Leopold Center for Sustainable Agriculture

Economic Impacts of Local Food in Iowa

girl holding red tomatoThis project summarizes the statewide impact of the local food industry on Iowa’s economy in connection with efforts of the Regional Food Systems Working Group (RFSWG). It is based on data collected from 2012 and 2013, in cooperation with coordinators of the 15 regional food groups that comprise the statewide RFSWG.

The data measured four indicators of economic change:

  • local food sales by farmers
  • local food purchases by grocery stores, restaurants and institutions
  • job creation as a result of local food production, processing or utilization, and
  • funds leveraged by RFSWG groups to support the development of regional food systems.

The Leopold Center prepared two reports with findings from this project -- 2012 Economic Impacts of Iowa's Regional Food Systems Working Group [published 11-2013] and 2013 Economic Impacts of Iowa's Regional Food Systems Working Group [published 11-2014].

This two-year project is the first coordinated, comprehensive statewide attempt to measure actual community impacts associated with regional food system development in Iowa. The 2013 report discusses a void that exists for getting accurate data nationally on economic activity in the local foods sector. Here's a guest editorial about that data void in the current Journal of Agriculture, Food Systems and Community Development.

Statewide report - 2014

Highlights

  • Farmer sales reported: $10.5 million in 2012, and more than $13 million in 2013. Repeat respondents who participated in both years increased sales from $9.2 million to nearly $11 million.
     
  • Local food purchases by food buyers reported: Nearly $9 million in 2012, $13.1 million in 2013. Repeat respondents reported purchases of $8.1 million in 2012 and $9.6 million in 2013. Buyers included grocery stores, restaurants, K-12 schools, colleges, hospitals, nursing homes, caterers, camps and non-profits.
     
  • Amount of food budget (among half of the buyers) spent on local: 18 percent in 2013. This is more than double that spent in 2012, which was an average of 8.7 percent.
     
  • New jobs created in 2013: 118. Added to the 53 new jobs we tracked in 2012, the two-year total is 171 new jobs. One in three of those jobs are full-time.
     
  • Funds leveraged by 10 regional groups over two years: More than $1.5 million. Half of the money raised came from sources outside of Iowa.
     
  • The average two-year investment cost of creating one new FTE job in the local foods sector was $26,172. The average public cost per new FTE job was $15,661.

What was learned?

  1. Local/regional food commerce is growing although federal efforts to measure this increase by asking about direct-to-consumer sales is falling short. Sales to institutional and intermediated markets such as grocery stores and restaurants are eclipsing direct-to-consumer sales and creating jobs.
     
  2. The farmers surveyed likely are operating farms at scales ideal for job creation; in other words, those that require more labor but are not large enough to generate efficiencies of scale that make it worthwhile to replace people with machinery.
     
  3. Very modest public investment in the work of regional food coordinators contributes to job creation in Iowa. Over the past two years, it cost the public $15,661 to create one full-time job in the local foods sector in Iowa. Compared to the cost of recruiting low paying retail jobs from outside the state, a wiser investment approach to creating jobs in Iowa is to grow our own in the local foods sector.
     
  4. This model is working but needs more support. Networked local food coordinators already have demonstrated they are effective at helping create jobs in Iowa on shoestring budgets pieced together from various sources of funding from government agencies, nonprofits, and the private sector. Providing a robust and consistent source of funding for local food coordinators promises to generate even greater economic returns to the state of Iowa.
     
  5. If results were at all representative (the report does not suggest that they are), estimated local food sales in Iowa may be closer to $322 million annually as opposed to $17.5 million reported by the 2012 U.S. Census of Agriculture.
     
