Author: Taylor Thompson, MS Student, Purdue University Department of Agricultural Economics
Dr. Nicole Olynk Widmar, Associate Head and Professor, Purdue University Department of Agricultural Economics
In the not-too-distant past, buying local wasn’t a trend — it was just the way we lived. Common practice for the human existence was to grow, hunt or gather what you could in your local geographical location and climate. However, in recent decades, we have truly been spoiled by the riches of a global supply chain.
Today, our grocery stores and restaurants are filled with options — so much so that many of us have lost the wonder of seeing things like caught-today seafood made available in rural Kansas or coffee basically anywhere in the U.S. Instead, we are now seeing a movement that seeks to “get back to old ways”. Statements similar to this have some appeal as many of these nostalgic preferences are admirable; however, some may lack understanding of what these nostalgic preferences entail.
We aren’t here to tell you what to buy, as purchasing decisions are made individually and there are many factors to consider. With that being said, below are five commonly raised points in the spirit of costs and benefits or tradeoffs to consider when thinking about the recent pandemic-accelerated nostalgia — and market — for local.
Some of the tradeoffs associated with buying local are quite fuzzy and highly personal in terms of whether or not benefits outweigh costs, but common points of contention arise around a few questions:
1. Does local mean smaller?
We love the idea that a small business/operation can find its place in the market. Many people agree that it is important to support small businesses. The problem here is that what “small” means is as blurry as what constitutes as “local”.
First, what is local? In a recent (available for download) publication “There’s No Place Like Home”: Inquiry into Preferences for Local Foods, we identified definitions of local for a nationally representative sample of n=1,200 U.S. residents, finding that “from one’s own county” was most common, followed by “home county and neighboring counties” and “within 100 miles from home”.
* Image originally appeared in Bir, Courtney & Lai, John & Widmar, Nicole Olynk & