How D’you Make a Local Food System?

Posted on November 22, 2011

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At a recent event, I got chatting to a delightful rancher couple about their Facebook page.  Though they recognized its importance to marketing their grass-finished beef, they’d never actually seen Mills Ranch’s Facebook page and weren’t entirely sure what it was.  “We know it’s on the computer, but our granddaughter takes care of it” they told me.

I thought of them when the USDA released a report on the state of local food systems last week.  Local food systems are basically farmers finding nearby processors and consumers of their products.  It all gets a good deal more complex and crunchy from there, for instance, there’s no real agreement as to what constitutes “local”.  Congress says that it’s 400 miles, others baulk at anything over 100 miles.

For the past decade or so, there’s been a rising movement dedicated to recreating the “local food systems” that some claim were felled by the growth of large scale agriculture and supermarkets (I’d argue that the causes are a good deal more complex).  Proponents include non-profits such as Slow Food, and the movement has taken on a life of its own.  Slow Food, for instance, claims “a network of 100,000 members in 153 countries”.

Previously, we had only vague ideas as to the size and location of these local food systems.  Earlier studies included only ‘direct to consumer’ local food, such as that sold from roadside stalls and farmers’ markets.  This study achieved a market size figure four times higher than prior ones, of $4.8bn, by including food that goes through an intermediary (generally a wholesaler) to restaurants and hotels.  It also confirmed widespread suspicions that Washington, California and the Northeast account for most local food activity; the navy blue areas in the map below indicate areas of high activity.

The report gives us some great insights into the farms that sell locally:

-It’s mostly produce that stays local.  65% of local food sales come from produce, yet the bulk (94%) of US farms are in livestock and large-scale commodity crop production.

Small farms are more likely to sell locally.  Small farms – those with gross sales under $50,000 – accounted for 81% of local food sales farms.  They’re also 30% more likely to be farming as a primary activity than all farms.  This will be great fodder for the campaigners who equate buying local food to supporting “small family farms”.

Local food farmers behave no differently to others.  There’s a perception that local food farmers are somehow younger and more forward thinking than their ‘regular’ brethren, but the study found that they’re about the same average age and are only about 6.5% more likely to use the internet than the average farmer.  This tallied with my experience with Mills Ranch; it’s unlikely that you’d become a farmer because you like tinkering with the internet.  Local farmers have a little more education and begin farming a little later, but it’s only by 2 years in each case.

Local food systems work better in certain regions.  The study found that access to farmers’ markets and farmland, proximity to urban areas and being on the coast determines how much local food activity there is.  That said, it’s hard to tell if this is owing to a paucity of suitable business models in low activity areas, or to the demographics of consumers in the notoriously foodie California, Pacific Northwest and Northeast regions.

Local food sales are good for economic growth.  The study found that produce farms with local food sales employed 13 full time employees per million dollars of sales, compared to only 3 for those not involved in local food sales.  The correlation was highest in locations close to urban areas.  Further, there was some evidence that local food sales farms reach profitability at a lower gross sales point than the average farm.

While the study is more comprehensive than that which has gone before it, I was still left with a number of questions.  What are the demographics of local food consumers?  Are they Moms looking for healthier foods for their kids, or affluent urbanites buying into a ‘locavore’ lifestyle?  Are there business models that would extend local food systems into the vast swathes of the country that currently lack them?  For answers to these questions, we shall sadly have to wait for ag economists to work their magic another day.

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Posted in: Agriculture