The economic facts about farmers’ markets: Freshness and high quality don’t cost more

Daffodils are blooming here in the Northeast. That’s the surest sign that opening day for our local farmers’ markets is not far off.

That’s a day that can’t come soon enough for this dedicated vegetarian. As the winter months dragged on, the longing for the taste of fresh, locally harvested produce became almost unbearable. By March, I decided that I had to stop wasting my food dollars and put an end to purchasing the over-priced, tired organic vegetables on the shelves of my local supermarket. Don’t get me wrong: from October to February, who wouldn’t be grateful to California growers for keeping a steady stream of fruits and veggies coming our chilly way? But the taste of that produce, having traveled nearly three thousand miles in refrigerated trucks cross-country, cannot compare to the taste of the local, seasonal selection less than one mile away that’s harvested the day before it’s dumped into the sink, rinsed off, and chopped up for salads.

I’ll admit it. I’m a die-hard supporter of farmers’ markets and the superior tasting organic produce that graces our tables during the blissful six months of the growing season here in the Hudson Valley.

Superior taste, however, is just one reason to buy local. Hard-core economics is another. If data and facts hold even the slightest influence over your purchasing decisions, then the reason for buying local adds up to a lot more than just culinary pleasure, symbolic idealism, or what some may derisively call the starry-eyed sloganeering of the buy-local movement. The truth is that the economics of buying local hits communities right where it counts—in the wallet. And the economic advantage of buying local applies equally to both farmers’ markets and the independently owned businesses in our communities.

The facts are, indeed, on the side of the buy-local campaigners. Here are just a few:

• Strengthening a community’s economic base. Buying from independent, locally owned businesses and farmers creates a ripple effect. As money flows into local businesses and farms, that money is spent making purchases from other local businesses, farms, and service providers who create and retain local jobs.
• Preserving the uniqueness of communities. Supporting local businesses and farmers (who are, after all, stewards of open land as well as food producers) helps retain the unique character of a community, which leads to increased tourism dollars, which leads to higher sales-tax revenues.
• Job creation. On the national level, surprising as it may seem, in the aggregate small, locally owned businesses and food producers are the largest employers—not the giant corporations.
• Saving tax dollars. Local businesses located in town centers require less investment in expensive infrastructure improvements and make more efficient use of local tax dollars than nationally owned companies that locate on the periphery and often are the recipients of incentivizing property-tax deferments.
• Encouraging local prosperity. One study after another demonstrates that entrepreneurs and skilled workers invest and settle in communities that preserve their unique character and retain one-of-a-kind businesses, farms, and landscapes.
• Reducing environmental impact. Local businesses tend to cluster in town and city centers. This clustering effect reduces the quantity of fossil fuels used by consumers who would otherwise drive to businesses located in outlying locations. The same holds true for farms, as transportation of foodstuffs to farmers’ markets by local farmers burns far less fossil fuels than produce shipped cross-country by industrial farms.

All of the above make a compelling argument for Americans to reconsider where they spend their dollars—particularly their food dollars.

But is that shift happening? The answer is “yes” and “no.” In terms of farmers’ markets, the public’s perception of the personal and economic benefits of buying local, as well as a growing discomfort with industrial food-production practices, is starting to have an impact across the country. The USDA has been tracking the numbers, which show an extraordinary increase in farmers’ markets located in communities large and small. From 1994 to 2013 the total grew from 1,755 to 8,144. Although these numbers reflect significant growth, the fact is that the majority of consumers don’t shop at their local markets. In fact, just 0.2% of overall food dollars is spent nationally at farmers’ markets.

There are many explanations for that low number. Among them are the lack of easy access, particularly a problem in low-income communities, and the perceived convenience and habit of one-stop shopping. Another explanation is the reliance of the American diet on boxed, frozen, or ready-made foods. But, above all, there’s the problem of price perception, which acts as an obstacle to greater market participation.

The belief that foodstuffs at farmers’ markets are overly expensive continues to challenge market boosters. Data on price comparisons between non-local supermarket fare and local offerings at farmers’ markets is difficult to come by. The number of formal studies is limited. One of the most comprehensive to date was conducted in 2009 by the Leopold Center for Sustainable Agriculture of Iowa State University. The study compared pricing of a “market-basket” of typical local and non-local conventionally grown vegetable items available at peak season at farmers’ markets, small grocery shops, and supermarkets.

The Leopold study concluded that “during peak season, local produce items at farmers’ markets were competitive with the same non-local items found at supermarkets.”

The study also concluded that, based on price data for a family of four, consumers would spend slightly less buying from the farmers’ market during peak season. The Iowa study went on to conclude that the majority of vegetable prices at farmers’ markets during peak season were equal or lower for the same items at groceries and supermarkets, and that for those items that were priced higher at farmers’ markets, the price difference was marginal.

Interestingly, the Iowa study did not compare meat prices because “meats for sale at farmers’ markets typically have additional attributes, such as antibiotic-free or free range, that make it impossible to compare them directly to the conventional meat items sold in supermarkets.”

This observation reflects a broader issue that promoters of farmers’ markets struggle to communicate to consumers when discussing pricing. As one farmer at my local market has said, “Comparing vegetable varieties that are grown on a small scale for the intensity of their flavor with tasteless varieties that are grown primarily to survive the shipping process is like comparing apples to oranges. They’re simply not the same product.”

A more recent study of price comparisons was undertaken in the summer of 2010 by the Northeast Organic Farming Association of Vermont. Unlike the Iowa study, which studied only conventionally grown vegetable items, the Vermont study analyzed price differences between organic and conventionally grown produce at farmers’ markets, co-ops, and supermarkets. The results show that, in Vermont, prices for conventional produce at farmers’ markets were lower than at groceries for 5 out of the 14 vegetable items studied. Nine out of 14 were cheaper at grocery stores. The average price difference between conventional produce at grocery stores and farmers’ markets was 19.8%. On a $3 purchase, that means that, on average, buying conventionally grown, freshly picked local produce at a Vermont farmers’ market would cost approximately 60 cents more than purchasing non-local produce at the grocery store.

The results, when comparing pricing for organics at farmers’ markets with pricing at traditional retail grocery stores, were more definitive. Prices at Vermont’s farmers’ markets were lower for 12 out of 14 organic items. The price difference between organics at farmers’ markets and organics at traditional stores was 38.8%. On a $3 purchase, that means that, on average, buying freshly picked, local organic produce at a Vermont farmers’ market would cost approximately $1.20 less than purchasing non-local organic produce at the grocery store.