On Friday, November 4, USDA’s Economic Research Service released a report entitled “Direct and Intermediated Marketing of Local Foods in the United States” that assesses the relative scale of local food marketing channels throughout the country.  This report provides new information on marketing channels based on the 2008 Agricultural Resource Management Survey (ARMS).

The research presented in the report documents that sales through intermediated marketing channels, such as farmers’ sales to local grocers and restaurants, account for a large portion of all local food sales.  Small farms (under $250,000 gross sales) dominate local foods sales marketed exclusively through direct-to-consumer channels such as farmers markets and roadside stands, while mid-scale and larger farms dominate local food sales marketed exclusively through intermediated channels.

The Northeast and West Coast, along with areas in other regions near densely populated urban markets, are the  regions with the largest number of farmers marketing food locally and where the value of local food is highest.  The research points out that higher levels of direct-to-consumer sales are found to be associated with climate and topography favoring the production of fruits and vegetables, proximity to and neighboring farm participation in farmers’ markets, and good access to transportation and information networks.

Several of the most striking findings cited in the report include:

• Marketing of local foods, via both direct-to-consumer and intermediated channels, grossed $4.8 billion in 2008—about four times higher than estimates based solely on direct-to-consumer sales.
• Small farms (less than $250,000 in gross annual sales) accounted for 95 percent of all farms reporting local food sales, but small farms accounted for 30 percent of total local food sales and medium-sized and larger farms accounted for 70 percent.
• Mid-scale and larger farms accounted for 92 percent of the value of local food sales marketed exclusively through intermediated channels.
• By marketing outlet, farmers markets and roadside stands each account for 32 percent of all outlets used by local food producers, followed by sales to stores and restaurants (19 percent), onfarm stores (10 percent), regional distributors (6 percent), and CSAs (1 percent); farmers report an average of 1.5 outlets used per farm.
• Vegetables, fruits, and nuts, dominated local food sales, accounting for 70 percent of the total. Vegetable, fruit, and nut farms are eight times more likely to sell crops locally than other farms, with 40 percent of all vegetable, fruit and nut farms selling some product through local food channels.
• The three West Coast states account for 56 percent of total national specialty crop sales, but also account for 31 percent of total local specialty crop sales.
• Almost two-thirds of all local food producers reported that local food sales accounted for at least 75 percent of their total gross farm sales.  Higher local food sales shares suggest that local food sales farms are well integrated into existing direct-to-consumer and intermediated supply chains.
• Primary operators of local food sales farms are 30 percent more likely to list their primary occupation as farming than farmers who do not market their food locally.  Operators devoted more work hours to production that those not engaged in local food marketing.

Overall, marketing of local food via intermediate channels is a topic that has not been extensively studied in the past, and this report takes a first stab at creating a more complete picture of local food markets and producers.