Local food has been of keen interest to consumers in recent years, and the subject of federal, state, and local government policy. Demand for local foods has grown. Local foods have been linked to a full range of USDA priorities (i.e., enhancing the rural economy, the environment, food access and nutrition, informing consumer demand, and strengthening agricultural producers and markets).

Understanding who buys local foods – and why – is vital for producers, grocery stores, restaurants, and others needing information on consumer demand for local food.

The USDA Economic Research Service (ERS), a primary source of economic research and analysis, has issued a report providing an overview of local and regional food systems in the United States. Prepared for congress, the report details the latest economic information about local food producers, consumers, and policy. It is based on results from several national surveys, as well as a synthesis of recent literature. It also identifies key trends.

The study found that:

“Producer participation in local food systems is growing, and the value of local food sales, defined as the sale of food for human consumption through both direct-to-consumer (e.g., farmers’ markets) and intermediated marketing channels (e.g., sales to institutions or regional distributors), appears to be increasing.”

Some specific findings included:

  •  In 2012, 163,675 farms (7.8 percent of U.S. farms) were marketing foods locally.
  • Local food sales totaled an estimated $6.1 billion in 2012.
  • The number of farms with DTC sales increased by 17 percent and sales increased by 32 percent between 2002 and 2007; however, between 2007 and 2012 the number of farms with direct-to-consumer (DTC) sales increased 5.5 percent, with no change in DTC sales.

ERS analysis of the USDA Farm-to-School Census (2011-2012) found that farm-to-school programs exist in more than 4 out of 10 school districts across the country.

Some are questioning whether the fact that DTC sales did not increase is due to plateauing consumer interest, or to growth in non-direct sales of local food (i.e., local food sold through  channels such as grocery stores or institutions). The values of non-direct sales is not measured by the census of agriculture.

USDA researchers identified the problems that have challenged others trying to assess the impacts of local and regional food enterprises, saying:

“It is difficult to draw conclusions about the local economic impact of local foods systems because the existing literature has narrow geographic and market scope, making comparing studies complicated. Data necessary to conduct economic impact analyses are costly to obtain, and researchers have yet to agree on a standard way of accounting for the opportunity costs involved when local foods are produced and purchased or on a standard set of economic modeling assumptions. Many questions surrounding the economic impact of local foods remain unanswered and could be addressed by future research (e.g., Are local food systems good for the rural economy? Might the economic benefits of expanding local food systems be unevenly distributed?)”

Also discussed in the report was the unknown impact of the Food Safety Modernization Act (FSMA), which calls for significant changes to the U.S. food safety system. Per the USDA report, “Regulatory focus shifts from response (to contamination) to prevention in order to ensure that the U.S. food supply is safe. Both the proposed Produce Safety Rule and the proposed Preventive Controls Rule may affect local food farmers.”

The research team drew no conclusion on whether local food production has a different environmental impact, but do present information about environmental practices of farms with and without DTC sales.

ERS recently hosted a webinar to provided an overview of “Trends in U.S. Local and Regional Food Systems: A Report to Congress.” View the recorded webinar here.