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Sacramento Is a National Leader in Direct Farm Sales

By Pat Bailey on July 8, 2010 in Food & Agriculture

Sacramento-area farms market directly to consumers through farmers markets and roadside produce stands at almost twice the rate of farms nationally, reports an agricultural economist at the University of California, Davis.

The local study, conducted by Shermain Hardesty, a Cooperative Extension economist in the UC Davis Department of Agricultural and Resource Economics, found that 14 percent of Sacramento-area farms marketed directly to consumers, compared to just nine percent of farmers nationally.

Hardesty’s research is part of a larger study that examined how locally grown food is supplied to consumers in five metropolitan areas. The study was funded and coordinated by the U.S. Department of Agriculture’s Economic Research Service. Hardesty studied sales of mixed greens. The other researchers focused on apples in New York, blueberries in Oregon, beef in Minnesota and fluid milk in Washington, D.C.

In each case, the researchers looked at three types of food sales: direct marketing such as farmers markets or home delivery, intermediated sales through natural-food chains or institutions, and mainstream sales through supermarkets.

Hardesty found that farms in the Sacramento region that marketed directly to consumers averaged $19,518 in annual income from this marketing channel, ranging from a low of $6,924 among Placer County farms to a high of $66,568 among Yolo County farms.

“We were especially interested to find that, even after deducting the added costs of transportation, distribution and selling at the farmers market or other point of sale, the farmers are still able to net a greater share of retail prices in local food supply chains than they would had they used conventional marketing chains,” Hardesty said.

She noted that while mixed greens growers in Monterey County received an average of 79 cents per pound by marketing through conventional channels, one Yolo County grower netted seven times that price at a farmers market.

Hardesty talked with farmers, a cooperative grocery store, a farmers market manager, produce distributors and supermarkets. Included were farmer Jim Eldon, who grows 90 to 100 crops annually on his 32-acre Fiddler’s Green farm in the Capay Valley, and the Davis Food Co-op, which buys produce from local farmers and is representative of the “intermediated” supply chain.

“The study took a hard look at fuel efficiencies involved with direct marketing of agricultural goods and found that food miles alone -- the number of miles a product is transported from farm to consumer -- are not a good indicator of fuel efficiency,” Hardesty said. “We found that when producers have larger load sizes, they can significantly increase their fuel efficiency,” she said.

For example, in the Sacramento region, the farmers market supply chain for mixed greens burned an average of .63 gallons per 100 pounds of product, compared to .52 gallons for the mainstream supermarket and .18 gallons for the food cooperative.

The Sacramento-region study also found that fixed costs for compliance with regulations and business practices limit the potential size of local food supply chains, and that farmers markets provide opportunities for growers to make connections that will lead to other direct-marketing opportunities through outlets such as community-supported agriculture programs, restaurants, buying clubs and home-delivery businesses.

The full report, “Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains,” is available from the U.S. Department of Agriculture at: http://www.ers.usda.gov/Publications/ERR99/ERR99.pdf.

The related state-level studies are available as “Case Studies on Local Food Supply Chains” at: http://foodindustrycenter.umn.edu/local_food_case_studies.html.

About UC Davis

For more than 100 years, UC Davis has engaged in teaching, research and public service that matter to California and transform the world. Located close to the state capital, UC Davis has 32,000 students, an annual research budget that exceeds $600 million, a comprehensive health system and 13 specialized research centers. The university offers interdisciplinary graduate study and more than 100 undergraduate majors in four colleges — Agricultural and Environmental Sciences, Biological Sciences, Engineering, and Letters and Science. It also houses six professional schools — Education, Law, Management, Medicine, Veterinary Medicine and the Betty Irene Moore School of Nursing.

Media contact(s)

Pat Bailey, Research news (emphasis: agricultural and nutritional sciences, and veterinary medicine), 530-219-9640, pjbailey@ucdavis.edu

Shermain Hardesty, Agricultural and Resource Economics, 530-752-0467, shermain@primal.ucdavis.edu

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