Survey: Demand for Local Fresh Foods Has Economic Benefits

Increased demand in metro areas for locally grown food has positive impact on neighboring rural economies.

Published on: Feb 4, 2010
Increased demand in metropolitan areas for locally grown food could have a positive impact on neighboring rural economies in southwest Iowa, a new report from the Leopold Center for Sustainable Agriculture shows.

Iowa State University economist David Swenson worked with the Leopold Center, two local food councils and the Southwest Iowa Food and Farming Initiative to conduct an analysis for 10 counties in southwest Iowa: Adair, Adams, Audubon, Cass, Guthrie, Harrison, Mills, Montgomery, Pottawattamie and Shelby. Results show that a modest increase in fruit and vegetable production could bring an additional $2.67 million in labor income and the equivalent of 45 farm-level jobs to the region. The study did not look at additional income or jobs generated in the direct marketing and retail sectors.

Study shows increased local food impact from metro areas

"This study is timely given the region's recent investment in local foods through the creation of local food councils in Pottawattamie and Cass counties," says Leopold Center Associate Director Rich Pirog, who worked with Swenson on the study. "It shows a clear link between local foods and economic development."

Swenson's report, "The Economic Impact of Fruit and Vegetable Production in Southwest Iowa Considering Local and Nearby Metropolitan Markets," is available on the Leopold Center site www.leopold.iastate.edu/research/marketing_files/swiowa.html .

One of the key assumptions in Swenson's analysis is for farmers in the region to grow enough of 22 fruits and vegetables to meet local consumption in a typical Iowa growing season, or about four months of the year. Such a scenario would require about 900 acres of new fruit and vegetable production, generate $2.42 million in sales, and $928,373 in labor incomes and nearly 16 jobs for the region.

Supports work being done to increase local food production

Unlike other similar studies that Swenson has conducted with the Leopold Center, the southwest Iowa analysis included the potential impact from nearby metropolitan markets, in this case, Omaha/Council Bluffs and Des Moines.

Those two markets nearly triple the demand for fruit and vegetables in the region, even taking into account that fewer farmers would choose to deliver to those markets due to distance. Growing fruit and vegetables to supply a portion of these two metro markets would require an additional 2,100 acres in the 10-county region and fetch $4.62 million in direct farm-level sales, generate $1.75 in new labor income and nearly 29 jobs for the region.

"This study supports the work being done to increase local food production both for consumers within the rural areas of southwest Iowa and the urban market consumers," said local food coordinator Bahia Barry, who works with the local food councils and SWIFFI. "We are working hard to encourage more local food production in the region in order to fulfill current demand and prepare for increased demand in the future."

Need to prepare for increased demand for local food in future

Swenson says it's important to understand the region's overall demographic changes and the economic activity patterns that have evolved over the years. "This region is characterized by population declines in its non-metropolitan portions, slow job growth and comparatively low earnings per job. The region is highly dependent on agriculture, far more than the Iowa average, and its regional retail sales levels indicate there are substantial trade leakages out of the region."

The report does not address many technical aspects of local food production such as consumer sentiment, local policies, and being able to gauge the risks and constraints to production. Other Iowa local food economic impact studies can be found on the Leopold Center's Web site at www.leopold.iastate.edu/research/marketing_files/economic.html.
Pottawattamie County earmarked funds in 2008 to hire a local food coordinator and Cass County also has joined the effort. Other organizations supporting this position are the Iowa West Foundation, the Metropolitan Planning Agency and Golden Hills RC&D. SWIFFI is a multi-county coalition of individuals and organizations that supports community-based food systems that connect production, processing, distribution and consumption for better health, food security, and community and economic development.