MASBDA Grants
The Missouri Agricultural Small Business Development Authority offers 14 grants to farmers and agriculture businesses, and these grants have helped farmers keep the farm in the family. The state provides the most comprehensive support for farmers of any other state I have researched. Since 2000, I have helped farmers apply for and obtain Missouri Value-Added Agriculture Grants, among others. These grants provide up to $200,000.00 to plan diversification, expansion, and new agriculture-based business concepts. They pay for feasibility studies, marketing studies, business plans, legal assistance, operational consulting, technical consulting, food-safety certification, and prospectus development for cooperatives. The grant requires a 10-percent cash match by the farmer, based on the amount of money requested. The total $200,000 can, and often is, spread over more than one project or part of a project. The MASBDA grants are so worthwhile, I am telling you about them now so you can be prepared to apply in the fall of 2023.
Two important grants, the Value-Added Grant and the Farm-to-Table Grant are on hold for 2023, while MASBDA reviews and updates the program guidelines, following the exciting and long-awaited decision by the State of Missouri to renew this program over the next six years. These two grants are tentatively scheduled to reopen in the fall of 2023. MASBDA grants are paid for through the sale of tax credits, and that is what the State approved (more on this in a future article).
Pecans: A brand is born with a MASBDA Value-Added Grant
The first such project I worked on was in 2000. I discovered this grant and was hired to apply for the Missouri Northern Pecan Growers in Nevada, Mo. This LLC comprised a small group of farmers who all had pecan groves on their land in addition to their other farming operations. They were the first to try to mass-market the small, native pecans that grow in their latitude of the Midwest. “The pecans were washing down the ditches with the rain. We thought we ought to be able to sell them,” said Drew Kimmell, a member at the time. Native pecans are different from large hybrid pecans grown in the South and elsewhere. Testing shows they are higher in monounsaturated fat and sweetness.
The Missouri Northern Pecan Growers received funding through the grant to hire me to perform a feasibility study, marketing study, business plan, and develop branding and packaging design. I was thrilled to be able to provide the research that supported selling their packaged pecans to supermarket produce departments throughout the Midwest in the fall, rather than merely sell them from a small, retail outlet on Interstate 49 near Nevada, Mo.
I interviewed produce department managers to establish the right packaging and price point, and I developed a wood point-of-purchase display that came with $1,200.00 worth of pecans for each store. We had the point-of-purchase displays and signage made at a sheltered workshop located right next door. I developed a “program” or “package,” which was what produce buyers were accustomed to being presented with. We also used a cross-docking strategy, which meant that the produce managers said “yes” to a one-time purchase of our “pecan program.” The product (pecans) for each store chain was sent to its distribution center. Each produce manager signed a purchase order, which I sent to the distribution center. The product was never “slotted” into the warehouse. The cross-docking arrangement meant that the crates of pecans went from our truck to the warehouse loading dock, and from the warehouse loading dock into trucks waiting to take it to stores. Getting an item slotted into a warehouse meant that there would be added cost, and a required guarantee that the product would sell through year-round. We knew our pecans were seasonal (for the holiday season). The in-out scenario worked for everyone. Pecan trees dump at one time of the year, and most of the pecans are purchased by consumers at one time of the year (fall-Christmas).
To prove the idea was feasible, I obtained signed purchase orders for their entire first crop (which was waiting in freezer storage in caves in Kansas City) to more than 100 Hy-Vee supermarkets, Cosentino’s chain in Kansas City, Schnuck’s supermarkets in St. Louis, and another chain in central Missouri.
The crucial distinction:
From my point of view, that’s what feasibility looks like—when you have signed purchase orders. Feasibility isn’t a two-inch-thick report compiling secondary research (from other people’s research). It’s primary research—talking to the buyers and getting commitments. Feasibility isn’t saying that something is feasible IF, a), b), and c) happen. A positive feasibility study states how a project will pay for itself and make money, with proof in the form of commitments.
I’ll talk more about the other 13 MASBDA grants in future blogs, and I look forward to 2024 when the MASBDA grants are all back online. If you’re smart, you’ll need months to prepare a winning proposal. Giving yourself a year to get ready for these and other grants is essential. If you’d like to know more about how I might help you find grants, write grants, and perform the research needed to create a business plan that banks or investors will fund, reach out through my contact page, and we’ll have a chat.