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Is $5.5M enough for a material impact? My reference point is the fact that setting up a single new farming operation that is profitable, can set you back by mil

Is $5.5M enough for a material impact? My reference point is the fact that setting up a single new farming operation that is profitable, can set you back by millions.

deleted 2y ago
[deleted]
mooreds 2y ago
The focus is on co-packing and other food processing facilities. > Using RFSI funding, the Tennessee Department of Agriculture will fund projects that increase access to commercial kitchens and co-packing facilities. Additional funded projects will expand processing capacity, including adding product types, increasing production volumes, and supporting new wholesale/retail product lines. The state’s priorities are informed by stakeholder engagement and outreach to underserved producers to better understand their needs. Looks like it costs 15k-250k to set up a commercial kitchen: https://www.kitchenall.com/blog/commercial-kitchen-cost.html https://www.kitchenall.com/blog/commercial-kitchen-cost.html A new product line is 85k-175k: https://www.foodresearchlab.com/blog/new-food-product-development/what-is-the-cost-of-developing-a-new-product/ https://www.foodresearchlab.com/blog/new-food-product-develo... I imagine they are doing grants that cover part of the costs not the whole thing. If they covered 50% of the cost and each project cost 100k, that would mean 110 projects, which is a lot in one state. I see 22 commercial kitchens in TN currently: https://www.thekitchendoor.com/kitchen-rental/states/tennessee https://www.thekitchendoor.com/kitchen-rental/states/tenness... so if half of the projects were commercial kitchens, that would be a 250% increase.
- darth_avocado 2y ago
  Ahh interesting. I think I kind of expected the grant to only partially cover costs for any project. But it is very surprising to see the costs of setting up a commercial kitchen to be so low.
- kreims 2y ago
  I’m more familiar with transportation grants than food grants, but I would imagine you write a proposal and get matching funds up to a certain ceiling, like 80-20 state-private up to $250,000, hypothetically. The costs on those blogs seem to refer to just furnishing equipment in a ready commercial space, though. If you’re having to develop a new site and incur construction costs, I could easily see spending $5M on a single site. I’d think this is going to help producers upgrade or replace some existing equipment. Probably a good thing. $5.5M more than the market had, right? I do wonder if there is some low hanging fruit on more efficiently connecting different stages of food production. Like a traveling salesman problem with getting food producers to packing.
- quickthrowman 2y ago
  > Looks like it costs 15k-250k to set up a commercial kitchen That 15k is a bit of a misnomer, a vent hood plus fire suppression is going to be $20k+ installed (or more depending on how much ductwork is needed).

Is $5.5M enough for a material impact? My reference point is the fact that setting up a single new farming operation that is profitable, can set you back by millions.

deleted 2y ago

[deleted]

mooreds 2y ago

The focus is on co-packing and other food processing facilities. > Using RFSI funding, the Tennessee Department of Agriculture will fund projects that increase access to commercial kitchens and co-packing facilities. Additional funded projects will expand processing capacity, including adding product types, increasing production volumes, and supporting new wholesale/retail product lines. The state’s priorities are informed by stakeholder engagement and outreach to underserved producers to better understand their needs. Looks like it costs 15k-250k to set up a commercial kitchen: https://www.kitchenall.com/blog/commercial-kitchen-cost.html https://www.kitchenall.com/blog/commercial-kitchen-cost.html A new product line is 85k-175k: https://www.foodresearchlab.com/blog/new-food-product-development/what-is-the-cost-of-developing-a-new-product/ https://www.foodresearchlab.com/blog/new-food-product-develo... I imagine they are doing grants that cover part of the costs not the whole thing. If they covered 50% of the cost and each project cost 100k, that would mean 110 projects, which is a lot in one state. I see 22 commercial kitchens in TN currently: https://www.thekitchendoor.com/kitchen-rental/states/tennessee https://www.thekitchendoor.com/kitchen-rental/states/tenness... so if half of the projects were commercial kitchens, that would be a 250% increase.

darth_avocado 2y ago
Ahh interesting. I think I kind of expected the grant to only partially cover costs for any project. But it is very surprising to see the costs of setting up a commercial kitchen to be so low.
kreims 2y ago
I’m more familiar with transportation grants than food grants, but I would imagine you write a proposal and get matching funds up to a certain ceiling, like 80-20 state-private up to $250,000, hypothetically. The costs on those blogs seem to refer to just furnishing equipment in a ready commercial space, though. If you’re having to develop a new site and incur construction costs, I could easily see spending $5M on a single site. I’d think this is going to help producers upgrade or replace some existing equipment. Probably a good thing. $5.5M more than the market had, right? I do wonder if there is some low hanging fruit on more efficiently connecting different stages of food production. Like a traveling salesman problem with getting food producers to packing.
quickthrowman 2y ago
> Looks like it costs 15k-250k to set up a commercial kitchen That 15k is a bit of a misnomer, a vent hood plus fire suppression is going to be $20k+ installed (or more depending on how much ductwork is needed).