Economic impacts on U.S. vendors, businesses, and consumers
Farmers' markets directly impact
vendors,
businesses, and
consumers. Farmers' markets influence these individuals through
vendor revenue and
sales, the income
multiplier effect, local
business incubation,
employment, and
consumer preferences. Many studies concentrate on the impact of farmers' markets on vendors, businesses, and consumers because farmers' markets are a local phenomenon whose effects are most observable at the community or individual level. This section differs from the previous section that highlighted some
state and
municipal studies because it provides a summary of the general impacts almost all state and municipal studies measure.
Impact on total vendor sales Farmers' markets generate significant economic benefits to farmers' market
vendors. A study shows that vendors who participated in nine
markets throughout
urban centers like
Baltimore and
Los Angeles collectively earn $52,000 to $40,594,000 per year from
sales. Kamm's Corners Farmers Market, the
median market studied, generated $1.8 million per year for vendors. Vendors value the
net profits derived from the
market, as almost
half of the vendors
surveyed in a study on Iowa's farmers' markets indicated that they would incur a significant loss if farmers' markets were to close down.
Impact on vendor revenue Vendors generally make more money by selling their
products to the local
community than by selling them to a
wholesaler for use in the conventional
food system. One study found that
vendors and food
producers were able to retain almost, if not all, of the
revenue from the sale of their product on the local
market. Vendors may receive up to "seven times greater net
revenue on a per unit basis" in the local market than in the conventional market. It is also easier for vendors at farmers' markets to gauge consumer
demand and
price their products accordingly because they are able to interact directly with the
population that they serve.
Impact on vendor incentives Vendors who participate in farmers' markets usually have another, often primary form of
employment. So, selling their goods at the market is usually a residual use of their time. One study suggests that participating in farmers' markets may reduce the
incentives of small
farm growers to expand their farms and become more
efficient because they must dedicate significant time to
marketing activities. This suggests that vendor
profits may not increase by as much as they could due to the time dedicated to marketing.
Income multiplier effect Beyond the direct effects on vendors, farmers' markets also produce indirect effects. Farmers use the sales that they garner from the
market to purchase
fertilizer,
seeds, and other
inputs of production from
businesses. This type of
transaction has income
multiplier effects, meaning that farmers' markets not only impact vendor
income, but also impact the
incomes of businesses linked to the
production of
commodities sold at the
markets. A study focusing on Iowa farmers' markets showed that $12.2 million worth of business
income was due to farmers' market-related transactions among vendors. Another study found that almost all of the "wage and business proprietor income in local food supply chains is retained locally."
Local business incubation Farmers' markets can support local
businesses. A 2002 study found that sixty percent of
consumers at farmers' markets also visited
stores surrounding the market on the same day. Sixty percent of those consumers also indicated they only visited stores surrounding the farmers' market on days that they visited the market. Another study supports these findings and showed that an "overwhelming majority" of customers at farmers' markets also visited at least one nearby store. Additionally, the farmers' market itself provides a space for local and small
farm growers to innovate and respond directly to consumer demand. Sweet Briar Farms in
Eugene,
Oregon began selling
pork cuts at the
Eugene and
Portland farmers' markets in 2000. In the last ten years, the company has expanded to producing
bacon and
sausage as well as
spices,
sauces, and
rubs. The company now has 25
workers and is one of the biggest
pork providers in the
Willamette Valley of
Oregon. The company credits much of its success to the ability to sell new, experimental products at farmers' markets.
Job creation A study of Iowa's farmers' markets showed that 140 jobs were created in a single year that could be attributed to farmers' market activity. One study showed that 5.4 jobs were created per farmers' market. This figure was used to suggest that public
funding of 100 to 500 'otherwise-unsuccessful' farmers' markets per year could generate 13,500 jobs in five years. graph shows that direct-to-consumer sales have "outpaced" total agricultural sales.
Impact on consumers Farmers' markets address local
consumer demand and
preferences. The number of farmers' markets in the United States has grown from 340 in 1970 to 7,000 in 2011. There are also over 4,000
CSAs in the United States, which shows that consumers want to buy local
food. Consumers that go to farmers' markets generally seek to support local farms and businesses and also seek to buy food that is
healthy and
sustainably produced. Recent national
data show that eighty-two percent of consumers go to farmers' markets to get fresh
produce, seventy-five percent go to support the local economy, and fifty-eight percent patron these markets because they want to know the source of the products they buy. Farmers' markets serve a
demand not satisfied by the mass-produced and consolidated methods of production of the United States food system. Consumers also benefit from increased information, because they can learn about where the food they buy comes from by speaking with farmers at the market. ==Economic impact obstacles==