Consumers Continue to Invest in Farmers Markets, Local Food Despite Economy

      Posted On: January 18, 2009

by Wendy Wasserman

The most recent data available from the Agriculture Marketing Service (AMS) reported more than 4,600 farmers

Crowds patronize vendors at Boulder Farmers Market. Photo courtesy of Mark Menagh.

Crowds patronize vendors at Boulder Farmers Market. Photo courtesy of Mark Menagh.

markets in the U.S. in August, 2008. This represented a 6.8% growth in farmers markets over the previous two years alone. In December 2008, The American Journal of Agricultural Economics published a review of research on the economic impact of farmers markets, citing statistics from annual sales of markets in Oklahoma ($3.3 million in 2001), Iowa ($21 million in 2004) and even a positive net economic impact (after factoring in the revenue loss to other food retailers) in West Virginia in 2005 ($1.075 million). 

These statistics certainly illustrate a positive growth trend for farmers markets and mounting evidence that the revenue generating potential for farmers markets can not, and should not, be ignored. However, these same statistics were complied and assembled before the current economic crisis, thus begging the question if the new economic climate will rain on farmers markets’ parade?

“I don’t see this as bad times at all for farmers markets” says Gabrielle Langholtz, former spokesperson for New York’s GreenMarket and current editor of both Edible Manhattan and Edible East End. “Factor in all the excitement about local food, and farmers markets are doing really well right now.”

Don Kretschmann, an organic produce farmer in Pennsylvania agreed in a recent column for the Pittsburgh Post-Gazette. “The local food business is thriving – despite the ‘real economy.’”

What are the factors giving farmers markets the market edge these days?

One reason could simply be that farmers markets are great for shoppers pinching their pennies. “Farmers markets have a lot of fantastic deals” says Langholtz. “The core stuff is price competitive with stores. But also in [places like] New York, even splurgy items at the market are cheaper than entrees featuring the same food for $35 a plate at a restaurant.”

However, good deals are only part of the story. Some economists speculate that farmers markets’ fortitude is more complex. One factor could be their flexibility to act and react to direct and community needs.

Micro-economist and President of Crossroads Resource Center in Minnesota, Ken Meter sees farmers markets as useful to local economies because the direct interaction between farmers and consumers is based on trust, as well as a market’s ability to enhance that relationship. Because of these personal relationships, markets can quickly act, and react, to both consumer demands and vendor needs.

“Farmers markets bill themselves as being responsive to consumers as needs change.[At farmers markets] farmers negotiate directly with customers.” Meter notes. “They can adjust price and adjust their product to get consumers’ needs met. Retailers and stores with big overheads and other expenses can’t do that.”

The flexibility inherent in farmers markets can be useful in other ways too. For instance, they can add value in comprehensive city and urban planning. When located at transportation nodes like trains stops or bus depots, markets can quickly become destinations and economic stimulators at the community level. Likewise, they can also be essential elements for Main Street urban planning models where communities look towards rebuilding their economic centers using local businesses and investments.

“Farmers Markets are an anchor for local identities” says Meter. “As places to gather [economically and socially] farmers markets are very important.”

Others note that farmers markets are the essence of the shop local economic stimulation argument, and therefore critical to the economic health of communities.

According to Michael Shuman, author of The Small Mart Revolution: How Local Businesses Are Beating the Global Competition and a leading analyst about the strength and potential of local economies, there four basic arguments as to why buying local can offer great economic benefits. First, local businesses have direct multiplier in the local economies and can generate more local wealth, income, and tax revenue for their home communities. Second, local businesses are more responsive, and responsible, towards with the long term plans and goals of a community. Third, local businesses are anchors for other economic development issues like tourism, creative economies, and smart growth. Finally, local businesses tend to have a smaller carbon footprint.

“Shopping at a Farmers Market is investing in something longer term for the community,” says Shuman. “The arguments [for shopping at farmers markets] are the same for farmers markets as they are for toothpaste.”

However, one of the primary reasons farmers markets could be continuing their momentum in the face of such dire economic times could be one of the simplest. Namely, people need to eat and they prefer to eat fresh and local. The USDA reports that 2% of consumers now do the majority of their shopping at farmers markets.

According to a recent study by the Hartman Group, a research firm focusing on consumer trends there continues to be “an ever expanding infatuation with ‘all things local’… and a continuing – and deepening – fascination with ‘all things fresh’.” The Hartman Group’s research suggests that “consumer’s tastes and preferences are generally evolving in the direction of high quality,” and the researcher predict “we do not expect such evolution to be derailed by the economic tumult.”