Small farms across South Dakota are capitalizing on rising consumer demand for locally grown food by building diversified operations that combine produce sales with agritourism, specialty events, and direct-to-consumer marketing — even as the state’s count of USDA-certified organic producers has dropped sharply since 2022.
At Bear Butte Gardens, an 80-acre certified organic farm outside Sturgis, co-owners Michelle and Rick Grosek have pursued a deliberate strategy of revenue diversification since the farm began operating in 2010.
“We’re going strong, but we do a lot of diverse things with our products so we don’t have all our eggs in one basket, so to speak,” Michelle Grosek said.
The Groseks sell produce and home-cooked foods to local grocers and restaurants, offer farm tours for adults and children, and hold cooking and gardening classes along with specialty dining events including a five-course mushroom dinner. They also host community festivals — including a woolen fiber festival and a winter holiday event — and welcome overnight guests through an Airbnb-style rental home on the property. The couple is also training to become USDA organic farm inspectors.
Michelle Grosek said 2025 was a slower year for sales, which she attributed to a weak national economy and reduced tourism, particularly from Canada.
Certification numbers falling as demand rises
Despite the slowdown at Bear Butte Gardens, the broader demand for locally grown vegetables and meats continues to increase in South Dakota, said Angela Jackson, an organic transition advisor with the South Dakota Specialty Producers Association who also operates PrairieSun Organics, a certified farm near Vermillion.
“The demand for these products is going up for sure,” Jackson said. “We have a lot of young families especially who are seeking these products.”
South Dakota ranks in the bottom third of states nationally for USDA-certified organic farms and livestock operations, Jackson said. The number of certified producers fell from 124 in 2022 to 87 as of December 2025. USDA data show the state generated $14 million in organic goods sales in 2022, the last year for which the agency published a national agricultural survey.
Jackson said some producers have allowed certifications to lapse because the process grew too expensive. Farmers told South Dakota News Watch the regulatory burden made certification not worth the effort.
“Going from farm to fork is very challenging,” Jackson said.
Jackson said farms focused on local production keep agricultural revenues circulating within the state rather than flowing to out-of-state processors — a dynamic she described as improving net profitability for producers.
“We grow and process foods on the farm and package it for direct sale to the consumer, and there’s value in not losing that money to an out-of-state processor,” she said.
Geography adds to supply chain difficulty
Blake Pulse, a researcher and doctoral candidate at South Dakota State University in Brookings, said the state’s low population density and geographic spread create structural challenges for small producers trying to reach consumers.
“When you think about South Dakota agriculture, it’s the corn, the soybeans and the cattle, and not necessarily tomatoes and carrots and other fresh fruits and vegetables,” Pulse said. “Buying South Dakota-grown products requires more labor on the consumer’s part because we haven’t reached the institutional and grocery store level for those goods yet.”
Pulse said food hubs — cooperative arrangements in which producers pool efforts to reach larger markets through small stores, farm stands, or restaurants — represent a promising development in addressing that gap.
Poultry operation posts back-to-back growth
The supply-chain obstacles have not dampened growth at Odessa Farms, a small organic chicken operation in Butte County owned by Meghan and Joe Volk of Nisland. The farm has doubled production in each of the past few years.
The Volks will raise and process about 5,500 meat chickens this year, selling to restaurants, individual consumers, and a small number of local organic grocery stores. Their birds arrive from North Dakota as chicks in May and July and spend their days free-ranging on grass while being fed organic grain, growing for several additional weeks beyond conventional commercial timelines.
“There’s a market out there of people who want their food grown locally and humanely, and a big part of our farm is that we want our animals to live the absolute best life they can,” Meghan Volk said. “We don’t compete with Walmart or any big box stores on quantity, but they can’t compete with us for quality.”
Jackson said local producers also protect the environment and provide an economic boost to rural communities not achieved when produce is imported from other states and countries.