  6. If all of Iowa’s estimated 914 grocery stores would purchase local foods at the level ($407,000) our 22 responding grocery stores did, this would generate $371 million annually in local food sales alone. Add restaurants to the mix (an estimated 6,000 in Iowa spending an average of $101,628 each) and Iowa could generate an additional $610 million in sales annually, for a combined grocery store and restaurant total of nearly $1 billion in local food sales.
  • Statewide report - 2013boy holding beet

  • Two-page summary and full report
  • News release [11-11-2013]  and Newsletter article [Winter 2013]
  • 103 farmers reported more than $10 million in local food sales in 2012.
  • 74 buyers reported nearly $9 million in 2012 (this included grocery stores, restaurants, K-12 schools, colleges, hospitals, nursing homes, caterers, camps and non-profits).
  • Not quite half of the buyers (35) also reported their total food budget, so we were able to calculate the average percent (8.7) of budgets spent on local foods, or an average of $120,731 spent by each buyer. If all 74 buyers participating in the survey increased local food purchases to 30 percent of their total food budget, these markets would have reported more than $21.5 million in local food purchases in 2012, potentially creating 93 new full-time jobs.
  • We collected jobs data from a subset of farmers (47) and buyers (74). Of 36 new on-farm jobs that were created in 2012 as a result of selling local food, 10 were full-time equivalent (FTE). Buyers reported creating 17 new jobs as a result of buying local food, 14 of which were FTE jobs.
  • Eight regional food groups leveraged $766,020 for local food efforts.

Local food champions - 2013

Part of the evaluation included a collection of stories about Iowa's local food champions -- those farm-based and community businesses working with regional food groups throughout the state. Read their stories at the links below or download a printable copy of all profiles [PDF].

More about RFSWG

Established in 2003, the Regional Food Systems Working Group is a statewide umbrella networkIowa map showing counties of RFSWG groups for all Iowans working to build a more resilient regional food system. RFSWG is comprised of 15 geographically-based groups called regional food groups that reach 91 of Iowa's 99 counties. Each regional food group works with different stakeholders -- farmers, food-based businesses, non-profits, Extension, Resource Conservation & Development organizations, educational institutions and government agencies -- to support local food systems development in their region.

Click on image at right to see larger map.

These regional food groups are part of RFSWG (13 participated in the 2014 evaluation):

  • Flavors of Northwest Iowa: Working in Buena Vista, Cherokee, Clay, Dickinson, Emmet, Ida, Lyon, Monona, O’brien, Osceola, Palo Alto, Plymouth, Sioux and Woodbury counties
  • Healthy Harvest of North Iowa: Working in Cerro Gordo, Floyd, Franklin, Hancock, Kossuth, Mitchell, Winnebago, Worth and Wright counties
  • Northeast Iowa Food & Farm Coalition: Working in Allamakee, Chickasaw, Clayton, Fayette, Howard and Winneshiek counties
  • Northern Iowa Food and Farm Partnership: Working in Benton, Black Hawk, Bremer, Buchanan, Butler, Grundy and Tama counties
  • Field to Family Food Coalition: Working in Benton, Cedar, Iowa, Johnson, Jones, Linn, Poweshiek, Tama and Washington counties
  • Dubuque Eats Well: Working in Delaware, Dubuque, Jackson and Jones counties
  • Quad Cities Food Hub: Working in Clinton, Muscatine and Scott counties
  • Hometown Harvest of Southeast Iowa: Working in Mahaska, Keokuk, Washington, Louisa, Wapello, Jefferson, Henry, Des Moines, Davis, Van Buren and Lee counties
  • South Central Iowa Area Partnership: Working in Appanoose, Clarke, Decatur, Lucas, Madison, Monroe, Union, Warren and Wayne counties
  • Southern Iowa Local Foods Initiative: Working in Adair, Adams, Clarke, Decatur, Ringgold, Taylor and Union counties
  • Southwest Iowa Food and Farm Initiative: Working in Audubon, Cass, Fremont, Guthrie, Harrison, Mills, Montgomery, Page, Pottawattamie and Shelby counties
  • Eat Greater Des Moines: Working in Dallas, Marion and Polk counties
  • Central Iowa RFSWG : Working in Boone, Hardin and Story counties
  • Greene County Local Foods Working Group: Working in Carroll, Greene and Guthrie counties
  • Harvest from the Heart: Working in Marshall county

* Coordinators of 9 regional food groups have data specific to their region and profiles of local food champions; please contact regional coordinators for those reports. [Contact information for coordinators is on page 17 of the statewide report.] Links above go to the regional food group's website.

More information

For more information about this evaluation, contact Associate Scientist Corry Bregendahl, (515) 462-0450, or corry@iastate.edu