The Economic Impact of Increasing Production of Healthy food for Regional Markets

The Leopold Center for Sustainable Agriculture continues to kick out strong, timely research. In March 2010 the center released Selected Measures of the Economic Values of Increased Fruit and Vegetable Production and Consumption in the Upper Midwest. From the executive summary:

Two separate analyses were conducted. The first provides state-only estimates where the economic values are compiled considering each state’s farmers and each state’s consumption as a distinct and closed study area. The second analysis evaluates individual counties within the six-state region considering both their capacity and potential to produce fresh fruits or vegetables to serve medium to large metropolitan regional markets with populations in excess of 250,000 persons. This second analysis is indifferent to state boundaries.

Both research scenarios also presuppose that 50 percent of the local fruit and vegetable production will be marketed via producer-owned fruit and vegetable stores. The economic values of those activities also are partially estimated.

These are the relevant findings:

Under the first scenario:

* 270,025 cropland acres would be needed to produce the partial-year demands of 28 fresh fruits and vegetables in the six-state region. That is roughly equivalent to the average amount of cropland in one of Iowa’s 99 counties. Those acres would produce $882.44 million in farm-level sales, which would be worth $3.31 billion when sold at retail.
* Considering all industrial linkages, farm-level production would result in 9,302 total jobs region-wide, earning a total of $395.12 million in labor incomes.
* The land required to produce those fruits and vegetables would have to come from conventional agriculture as the amount of cropland is fixed. Considering all industrial linkages, corn and soybean production on those same acres supported 2,578 jobs and $59.12 million in labor incomes.
* If 50 percent of that production were sold via producer-owned markets, the region would need a total of 1,405 establishments staffed by 9,652 jobs earning $287.64 million in labor incomes.

Under the second scenario:

* The 28 metropolitan markets would require 195,669 fruit and vegetable acres to produce $637.44 million in farm-level sales.
* Considering all relevant multipliers, that farm-level production would support 6,694 jobs and $284.61 million in labor income in the six-state area.
* The land required to produce those fruits and vegetables would have to come from conventional agriculture as the amount of cropland is fixed. Considering all industrial linkages, corn and soybean production on those same acres supported 1,892 jobs and $42.517 million in labor incomes.
* It would take 875 fruit and vegetable markets to distribute these crops using the producer-retailers in the metropolitan areas that are actually within the region, which would in turn support 6,021 jobs in those establishments earning $180.7 million in labor incomes.

Source: David Swenson, "Selected Measures of the Economic Values of Increased Fruit and Vegetable Production and Consumption in the Upper Midwest", Department of Economics, Iowa State University, March 2010, http://www.leopold.iastate.edu/research/marketing_files/midwest.html