Produce auctions are local aggregation points that facilitate small-scale fruit, flower, and vegetable farmer access to wholesale buyers from a broader geography. Buyers purchase lots from multiple farmers to fulfill wholesale demand, and then retail the product to the consumers. Produce auctions charge a commission, usually 10 to 15% of sales, to the farmer to conduct the mediated marketing transactions. Sales are held multiple times per week to create a consistent supply for buyers and regular market for the farmers.
Buyers make payment to the auction at the end of the sale day, and in turn the auction issues a single weekly payment to individual farmers based on their total combined sales minus commission. With over 70 produce auctions located in eastern North America, including 12 in Ohio, this is a growing trend of intermediated direct agricultural marketing that is beneficial to many farmers. Produce auctions have a positive economic impact on the communities in which they are located, as well as on those who sell and/or buy at the auction.
Produce auctions fill an important niche in Ohio’s produce industry and new ones continue to be formed. For some buyers and sellers, the produce auction is the perfect place to find each other and make their market transaction in a matter that is fair and profitable for both. Produce auctions create another direct agricultural marketing outlet for existing growers and new growers who are producing and marketing high value specialty crops. Produce auctions have become an important piece of economic income for many farm families and it is a part of infrastructure that helps rural areas and communities grow economically.
Brad Bergefurd, an Extension horticulturist and educator at The Ohio State University South Centers, was instrumental in the establishment of the first produce auction in Ohio in 1992 in Geauga County, Ohio, and helped establish the first southern Ohio-based auction, the Bainbridge Produce Auction, in Pike County in 1999. “Produce auctions are both new and old, whatever their age, they offer fresh fruits and vegetables for sale to the highest bidder, and buyers and sellers find each other in a very simple format,” said Bergefurd. “Fruit and vegetable growers can focus their efforts on the production side and get a lot of help on the marketing side by working with a produce auction.”
Bergefurd says, “Ohio produce auctions have been quite successful and are real economic drivers throughout rural Ohio communities, with over $20 million in estimated agricultural sales generated from Ohio’s 12 produce auctions annually. The farmers who sell at auctions are committed and sell regularly, which provides a consistent produce supply throughout the season to attract and helps retain buyers — both important factors in the success of produce auctions.
“Most of the Ohio auctions have order buyers who actually take orders from buyers and buy for them,” Bergefurd said. Auction managers keep in touch with both buyers and sellers, so a lot of information is traded before the auction ever starts.
Most Ohio produce auctions are generally shareholder-owned corporations with mainly the farmers being the shareholders.
The University of Kentucky fact sheet, “Marketing at produce auctions,” http://www.uky.edu/ccd/marketing/market-resources/wholesale/produceauctions
lists the benefits of produce auctions as:
— Set days and times for delivery
— Ability to group produce into various lots
— Ability to test market new products or sizes of produce for wholesale.
“The primary risk in using a produce auction is the price uncertainty,” it says.
The Kentucky publication offers this piece of advice: “Produce quality should be defined by the auction and inferior produce should be rejected, with no exceptions.”
For questions, market reports, or pricing information at the Bainbridge Produce Auction located right here in Pike County, call the market report hotline at (712) 432-8520 for daily produce market reports and special sale days. Currently the Bainbridge Produce Auction is in full swing with sales being held every Monday, Wednesday, and Friday beginning at 2 p.m. Produce can be brought during the mornings of sale days, up until the time of sale.
Anybody can buy or sell at a produce auction; just visit the office window prior to the sale to register for either a buyer or seller number and bring lots of money, as it is easy to get “auction fever” at fast-paced produce auctions. Please be advised, buyers need to carefully read the auction rules and regulations posted on the walls of the auction house prior to bidding. If you intend to only buy a bushel of tomatoes for canning, make sure you are not bidding on a lot that contains 100 bushels of tomatoes; once the auctioneer yells “sold,” you just bought 100 bushels of tomatoes and you are required by law to pay for that lot you just purchased.
For more information on Ohio produce auction marketing, please visit the OSU South Centers web site at southcenters.osu.edu/marketing/place/produce-auctions or call Bergefurd at (740) 289-3727 ext. 136 or (740) 354-7879.