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USDA Report Shows Increase in Activity of Local and Regional Food Systems

May 10, 2015 |

post_usdalogoThe United States Department of Agriculture Economic Research Service recently published a report on the breadth of local and regional food systems, as well as current trends.

In 2012, 163,675 farmers sold a total of about $6.1 billion worth of locally marketed food, states the report. Also according to the report, 7.8 percent of U.S. farms sell local foods, which represents 1.5 percent of the total value of agricultural production in the U.S.

Local and regional systems are also growing and expanding, says Stephen Vogel, an agricultural economist with the Economic Research Service and co-author of the report.

“The complexity of local food systems has reached new levels and a new economy of scale,” he says.

Of vital importance to this broadened outreach of local foods are food hubs, which, according to the report, have almost tripled in numbers in the past seven years, to 302.

Yet the explosion of interest in and an increase in production of local foods has not prevented roadblocks from occurring. But food hubs, which aggregate locally produced foods for distribution, often provide the innovation to continue the momentum, according to Vogel.

“Obstacles are part of the evolution of most food systems,” he says. “As you grow, you hit certain bottlenecks, and food hubs create a way of getting beyond that. They are sources of opportunities for small and midsize farmers to prosper.”

And it’s primarily small farmers who grow and provide local foods. The report states that 85 percent of farms that produce local foods are small (gross revenue less than $75,000). However, large farmers are getting in on the act too. Over two-thirds of local food sales are sourced from larger farms (gross revenue at least $350,000).

Sarah Low, USDA economist and co-author of the report, sees the rise in the number of food hubs and aggregators as tied to an urban demand for local foods.

“I see local going really urban; in fact, it’s already gone urban,” says Low. “Its demand is driven by people in high-income urban areas. In rural areas, you eat local food because it’s from your neighbor. In urban areas, it’s kind of trendy.”

Vogel agrees that urbanites’ demand for local foods is significant but says that the demand is strong for people of all income levels.

“The demand for local food is not just from the upper class, at least not here in D.C.,” he says. “It’s become much more pervasive.”

One of the keys to affordable local foods access, Vogel believes, is enjoying access to open markets.

“This is where food hubs come in,” he says.

Much of the increased demand for local foods, says Vogel, is fueled by a growing distrust of conventional foods. And as the local foods movement keeps growing and expanding, definitions keep shifting. This especially applies to food hubs.

For example, food hubs can be large or small, they can serve rural and/or urban populations, and rural food hubs can supply urban food hubs. Or, a food hub can even supply a large corporation like Sysco, which in turn provides food to institutions such as schools and hospitals.

“It’s a fast growing sector,” he says. “Food hubs arise in different regions of the country for different purposes.”

And increasingly, food hubs and other local foods purveyors are working in tandem with the conventional food industry.

“Many local food systems are not working independently of conventional food,” says Vogel. “It’s transforming restaurants and grocery stores. For example, Chipotle wants to source locally.”

With the changing landscape of local food production and marketing, Vogel sees a diminished role of the traditional farmer’s market and a rise in the number of on-farm stores and roadside stands in urban areas.

“I’m impressed with the kinds of innovators I’ve seen in marketing channels,” he says. “There’s so much innovation going on.”

Even the definition of local also seems to be ever-changing.

“The USDA has tons of definitions of local; one definition is within 400 miles of state boundaries,” says Low. “Every wholesaler or retailer has its own definition of local. The question is, will consumers ask how local is local? This could possibly be a stumbling block as local continues to scale up.”

Low foresees high-end specialty foods, such as specialty livestock or poultry, becoming a potential new wave of foods that are defined as local.

“Direct from New Mexico to New York could be local,” she says.

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