Investigating the potential economic impacts of local foods for southeast Iowa

Investigating the Potential Economic Impacts of
Local Foods for Southeast Iowa

Analyzed by Dave Swenson
September 2009
Department of Economics, Iowa State University

This study was funded by Leopold Center Marketing and Food Systems Initiative
Competitive Grant M2009-07

Edited by Rich Pirog and Mary Adams
Leopold Center for Sustainable Agriculture

hometown harvest

Summary of Findings
This research study investigated the economic impacts of local foods production for the southeast Iowa region of Davis, Jefferson, Keokuk, Mahaska, Van Buren, and Wapello Counties. Local educators and community leaders in the region selected a set of eight fruits and vegetables and a set of meat products that could be locally produced. This analysis contrasts the regional income potential of eight locally produced items with an expanded list of 22 items that might be considered.

It is possible to gauge small area economic impacts under an import-substitution framework that replaces imported foodstuffs with locally grown foodstuffs. In this analysis, the locally grown foodstuffs are made available for their likely growing season, which in this case is limited primarily to three months. An addition to this analysis considers direct producer sales to consumers via regional marketing centers, as well as expanded small-scale meat production to accommodate locally produced meat product sales.

The major findings:

For fruit and vegetable production, the eight-item scenario would add 5.3 jobs and $215,350 in labor income to the regional economy after considering reductions to soybean and corn farming from which the acres for this production were obtained. For the 22-item scenario, the impacts would be 11.6 jobs with $475,870 in total labor incomes.
For direct sales of 50 percent of the locally produced fruits and vegetables, regional jobs would grow by 17.7 and labor incomes by 239,345. For the 22-item list, regional jobs would increase by 37.8 and incomes by $510,733.
If the region were to attain self-sufficiency in chicken and egg production (not consumption), the region would realize a 19.8 total gain in jobs and $653,466 in labor income.
Were the region to supply 25 percent of the chicken and eggs that regional consumers purchase for in-home consumption, the retail value would be $1.88 million.
If the region were to add small meat slaughtering and processing capacities to accommodate an increase in locally produced lamb/goat and poultry consumption, each locker plant would add 5.1 jobs to the region, as well as $178,937 in labor incomes.
In all, given the scenarios assessed in this study, local food production, retailing, and enhanced processing could create from 50 to 75 jobs divided between rural areas and communities.