The economics of buying local food

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July 6, 2011 - 7:00pm

Would you pay more for local food? Or would you expect to pay less? The answer is found in the geography.

Consider resturant owner Kevin Shinn. He opened his resturant, Bread & Cup, in downtown Lincoln Nebraska's historic Haymarket District. His resturant specializes in serving locally sourced food.

"If given a choice, I will always lean toward the local supplier, even if it's more expensive," Shinn said. "I will pay the higher price to get the local product."

More and more restaurants and grocery stores are carrying local food products. The USDA expects consumer demand for locally grown food in the U.S. to rise from an estimated 4-billion-dollars in 2002 to as much as 7 billion dollars in 2012.

"It's really gotten going in last 3 to 5 years. And some of that interest seems to be just since we've had the recession hit," said James Quinn, a regional horticultural specialist at the University of Missouri. "They didn't have a job, so they thought they'd try out this new business."

A lot of these new farmers are selling their product through farmers markets, where prices are relatively low. But that's not always the case with local food.

"Then you go to your urban or upscale markets, and those seem to be at the grocery store price level or higher," Quinn said. "So you almost have to look at an average across those to really get a good perspective."

Depending on where you are, there's sometimes going to be a premium for local food. But as the market expands, many producers are pressured to make prices match larger grocery stores.

"It really balances out," said Hy-Vee food stores Vice President of Perishables Tom Hobt. "The price is really going to be a factor of how good the growing season is for any one of those items. But to put a sign on something, to identify it as locally grown, we still have to be price competitive on that. So really, what the market bears is how we price our items (at Hy-Vee)."

In 2009, Rich Priog was with the Leopold Center for Sustainable Agriculture at Iowa State. In research he conducted he found it was cheaper to buy fruits and vegetables locally. But that's not the whole picture.

"One would have to look at the entire market basket," Pirog said. "We did make an attempt to look at lean ground beef, pork (and) eggs that were sold in local butcher shops, natural foods shops, etc., and it was very different to make the comparison from a research basis. Attributes are never exactly the same."

NET News documentary "Home Fields: Digging into Local Food" premieres Friday, July 8th at 7pm and 10pm Central on NET Television's NET-1 and NET-HD.



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