Economic Impacts of Local Foods

According to a two-year evaluation from the Leopold Center for Sustainable Agriculture, Iowa’s local food economy is growing vigorously. Sales of local food to grocery stores, restaurants, residential food service operations, food hubs, food auctions and other high-volume markets rose from $8.9 million in 2012 to $13.1 million in 2013, for a total of more than $22 million over the two-year period. The report cites data showing that these larger markets are rapidly eclipsing direct-to-consumer sales at farmers markets and from Community Supported Agriculture (CSAs).

All this activity spells good economic news for rural communities and farm-based businesses in Iowa, including the creation of 171 new jobs in 2012 and 2013.

The findings are part of an evaluation of the Regional Food Systems Working Group (RFSWG), a statewide network that connects Iowa’s growing number of local food coordinators. For the second consecutive year, the coordinators recruited local food producers and buyers from their respective regions to complete a survey that measured four indicators of economic change:
– Local food sales by farmers, including directly to consumers and to institutions and other markets,
– Local food purchases by grocery stores, restaurants and buyers for institutions and other high-volume markets,
– Job creation as a result of local food production, processing or utilization, and
– Funds leveraged by RFSWG groups.

Find this report and more information on the RFSWG economic impacts in ISU’s Digital Repository, in the Leopold Center collection.

Also see the Union of Concerned Scientists’ policy brief, Growing Economies: Connecting Local Farmers and Large-Scale Food Buyers to Create Jobs and Revitalize America’s Heartland (2016).

Resources

USDA’s Agricultural Marketing Service (AMS) released a 2016 report titled The Economics of Local Food: A Toolkit to Guide Community Discussions, Assessments and Choices. The Toolkit is made up of seven modules that can be grouped into two stages of food system planning, assessment, and evaluation. The first set of modules (1-4) guides the preliminary stages of an impact assessment and includes framing the system, relevant economic activities and assessment process as well as collecting and analyzing relevant primary and secondary data. For those seeking a more robust economic impact assessment, the second set of modules (5-7) provides a more technical set of practices and discussion of how to use the information collected in stage one to conduct a more rigorous analysis.

USDA Economic Research Service (ERS) 2015 Congressional report, Trends in US Local and Regional Food Systems, shows the recent growth in the local food industry:  Farmers markets have grown by 180 percent since 2006, regional food hubs have grown by 288 percent since 2006-2007, and school district participation in farm to school programs has increased by 430 percent since 2006.

Michigan State University’s Center for Regional Food Systems, with the participation of the Union for Concerned Scientists, convened a two-day meeting of economists and local food researchers from across the country.  Participants examined how economic analyses of local and regional food systems are currently conducted and considerations for future studies. Here are some of the resources resulting from this meeting: http://foodsystems.msu.edu/activity/info/economic_impact_analysis_of_local_and_regional_food_systems 

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