Making and Selling Value Add Products

With much emphasis on local products, this is a great time to venture into the value added business with delicious artisan foods and products that build on your family’s legacy!

USDA's Value-added Ag Definition:

  • A change in the physical state or form of the product (such as milling wheat into flour or making strawberries into jam).
  • The production of a product in a manner that enhances its value, as demonstrated through a business plan (such as organically produced products).
  • The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product (such as an identity preserved marketing system).

As a result of the change in physical state or the manner in which the agricultural commodity or product is produced and segregated, the customer base for the commodity or product is expanded and a greater portion of revenue derived from the marketing, processing or physical segregation is made available to the producer of the commodity or product. USDA Ag Marketing Resource Center

Permits

Operations that process and/or allow the tasting of food products will require health permits. Depending upon the type of inputs you are using and products you are making, the operation could be subject to more than one regulatory agency.

For details about products you want to make, see product specific pages above.

Zoning and Use Permits

If you plan do do ag processing on your farm or ranch, you will need to obtain a zoning or use permit depending on the type of processing and size of the facility. This permit is issued by Permit Sonoma.

  • Zoning permit is required for operations that meet zoning, size and product requirements. 
  • Use permit is required for operations that fall outside of the small-scale ag processing definition.
  • For details, see Ag Processing on the Farm

Building

Nearly all buildings will require some sort of permit (there are exemptions). Anything from building to plumbing to electrical to remodels will most likely require a permit. Work on septic and well also require permits.
Permit Sonoma links:

Selling Permit

Required for selling products in California from the State Board of Equalization. Register for a Sellers Permit online.

Food Safety

Foods processing regulated by CDFA may not require a HACCP plan (in most cases) however you will still need to have food safety protocols in place.

Foods processing regulated by CDPH will require compliance with Food Safety Modernization Act.

Insurance & Legal

Make sure you and your business are covered for these activities. Farm Liability Insurance policies generally only cover farming activities (ag processing may not be considered a farming activity). You may need a Commercial General Liability coverage. Talk to your agent. View webinar Adding Value to Farm Products: Getting the Legal Ducks in a Row (requires sign-in) by Farm Commons to learn about insurance, employment laws, liability potential, and tax factors.

Getting Started

So you have a killer recipe for juices and extracts that you can make with fruit from your orchard and you want to create a new enterprise on the farm, where do you get started? Here are some suggestions:

Additional suggestions:

  • Create a business plan looking ahead at least 5 years – this will be helpful with the permit process and financing
  • Visit Permit Sonoma to discuss your plans with their Planning Desk
  • Contact the Agriculture Ombudsman: klgiov@ucanr.edu 565-2328