Regional report shows economic potential for building local produce industry

Anthony Flaccavento

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One tale of success

“You can’t have a business model based on exotic foods that many people cannot afford. We like to say that we grow ordinary food for ordinary people.” -- Anthony Flaccavento, keynote speaker at Leopold Center’s April 1 Marketing and Food Systems Workshop.

Flaccavento helped organize a network in the Appalachian region of Virginia and Tennessee that has about 60 small and midsize fruit and vegetable growers who market two dozen fresh produce under the Appalachian Harvest brand to nearly 600 supermarkets. The group operates a 15,000 sq. ft. processing and storage facility and uses two delivery trucks.

“Moving to fruit and vegetables or a new kind of meat product sounds like an enormous risk – but we’ve been able to fairly successfully reduce that risk with solid, good-sized markets, diversity of products and a lot of educational, technical and peer support.”

The workshop highlighted projects supported by the Leopold Center’s Marketing and Food Systems Initiative and the Value Chain Partnerships project. Listen to Flaccavento’s presentation and get workshop materials on the workshop web site.

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The Leopold Center coordinated an effort that documents potential economic values from increasing production and marketing of fruit and vegetables in the upper Midwest to help meet consumer demand for locally grown food.

The new study, “Selected Measures of the Economic Values of Increased Fruit and Vegetable Production and Consumption in the Upper Midwest,” was conducted by Iowa State economics researcher David Swenson. He considered two scenarios and used data from Iowa, Illinois, Indiana, Michigan, Minnesota and Wisconsin. The Leopold Center has worked with Swenson to do similar analyses for Iowa and multi-county areas in northeast, southwest and southeast parts of the state.

“This is the first multi-state study in the Midwest to examine potential economic benefits from increased regional fruit and vegetable production and marketing,” said Center associate director Rich Pirog, who coordinated the work with regional partners. “Since the same assumptions were made across all of the states in the study, we can examine both state-level and regional potential economic values.”

In the first scenario, increased production of 28 fruit 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 gains also could be significant, compared to the number of jobs currently generated by the same amount of land under conventional agricultural production.

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.

One of the key assumptions in the study was that farmers in the region could grow enough of 28 kinds of fruits and vegetables to meet consumer 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.

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.

The study indicated that Iowa would need 98 establishments that would employ 672 people. The study included a second scenario that looked at 28 metropolitan areas in the six-state region with populations that exceed 250,000. 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.

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.

Swenson’s work was funded primarily by a Leopold Center competitive grant. 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.

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