Leopold Center for Sustainable Agriculture

Leopold Center studies potential for increased fruit/vegetable production in the Midwest

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March 30, 2010

AMES, Iowa -- Expanding the fruit and vegetable industry in the upper Midwest could have a huge economic impact in the region.

A new analysis from the Leopold Center for Sustainable Agriculture at Iowa State University in collaboration with regional partners estimated potential state and regional economic values associated with increased production of fresh fruit and vegetables in a six-state area. The study included two scenarios and was conducted by Iowa State economics researcher David Swenson and included data from Iowa, Illinois, Indiana, Michigan, Minnesota and Wisconsin.

One of the key assumptions in the study was that farmers in the region grow enough of 28 kinds of fruit and vegetables to meet demand, based on population, during a typical growing season (about four months of the year) and longer for crops that could be stored, such as onions or garlic. The study did not include potatoes, sweet corn, pumpkins, apples, grapes, cranberries and cherries because ample supplies of those crops already are being grown in the region.

Scenario 1
In the first scenario, increased production of 28 fruits and vegetable crops in those six states could mean about $882 million in sales at the farm level, more than 9,300 jobs and about $395 million in labor income. An estimated 270,025 acres would be needed to produce those crops, roughly equivalent to the average amount of cropland in one of Iowa’s 99 counties.

Although relatively few acres would be required to significantly increase fruit and vegetable production in the region, the study found that the job also gains could be significant, compared to the number of jobs currently generated by the same amount of land under conventional agricultural production.

Another key assumption was that half of the increased production would be sold in producer-owned stores, resulting in additional impacts on regional economies. The six-state region would need about 1,405 establishments staffed by 9,652 people earning $287.64 million in labor incomes.

In Iowa, increased fruit and vegetable production could mean farm-level sales of about $61.4 million, with a potential retail value of $230.1 million and a total of 657 farm-level jobs, compared to the 131 jobs currently generated from this acreage under corn and soybean production. If 50 percent of this production were directly marketed in-state, it would require 98 fruit and vegetable establishments that would require 672 jobs.

“This the first multi-state study in the Midwest to examine potential economic benefits from increased regional fruit and vegetable production and marketing,” said Leopold Center Associate Director Rich Pirog, who has worked with Swenson on a number of related projects in Iowa and coordinated the regional partners for this study. “Since the same assumptions were made across all of the states in the study, we can examine both state-level and regional potential impacts.”

Scenario 2
A second scenario in the study looked at 28 metropolitan areas with populations that exceed 250,000 in and near the six-state region. Swenson’s previous modeling work has shown that potential demand from metro areas for locally grown food could nearly triple fruit and vegetable production in surrounding rural communities, and those regions often cross state lines. Cities such as Omaha, St. Louis and Cincinnati were included in this scenario because a portion of their markets was within 150 miles of the six-state region, the distance that farmers could travel to sell their crops and remain competitive.

Swenson estimates that increased fruit and vegetable production for the 28 metro markets would result in $637.44 million in farm-level sales and 6,694 farm-level jobs, compared to 1,892 jobs under corn and soybean production. The farmer-retail direct economic impact portion of this activity would generate 6,021 jobs.

Increased fruit and vegetable production in Iowa to meet demand for regional metro areas would mean $34 million in Iowa farm sales and 364 jobs, compared to the 72 jobs currently generated from this acreage under corn and soybean production. The farmer-retail direct economic impact portion of this activity would generate an additional 263 jobs.

Swenson warned that economic values from the two scenarios should not be added together. He explained, “The first scenario provided state-only estimates with economic values compiled from each state’s farmers and each state’s consumption. The second analysis evaluated individual counties within the six-state region and their capacity and potential to produce fresh fruits or vegetables, and was indifferent to state boundaries.”

This analysis estimates the total value of fruit and vegetable production in each scenario, and does not account for existing production. To determine a net increase in jobs or labor incomes, additional research would be needed. Swenson noted that the region has the capacity to grow enough fruits and vegetables to reach targets outlined in the study.

The research was funded primarily by a grant from the Leopold Center for Sustainable Agriculture at Iowa State University. Other organizations provided funds to purchase state-level data sets used in the analysis. Among them were the Fresh Taste Initiative in Illinois, the Institute for Agriculture and Trade Policy, the Minnesota Institute for Sustainable Agriculture at the University of Minnesota, Land Stewardship Project, Center for Integrated Agricultural Systems – University of Wisconsin, the Michael Fields Agricultural Institute, Indiana Cooperative Development Services, Michigan Food and Farming Systems and the C.S. Mott Group for Sustainable Food Systems at Michigan State University.

For more info contact:

Rich Pirog, Leopold Center Associate Director, (515) 294-1854, rspirog@iastate.edu

David Swenson, ISU Economics, (515) 294- 7458, dswenson@iastate.edu

Laura Miller, Leopold Center Communications, (515) 294-5272, lwmiller@iastate.edu 

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