting value-added product ventures.

There is a need, and we have the capacity to support it.

Demand

Demand for value-added products (i.e., freezer beef, deer corn, etc.) varies. This is a challenge as agricultural products are often perishable commodities. Varying demand can cause significant profitability issues for business owners if the equipment or startup costs are considerable or storage facilities are unavailable.

Storage

Additional storage—both cooled and uncooled—is necessary to scale up, so depending on which commodities are targeted, additional storage capabilities must be a priority. The storage increases should be commodity appropriate and geographically proximate to an available workforce and commodity production.

Additional food and agricultural processing and manufacturing in Alabama will be an economic benefit to Alabama and to Alabama’s agricultural community if the agricultural products are produced in the state. Focus groups had various commodity-specific suggestions but were cautioned overall about needs regarding demand, storage, and scaling as programs for economic development related to food and agricultural processing and manufacturing projects are targeted.

Creative Aggregation Ventures

Focus group participants stated that producing an agricultural commodity is often not the problem. The issues are storage, processing, labor, transportation, and seasonal demand. To help alleviate some of these issues, participants suggested that investments in creative aggregation ventures would help the producer, processor, and consumer. Reducing waste (catfish that are not processable, vegetables that have no market before harvest, etc.) and upscaling would benefit all. Examples of suggestive creative aggregation venture investments include the following:

Food Hubs or Aggregation Sites Built Around Existing Local Food-Related Programs

Participants discussed a desire to work more with local food programs, such as farm-to-school, that keep their commodities—specifically, nuts, fruits, fish, and vegetables—in their local communities. However, focus group members noted that transportation and delivery times are key problems for producers as customers, such as schools, usually want deliveries only during certain morning hours. Additionally, distribution to larger networks of schools is too difficult for one farmer to manage alone. One producer in a focus group stated that he partners with his neighbor to deliver to nearly 90 schools nearby. He said this endeavor is only possible due to local partnerships. Participants identified food hubs as a potential way to aggregate agricultural products for local schools and markets.

Additional Value-Added Ventures

Value-added ventures allow producers to diversify farm incomes and potentially increase their revenue. Agribusiness companies move into value-added ventures to produce products in response to consumer demands. Focus group participants identified the valueadded sector as a key place for economic development. However, that is with some important caveats:

“Oh, it would be a lot easier to get it moved!”

Foster Cooperative Growth and Copacking Facilities

To support the value-added industry, participants suggested having aggregation sites for various commodities currently without a strong network of co-ops within the state. These aggregation desires usually include cold storage needs. Copacking facilities were also identified by focus groups as needed for new value-added ventures.

Agricultural Waste Focus

Agricultural waste is also an area where aggregation could exist, especially rendering and further processing in the poultry industry. Participants expect the need for waste aggregation to increase as freezer storage for poultry carcasses is expected to decrease.

Aggregating for local food network development and cooperatives and handling agricultural waste are important to Alabama agricultural industry workers and farmers. One participant in Focus Group VII said that “It would be a lot easier to get it moved” if there were aggregation locations for various commodities. Focus group participants suggested that creative, targeted incentive programs could help further aggregation sites.

Agricultural Workforce Development Programs

Focus groups emphasized a strong need for agricultural workforce development programs at the high school and community college levels. Whereas there might be related existing programs, agricultural workforce programs are often missing. For example, there are currently heavy equipment training programs, but none specialize in agriculture-specific heavy equipment. While there are existing programs spread in various places across the state, focus group participants specified that there is a need for the following:

Vocational Programs in High Schools

Focus group members stressed the likelihood of youth from underserved rural communities benefiting greatly from programs that provide vocational skills for future agriculture or agricultural manufacturing or processing careers.

There’s heavy equipment, but no ag heavy equipment programs.

Credentialing and Skilled Labor Workforce Development Programs in Community Colleges

Participants emphasized that existing programs should be expanded, and a broader focus should be placed on preparing young adults for careers in the agriculture sector.

If Alabama secures additional food and agricultural manufacturing and processing in the future, the demand for skilled agricultural labor will increase. Focus group participants said that these programs take time to build and execute. Hence, any economic development initiatives should have corresponding high school and higher education workforce development programs to support them.

Additional Innovative Funding

Focus groups discussed existing native agricultural funding currently available in Alabama. Additionally, they talked about several programs from other states that set aside funding for agriculture-related initiatives both for farmers and producers as well as agribusinesses, processors, and food manufacturers that are not widely available in Alabama. One farmer in Focus Group V, when discussing programs in Tennessee and South Carolina, said, “It’s made an impact on their states and their farmers,” and added, “We got to work with our farmers and make what works for them” here in Alabama.

“It’s made an impact on their states and their farmers.”

The funding sources that participants envision would be legislatively appropriated to support programs such as local foods, farm-to-school, conservation, and farmland preservation. Examples discussed include the Tennessee Ag Enhancement Program, South Carolina’s Agri-Business Center for Research and Entrepreneurship, Michigan’s $0.10 a Meal Program, and more. Focus group participants argued that Alabama should note the benefits of these programs and aim to create similar innovative funding programs or expand our existing funding programs to allow for greater use and capacity building.

Conclusion

Alabama’s opportunities for agricultural economic development are as diverse as the myriad of crops grown within the state. Thus, Alabama has no single defined road map for economic development. Instead, multiple connected potential pathways intersect at different vantage points within the industry. Focus group participants aspire to see growth in further processing of Alabama-grown agricultural products within the state through new and expanded food and agricultural manufacturing and processing. Participants also highlighted their desires for more value-added ventures, additional expanded novel funding incentive and opportunity programs, and workforce development initiatives. These opportunities, though, must be viewed through the lens of existing challenges for the industry related to profitability, farmland conversion, and infrastructure challenges, among other things. The future of Alabama agriculture is exciting as farmers and those in agricultural industries are resilient, adaptive, and pioneering, and the industry is ripe for investment in economic development.

 

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Kelli Russell, Assistant Extension Professor, Agricultural Economics and Rural Sociology, Auburn University, and Mykel Taylor, Professor, ALFA Eminent Scholar, Agricultural Economics and Rural Sociology, Auburn University

New April 2025, Ag in Alabama: Opportunities & Challenges for Economic Development, ANR-3131