Can our local farmers market support real farmers?

After the piece I linked to Monday, I want to present my own economic argument from our own experience at market to bolster the piece’s core economic complaint. A few years ago, some folks with MU did a basic survey of market customers, at market, including questions like where they lived and how much they spent at market. Most of the surveyed folks reported spending something like $10-$20 a week at market. Some people certainly spend much more than that, but let’s say that $20 is an average. Let’s put this in perspective with a back-of-the-envelope calculation.

Average Saturday market attendance for the last few years is around 4,000/week, which includes kids. The survey reported that most people come to the market in pairs (plus kids). So let’s assume it’s actually 2,000 separate households. Each household spends an average of $20, so that’s an estimated $40,000 spent each week. Multiply that by 30 weeks, and that’s $1.2 million dollars. Obviously, this is a rough estimate of spending at Saturday markets. But sales data from the Fayetteville Farmer’s Market in northwest Arkansas suggest that the estimate is probably of the right order of magnitude. That market has 100 member vendors, summer Saturday customer counts in the 4,000s, and total annual sales of a bit over $1 million (as reported in Growing for Market).

Over a million dollars sound great, until you split it up among all the vendors. Divide that by 80 vendors (for CFM), and you get an average gross annual income per vendor of $15,000. Even as a net income (which it certainly is not), that doesn’t come close to supporting independent farms. Obviously there are much smaller vendors making far less in gross income, and a few big vendors making more in gross income, but the core point is that there’s nowhere near enough consumer spending at the market to support more than a handful of real, full-time (not hobby or part-time) farms. Keep in mind that very few of the vendors at CFM, even most of the bigger ones, are actually farming full-time and earning a living. Most have other jobs, or spouses with jobs, or Social Security & retirement benefits, or some other outside incomes that means they don’t have to make all their living from food sales.

Another angle: From some quick online research, the average American family seems to spend $100-$400/week on groceries. If the normal/dominant consumer at market spends $20/week, that means that only 5%-20% of personal food spending is happening at the farmers market, despite the market having the vast majority of foods that fit into any normal, healthy dietary regime, and those foods easily being fresh enough to last all week to the next market. Again, this is not going to sustain any real shift toward independent small farms, especially when it’s only among the 5-10% or so of the Columbia population who’re even bothering to shop at all.

Local foods are all about the economics. Green or not, small independent, full-time farms will succeed only if people spend real money with them, and will not if they remain a cute boutique source for Saturday night’s dinner with the other 20 meals coming from food corporations. That’s the reality we’re up against, and it’s something too many journalists and non-profit small farm advocates ignore or forget when praising the local foods movement. Certainly things are better than 20 years ago, but it’s far from an economic success story in the long run.

Also, whenever considering numbers like these, remember that such sales numbers =gross, not net, and it’s hard to judge farm-by-farm what a good income is. For example, a meat vendor may bring in a high total cash-flow at market because their products are more expensive, but their net may be low. A farm like ours that focuses heavily on low-overhead methods may never be as big or bring in as much gross as an expensive tillage farm, but our net (or at least our net/gross ratio) may well be better.

Finally, to be clear, I’m not saying we haven’t come a long way toward rebuilding local foods and small farms. We have. What I’m warning against is “Mission Accomplished” syndrome, in which food writers and nutritionists and journalists expound upon how vibrant modern farmers markets and local food systems are, without ever checking under the hood to see just how healthy the admittedly improving patient really is.

10 thoughts on “Can our local farmers market support real farmers?

  1. I've noticed that Schnuck's and HyVee have "local Missouri" produce displays, but I expect that those are from fairly large producers. They and other stores have some or all of: Goatsbeard cheeses, and local (Bonne Femme and others') honey, Baumgartner Boone Co. ham, etc. Could local food producers band together and work with the big stores to brand their products more strongly? Would people be interested in buying "Chert Hollow Cucumbers" for example? I imagine an MU marketing class could work on this, figure out pricing structures, and identify potential pitfalls (e.g., consistent supply). We often feel at a loss when we can't make it to CFM – what are we going to eat during the week???

  2. Frank,It's a fair question, and one I will attempt to answer without writing a full essay. I see several significant problems with selling to grocery stores.1) Wholesale prices. The instant I approach a grocery store, I'm looking at recieving 50% of retail if I'm lucky, in effect earning half the income for the same product. Thus I have to raise twice as much product to earn the same amount of money, for the dubious benefit of saving myself some direct-marketing costs. If, as you suggest, I aggressively brand myself at the store, I forfeit some of even that advantage. And all of that assumes the store will charge (and get) my original market-based retail price, which it may not with the surrounding price pressure of subsidized California produce all around. People may pay a better price at a farmers market where they can see the farmer (though even then the hordes gravitate to deals, not source); not so much when the farmer is just a sign and a logo like any agribusiness.2)Loss of control of product. For me, the quality & source of the product is what justifies its price, and my reputation is bound up in that quality. Once something shows up on a store display, I have no control over how it's treated, how long it sits there, how many customers handle, squeeze, and dent it, and so on. That doesn't matter so much to a true wholesale seller whose name isn't on the product, but once I implement your goal of branding myself at the store it very much does. People aren't going to see an old, banged-up Store X squash, they're going to see a Chert Hollow Farm squash. I don't trust stores to have the turnover rate and handling procedures to keep my produce at the quality I expect customers to get, and if I take my name off I lose all benefit of selling to them in the first place. I have yet to see produce in any store in Columbia in a condition I would want my name attached to, and thus I have no interest in doing so.It is certainly true that successful farms should diversify if possible; relying on one weekly farmers market for all income is risky. That's why we sell to local restaurants as well; it gives us a second income stream, a different mode of growing and sales, and also helps assure the quality, storage, and handling standards we prefer because I can better trust chefs to manage the produce properly. Plus, the restaurants we work with are willing to pay a better price (typically 70-90% retail) because they get a significant value in return from our quality, and work with a customer base who is willing to have that cost passed on to them more so than a standard grocery shopper.There have been efforts all over the country for years to work out various partnerships/coops/sales groups that pool small farm products into larger batches for sale to larger institutions. Some have worked well for others. That sort of thing is already ongoing in Missouri as private initiatives. Whether or not it works for some farms is up to them; I think it's rare that it would work for a dedicated direct-market farm whose business model is set up on low-volume, high-quality items.Finally, I've been to some of the medium-scale farms which supply large volumes at low prices to produce auctions and the like, and all I can say in a short space is that it didn't appear to me they were making much of a good living either, and they were certainly relying on extremely non-organic methods that I want nothing to do with. This is especially true on some Mennonite and Amish farms.This is already real long, but hopefully that's a partially useful response. I don't think there's much that an MU class (with no understanding of the subtleties of farming) could come up with that private farmers and other folks haven't already tried or tested with the impetus of good 'ol capitalism behind them.

  3. I guess that's a legit number, but I wonder if I have, even once, spent "10-20 dollars" at the market. I bet I'm more in the range of $80 per visit.Still, those people are there. It's a start.

  4. Eric, the major issue in getting any product into consumer consciousness is marketing, and perhaps CoMO's local providers could do more. Would Columbians spend more in a supermarket for squash with a pedigree? They certainly seem willing to spend $6 at Starbuck's for a cup containing 30 cents worth of coffee and 10 cents worth of milk. And clearly, our local seasonal restaurants have developed a local-friendly niche as well.At the very least a consumer survey would be informative, and some eager marketing class would be a good way to get it done, IMHO.

  5. I thought this posted last night, but it seems to have not shown up. Here it is, belated:Frank,My experience so far has been that marketing is of limited value in this business. It costs time and/or money and is very difficult to prove returns from. After three years selling at the Saturday market, with a stronger marketing/branding effort than most other farms, we're still not able to sell what we bring most days and watch many other stands with lower prices and little to no marketing/branding outsell us. I know another vendor who has put a lot of time into making signs and informative displays (all the things you're supposed to do), and who has complained to me on numerous occasions that it was a wasted effort because no one reads them; they just ask the price. So forgive me if I'm doubtful that a broader and more expensive marketing effort aimed at grocery store customers could be more effective than one focused on existing market customers who are far more predisposed to support us than the general consumer at large. I'd be interested to see what an effective marketing survey showed, but so far I haven't seen much evidence that brand matters more than price at a general consumer scale within the market for fresh local produce.Scott (and Frank),I want to reiterate that I don't think that piece was aimed at folks like you, and I didn't take it as such. I can see why it bothered you, but respectfully maintain that it represents the way a lot of farmers think behind the scenes, just as many other professions have similar internal concerns. Maybe there is sin or folly in saying openly things that are safer left unsaid, but I think we're all better off with the discussion. For example, Scott, I don't question what you spend at market. I don't have any way to judge individuals' spending habits and try not to, because I generally know nothing about their income, garden size, preference to spread their cash around at market vs. be loyal to one grower, etc. So I don't base any of this on some mental database of who's a better person or not because of their eating/shopping habits. I'm coming at this from a collective/statistical perspective, along with my personal experience attempting to grow and sell enough produce to make a full living. And it seems to me that in a city the size of Columbia, the amount of talk about local foods is not matched by the actual economic behavior, individual stories notwithstanding.

  6. This are tough times for everybody, and people look at prices a lot. Eating organic is good, but it's not affordable for all. Your prices are normally higher than the rest, that's probably why you don't sell everything.

  7. That's certainly true, but it somewhat makes the point for me. I don't expect to be affordable to "all", even though I get EBT customers and students nearly every week who make a choice to spend their money with me rather than elsewhere. Even in hard times, we all have a choice where we spend whatever money we do have, and the core argument here is that it's not going to local foods in the quantities that media or cultural rhetoric implies. And I've found that in many cases, my "high" prices are still less than what grocery stores are charging for imported organic, and they sell a lot more of that than I do my product. So the potential is there.People have always looked at prices; it's the core driving factor in our consumer culture. While current conditions may focus their attention a little more, I don't think that alone is enough explanation. As I've argued before, it's economically rational for individuals to seek out lower prices, but collectively that has a tendency to drive our economy away from sustainable production. We all liked saving money on shoes, until the jobs went overseas, and we lost all the taxes and secondary economic benefits having shoe workers gainfully employed here.All I'm saying is that the reality on the ground, when farmers (organic or not) look at the amount of consumer activity needed to sustain a real long-term shift to independent farm businesses, is that the activity does not meet the rhetoric. That was true before the recession. I have no argument with any individual managing their budget the way they see best, but collectively it's clear to me that Columbia & the surrounding area has more than enough spare change floating around to support local farms more. Hell, people in a nearby, supposedly more economically depressed part of MO, just paid $2,500 for a freakin' stray goat, and tens of thousands routinely pay a lot more than $20/week on food at football games. All of which is their private choice, but which puts to rest the idea that there's no spare money in Columbia for local foods. These are choices, not inevitabilities.

  8. Which also proves my point, that both the media and people in general can spend more time, interest, and money on a stray goat than on something important and relevant. THere is clearly no shortage of possible money and attention span, just a shortage of willingness to focus those resources where it matters.

  9. Thanks for crunching the numbers. I sell at our local farmers market and I find it frustrating at best. There is always some hobbyist vendor willing to sell at a loss in order to move their excess produce or eggs. If we get one of those a month then the rest of us vendors have to get by on three good markets a month. One a week and we're out of business. I don't know that there's any solution but it still irks me.