January 11, 2017
The term “local food” means many things to many people. For some it defines a particular geographic area, while for others it means good, high quality food. A recent survey published by the U.S. Department of Agriculture’s (USDA) National Agriculture Statistics Service (NASS) reveals that, varying conceptions aside, the local food market has matured into an economic driver for farmers and rural communities nationwide.
The “Local Food Marketing Practices Survey” is the first ever survey conducted by NASS, in partnership with USDA’s Know Your Farmer, Know Your Food initiative, that provides benchmark data on local food marketing practices. NSAC worked closely with our allies in Congress to secure authorization for this survey as part of the 2014 Farm Bill’s Local Food Production and Program Evaluation Initiative. The Initiative was one of many provisions of the Local Farms, Food and Jobs Act bill, which Senator Sherrod Brown (D-OH) and Representative Chellie Pingree (D-ME) and their many co-sponsors helped secure in the last farm bill cycle.
A Mature Market
Some critics of the local food sector characterize the industry as being small, niche, and disconnected with the production agriculture sector. Others generalize that interest is limited to beginning, urban, and “hobby” farmers. The results of the Local Food Marketing Practices Survey, however, paint a much different picture.
The survey, which includes information on both fresh and value-added foods such as meat and cheese, reveals that in 2015 over 167,000 U.S. farms produced and sold food locally through food hubs and other intermediaries, direct farmer-to-consumer marketing, or direct farm to retail. These sales resulted in $8.7 billion in revenue for local producers.
To appreciate how truly robust this level of direct local food sales is, we can compare these figures with those of another agricultural sector that, though now well-established as an economic powerhouse, previously had to fight against the “niche” label – the organic industry. In 2015 direct, or “first point of sale”, organic revenues were $6.2 billion. This figure provides a strong signal that the local food sector is and will be a significant market and source of revenue for farmers going forward.
According to the 2012 Census of Agriculture, the total market value of all agricultural products sold in 2012 was $394.6 billion. Local and regional direct food sales represented roughly two percent of the total value of agricultural products at the time of the survey. Subtracting out agricultural sales of products not consumed directly by humans (e.g., animal feed, tobacco, trees, cotton, etc.), local food’s percentage of total direct sales grows to about 3.5 percent.
According to a report by the Farm Credit Council using data from the 2012 Census of Agriculture, “if “direct-to-consumer” (a sub-sector of the larger local food market) were a commodity (e.g., cattle or grains), it would be the 4th largest commodity as measured by the number of farms engaged in the practice.” Direct-to-consumer sales is only one portion (one third of the total market value captured by the NASS survey) of the larger local food market, however. Given the industry’s strong sales record and steadily increasing consumer demand, the significance of this sector to the agricultural economy can no longer be denied.
But what about the farmers? Could hobby farmers really be producing $8.7 billion worth of agricultural products? The short answer is – no. According to the NASS survey, 77 percent of farmers who used direct marketing to sell their products were established farmers, having farmed 10 or more years, with the balance representing beginning farmers. These seasoned and newer producers are the backbone of the local food industry and their rural communities. They are helping to drive the shift toward more healthy, local, and seasonal foods.
The Details Behind the Data
Recognizing that past Census of Agriculture surveys were missing key components of the local and regional food economy, the Local Food Marketing Practices Survey was developed in order to create a baseline for the local and regional food economy. This information, in turn, would help producers, businesses, and policymakers make better decisions about investments in the sector.
While the nature of the survey makes it somewhat difficult to draw broad conclusions about future growth in the sector, we can make some sound projections by examining the data on the value of agricultural products sold directly to individuals for human consumption. According to the 2007 Census of Agriculture, the value of agricultural products sold directly to individuals for human consumption was $1.2 billion; according to the 2012 Census the total had only risen slightly over five years, to $1.3 billion. The NASS Local Food Survey, however, shows a significant jump taking place just two years later. According to their data, the direct-to-consumer market had grown by $1.7 billion (a total of $3 billion in revenue) from 2012 to 2015.
This dramatic increase in revenue reflects the growing consumer interest in local and regional foods and in direct-marketing outlets such as farmers markets and community supported agriculture programs. Although we cannot use changes in direct-to-consumer sales as a perfect proxy for the trajectory of the larger local food industry, the data do clearly indicate that the market is growing.
This growth has been due in part by the efforts of the USDA to promote local and regional food systems, as well as by policies and programs championed by the National Sustainable Agriculture Coalition (NSAC), including: the Value Added Producer Grant program, Farmers Market and Local Food Promotion Program, Local and Regional Food Enterprise Guaranteed Loans, Farm to School grant program, and the Beginning Farmer and Rancher Development Program.
Local Food and the 2018 Farm Bill
The current Farm Bill is set to expire at the end of September 2018. Throughout 2017 and 2018, the Senate and House Agriculture Committees will be undergoing the complex and difficult work of writing the next farm bill. As Congress, the new administration, and farm and advocacy groups begin these discussions, the importance of the local food sector of the agriculture economy should not be underestimated.
The 2014 Farm Bill included historic investments in the local and regional food sector that have undoubtedly helped, along with growing consumer interest and demand in all things food and agriculture, to drive growth within that sector. NSAC urges Congress and the new Administration to continue building on the successes of 2014 and driving growth in this sector and in rural America. We look forward to working with policy makers and our members and partners to ensure the continued development and prosperity of this important market and movement.