Local food advocates promote direct-to-consumer food sales, arguing that these sales yield a variety of positive effects, including that smaller, direct-to-consumer producers have a greater economic impact compared to larger producers selling via wholesale channels.
NOTE: if you want to get started in farming on a small to mid-size scale, here is an online class offered by the UMass Stockbridge School of Agriculture. STOCKSCH 266 – Farm Management Planning and Marketing ONLINE starts on January 22, 2019.
In a new JAFSCD article, Ryan Pesch and Brigid Tuck examine this claim by exploring the relative economic contribution of small-scale, direct-to-consumer vegetable operations versus larger-scale, direct-to-wholesale vegetable operations in Central Minnesota. They detail the methods used to define the project, gather primary data, and construct the two production functions following the methods developed for the Economics of Local Foods Systems Toolkit.
This paper was published in the special issue of JAFSCD, Economics of Local Food Systems: Utilization of USDA AMS Toolkit Principles, co-sponsored by the USDA Agricultural Marketing Service and Colorado State University Local and Regional Food Systems.
- The study participants grossed an average of US$9,335 per acre in vegetable sales and retained an average of US$4,192 after deducting annual cash expenses.
- The authors’ economic impact model estimates that US$1 million in sales by sample farmers would generate US$1.6 million in the regional economy. In comparison, the default model from IMPLAN would generate US$1.4 million.
- Sample farm operations spent more per dollar of input with other farm operators than the default economic impact model.
- Researchers collaborating with community partners is paramount for successful implementation of methods outlined in the Economics of Local Foods Systems Toolkit (https://localfoodeconomics.com/toolkit/).
RECOMMENDATIONS FOR POLICY, PRACTICE, AND RESEARCH
- As a study implementing best practices from the Economics of Local Foods Systems Toolkit, this article provides an example of how researchers, farm organizations, and businesses collaborated to collect primary data and model an economic contribution study.
- The authors emphasize the importance of quality farm financial data, which the research team collected via in-person interviews. The primary challenge for collecting sensitive farm finance data is recruitment, and any research team should have a solid plan to increase participation.
- Those involved with business and economic development should not overlook the collective impacts of small, local food farms that primarily market direct-to-consumer. Economic development officials often focus on firms that have the greatest footprint in terms of jobs or tax base. This research shows that small farms source a greater portion of their inputs locally than indicated by national benchmarks and may be deserving of greater development resources.
The findings are based on the farm financial records and spending patterns of 11 commercial vegetable growers in a 13-county study area that is primarily rural (only six of 13 counties contain a municipality of more than 5,000 people). Because of their distance from the Minneapolis–St. Paul metropolitan area (where half the state’s population lives), all growers in this study serve local, rural markets, primarily through direct marketing channels.
Full article: “Developing a Production Function for Small-Scale Farm Operations in Central Minnesota” in JAFSCD volume 8, supplement 3, pp. 1–10.
Date published: January 11, 2019
Authors and affiliations: Ryan Pesch and Brigid Tuck (both with University of Minnesota Extension)
Author contact: Ryan Pesch, email@example.com
Permanent link to abstract and PDF: https://doi.org/10.5304/jafscd.2019.08C.006
Publisher: Thomas A. Lyson Center for Civic Agriculture and Food Systems in Ithaca, New York
STOCKSCH 266 is part of the Sustainable Food and Farming Online Certificate Program and will count toward the Associate of Science degree as well as the Online B.S. degree. Online classes cost $482/credit.
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If you are not interested in earning college credit, there are many non-credited workshops and short courses you can take outside of the university. For a list see: non-university workshops and courses.