Leopold Center - Study shows farmers' markets boost Iowa economy

Farmers’ markets not only are a great place to get fresh produce, flowers and baked goods, they also may generate an estimated $20.8 million in sales and more than 325 jobs for the Iowa economy. Lonna Nachtigal sells greens at the Downtown Ames Farmers Market.

Lonna Nachtigal sells greens at the Downtown Ames Farmers Market.

These figures are from an economic analysis prepared for the Regional Food Systems Working Group (RFSWG) led by the Leopold Center. To do the analysis, Iowa State University economist Daniel Otto and graduate student Theresa Varner used information collected during the 2004 market season for the Iowa Department of Agriculture and Land Stewardship (IDALS) and the Iowa Farmers’ Market Association (IFMA).

“There’s more hidden economic value in Iowa’s farmers’ markets than meets the eye,” said Rich Pirog, who directs the Center’s Marketing and Food Systems Initiative and the regional foods group. “Farmers’ markets and other efforts that support locally grown and processed foods have a positive impact on the regional economy.”

In 2004, Iowa had around 160 farmers’ markets, the highest per capita in the nation. At least 55,000 people went to a farmers market at least once, with total seasonal attendance set at 135,000. An additional 12 markets were expected to open in 2005.

Based on interviews with more than 4,500 customers, these markets generated $20.8 million in total sales in 2004. Those sales, in turn, resulted in an additional $12.2 million of economic activity, of which $4.3 million represents the supplies and services purchased by vendors and growers, and $7.2 million in induced (payroll) effects. The analysis showed that farmers’ markets represent an estimated 325 jobs in Iowa, plus an additional 146 full-time jobs created by the secondary impacts of the farmers’ markets.

The economic impacts of the year’s bustling farmers’ market season in Iowa were estimated using an economic input-output model. The model uses purchases and sales of commodities among industries, businesses and consumers to estimate additional secondary impacts in a regional economy.

“This study really shows the multiplier effect of farmers’ markets in a community,” said Virginia Gieseke of Des Moines, who manages the Drake Neighborhood Farmers Market and is a member of the RFSWG and IFMA. “But farmers’ markets have many other impacts that cannot be measured, such as the ability to gather people in a community and provide fun and educational activities.”

To collect the consumer information, trained enumerators interviewed approximately 10 percent of the customers at 161 farmers’ markets in Iowa. Customers were interviewed at the beginning, middle and end of the summer to account for differences in the markets during the growing season. Questions included the number of times they visited the market, average cost of their purchase, and type of products purchased.

The average customer was 51 to 65 years old, and visited the market 13 times during the standard 21-week season. Customers spent $11-$20 per visit, and more than 80 percent bought fruits and vegetables and 40 percent purchased baked goods.

RFSWG is part of the Value Chain Partnerships for a Sustainable Agriculture (VCPSA) project funded in part by a grant from the W.K. Kellogg Foundation.

The report, “Consumers, Vendors and the Economic Importance of Iowa Farmers’ Markets,” is available on the RFSWG web site, www.valuechains.org, or by contacting Rich Pirog, (515) 294-1854.