Value-added products are raw farm products changed into something worth more: berries into jam, apples into cider, peppers into hot sauce, taro into chips or poi, milk into cheese, wheat into flour. Farms make them to earn more per pound, to sell outside the harvest season, and to use produce that's too small or misshapen to sell fresh. The catch is that processing changes the rules. Under FDA's definitions, a farm can pack, hold, dry and label its own raw crops and stay a farm, but making jam, chips or sauce for sale is manufacturing, which usually means registering with FDA and following the preventive controls rule, often in its lighter version for the smallest businesses. Below is what counts, the numbers on one crop, the rules that change, and the records from field to jar.
The short version
- Value-added means changing a raw farm product into something worth more.
- It earns more per pound, sells off-season, and uses seconds.
- A farm can pack, hold, dry and label its own raw crops without registering with FDA.
- Making jam, chips, sauces or baked goods for sale is manufacturing; the farm usually registers.
- Very small businesses can be qualified facilities under the preventive controls rule.
- Keep records from harvest lot to finished lot to customer.
- TaroStack runs the farm and the kitchen as sites, from harvest lots to jars. More below.
What counts as value-added
| Raw product | Value-added product | What changes |
|---|---|---|
| Berries, guava, citrus | Jam, jelly, syrup | Cooking, sugar, jars |
| Taro | Chips, poi, flour | Cooking, milling, packaging |
| Peppers, tomatoes | Hot sauce, salsa | Acidifying, bottling |
| Apples, grapes | Juice, cider, raisins | Pressing, drying |
| Milk | Cheese, yogurt | Culturing, aging |
| Coffee cherries | Roasted coffee | Milling, roasting, bagging |
| Wheat, corn | Flour, meal | Milling |
| Herbs | Dried herbs, tea blends | Drying, blending |
Some of these stay inside the farm definition and some don't, which is the next section's point.
The numbers on one crop
Windward Roots, the made-up taro business I use in these examples, grows taro. It can sell raw corms to a wholesaler at $2.40 a kilo, or turn them into 5 oz bags of chips that wholesale at $3.41. A kilo of raw taro makes about 2.29 bags, and each bag carries about $1.05 of oil, pouch, labor and overhead on top of the taro.
| Per 100 kg of harvest | Sold raw | Made into chips |
|---|---|---|
| Sales | $240.00 | 228.9 bags × $3.41 = $780.55 |
| Costs beyond the taro itself | $0.00 | 228.9 bags × $1.05 = $240.35 |
| Left for the taro and the farm | $240.00 | $540.20 |
Processing more than doubles what each kilo earns, and it can turn seconds worth little raw into the same chips. It also adds a kitchen, a license, packaging, labor and selling, which is why the per-kilo gain has to be worth the work. How the chip's full cost is built is in packaging cost per unit, and how much a kitchen can make in a week in how to calculate production capacity.
The rules that change when you process
FDA's farm definition covers growing and harvesting, plus packing or holding raw agricultural commodities, and a short list of processing: drying or dehydrating a raw commodity into a distinct one (grapes into raisins), treating produce to manage ripening, and packaging and labeling raw commodities, as long as there's no further processing such as slicing (21 CFR 1.227). Farms don't register with FDA (21 CFR 1.225 and 1.226).
Making chips, jam, sauce or baked goods for sale goes beyond that. A farm that does both is what FDA calls a farm mixed-type facility: a farm that also does activities requiring registration (21 CFR 1.227). It registers, unless another exemption applies (for example, selling mostly direct to consumers as a retail food establishment), and the preventive controls rule applies. A very small business, with under $1 million of human food sales a year, averaged over three years and adjusted for inflation, can be a qualified facility, filing attestations instead of a full food safety plan (21 CFR 117.3). The full picture is in FSMA requirements for small food businesses.
On top of FDA: your state's food manufacturing license, a cottage food law that may cover some products made at home, USDA if meat or poultry is involved, and the specific rules for acidified foods, juice or dairy. This is general information, not legal advice; your state department of agriculture is the place to start.
Records from field to jar
| Stage | Record |
|---|---|
| Harvest | Block or field, date, quantity, a harvest lot code |
| Processing | Which harvest lots went into which batch, and the other ingredients' lots |
| Finished goods | The batch's lot code and best-by date on every package |
| Sales | Which lots went to which customers |
That chain is what answers a buyer's question or a recall, and it's what your batch records rest on. How lot codes work is in how to create lot numbers.
Where this stops working
A farm's records are usually built for the field: harvest weights in a notebook, sales in a spreadsheet. Processing adds a second world: ingredients bought in, batches, jars, labels, lots, and customers who expect a lot code. Keeping the two in separate notebooks means the harvest lot never meets the jar it went into, the cost of a jar is a guess, and the seconds that went into chips are counted nowhere.
How TaroStack does it
TaroStack runs the farm and the kitchen as one chain, from the harvest lot to the customer.
The farm and the kitchen are sites. A farm, a kitchen, a shop and a market stall are each sites, with stock kept per site, and moving the harvest to the kitchen is a transfer, with stock in transit until it lands. Each harvest goes into stock as a lot with its own code and dates.
Batches use harvest lots. A recipe holds the taro, oil, salt and pouches. Record a batch and TaroStack takes the taro from the harvest lot you used, and the other ingredients from theirs, notes them in the batch record automatically, and gives the chips their own lot code and best-by date. The batch is costed from what it used, divided by what came out good, and margins are reported per product, so you can see what the chips really earn against selling raw.
What to make from what you've got. "What could I make right now" answers from what's on your shelves, harvest included, and planning turns orders and your own sales history into what to make and buy, shelf-life aware. Oldest dates go first everywhere stock is picked.
And the chain answers questions. One report shows which harvest and ingredient lots went into which batches, which customers got them and what's still on your shelves, with contact details. Shops are customers with their own orders and delivery notes, and TaroStack connects to your Shopify store.
| The job | Field notebook and sales sheet | In TaroStack |
|---|---|---|
| Harvest to kitchen | Remembered | A transfer between sites, by lot |
| Which harvest is in this bag? | Unknown | The lot, from the batch record |
| Chips against raw | A rough guess | Margins per product, on actual cost |
| A buyer's question | A search | One report, harvest to customer |
Lots and recalls are on every plan, from $49 a month; recipes, batches, planning and more than one site, like a farm and a kitchen, are on Standard at $99. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.