Direct and Intermediated Marketing of Local Foods in the United States
by Sarah A. Low
and Stephen Vogel
Economic Research Report No. (ERR-128) 38 pp, November 2011
What Is the Issue?
Despite increased production and consumer interest, locally
grown food accounts for a small segment of U.S. agriculture. For
local foods production to continue to grow, marketing channels and
supply chain infrastructure must deepen. Information on U.S. local
food producers and their marketing channels, however, is
incomplete. New information on farmers that market foods locally
and the marketing channels they use presented in this report could
aid private- and public-sector efforts to support this sector of
the agricultural economy. This report uses the 2008 Agricultural
Resource Management Survey (ARMS) to explore farmers' use of both
direct-to consumer and intermediated marketing channels in selling
locally produced foods to consumers.
What Did the Study Find?
• Marketing of local foods, via both direct-to-consumer and
intermediated channels, grossed $4.8 billion in 2008-about four
times higher than estimates based solely on direct-to-consumer
• Farms marketing food commodities exclusively through
intermediated channels reported $2.7 billion in local food sales in
2008-over three times higher than the value of local foods marketed
exclusively through direct-to-consumer channels, and two times
higher than the value of local foods marketed by farms using a
combination of direct-to-consumer and intermediated channels.
• Small farms (those with less than $50,000 in gross annual
sales) accounted for 81 percent of all farms reporting local food
sales in 2008. They averaged $7,800 in local food sales per farm
and were more likely to rely exclusively on direct-to-consumer
marketing channels, such as famers' markets and roadside
• Medium-sized farms (those with gross annual sales between
$50,000 and $250,000) accounted for 14 percent of all farms
reporting local food sales in 2008. They averaged $70,000 in local
food sales per farm and were likely to use direct-to-consumer
marketing channels alone or a mix of direct-to-consumer and
intermediated marketing channels.
• Large farms (those with gross annual sales of $250,000 or
more) accounted for 5 percent of all farms reporting local food
sales in 2008. They averaged $770,000 in local food sales per farm
and were equally likely to use direct-to-consumer channels
exclusively, intermediated channels exclusively, or a mixture of
• Large farms accounted for 93 percent of the value of local
food sales marketed exclusively through intermediated channels.
• For small and medium-sized farms with local food sales, more
operators identified their primary occupation as farming and
devoted more time to their farm operation than operators of
similarly sized farms without local sales. Vegetable, fruit, and
nut farms dominated local food sales.
• Direct-to-consumer sales of food commodities were affected by
climate and topography that favor fruit and vegetable production,
proximity to farmers' markets and neighboring local food farms, and
access to transportation and information networks.
• The value of locally sold food is highest in metropolitan
areas and is geographically concentrated in the Northeast and on
the West Coast.
How Was the Study Conducted?
We used the 2008 ARMS data to analyze farmers' use of specific
direct-to-consumer marketing channels (i.e., use of roadside
stands, farmers' markets, onfarm stores, and community-supported
agriculture arrangements) and intermediated marketing channels
(i.e., farmers' sales to local retail, restaurant, and regional
distribution outlets), but also farm characteristics and the value
of sales for farmers engaged in local food sales. Data from the
2007 Census of Agriculture supported the spatial econometric model
used to identify determinants of direct-to-consumer sales.