USDA: Local Foods Are Multi-Billion Dollar Business

Locally grown foods have become a multi-billion dollar business, according to a new U.S. Department of Agriculture report. Whether sold directly to consumers at farmers markets or through intermediaries such as grocers or restaurants, “local food” sales amounted to $4.8 billion in 2008, and are expected to generate $7 billion in sales this year.

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The USDA report found that sales directly to customers have just about doubled in the past two decades, from about $650 million in the early 1990s to about $1.2 billion today. Meanwhile, sales to local restaurants, retailers, and regional food distributors accounted for the rest of the $4.8 billion figure.

According to the report, local food sales are dominated by fruit and vegetable growers. While only 5% of U.S. farms sell their products in local and regional markets, 40% of vegetable, fruit, and nut farmers do so. Consumers are drawn to these kinds of markets because they believe the produce to be fresher, made with fewer chemicals, and grown by smaller, less corporate farms — a belief that may be true in some cases but not in others.

The USDA report specifies that “local” does not necessarily mean “organic,” a label that carries with it strict requirements for growers and that is overseen by the Department of Agriculture. Still, some shoppers welcome the opportunity to get to know the growers and what went into their produce. And shorter shipping distances for local foods mean that consumers are able to lower their carbon footprint.

The number of farms selling directly to consumers has grown from an estimated 86,000 in the early 1990s to about 136,000 now, according to the USDA report. The number of farmers markets in the country reached 5,274 in 2009, up from 2,756 in 1998.

Larry Alsum runs 1,800 acres of farmland in Friesland, Wisconsin, where he grows several varieties of potatoes that he sells mostly to regional grocers. He also handles wholesale distribution for other farmers in the area, growing his operation into a $50 million business, roughly double its value a decade ago, with a focus on locally grown food.

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“As the cost of oil and gasoline continue to rise, there are going to me more opportunities for locally grown,” said Alsum. “And that just gives us a built-in advantage in marketing.”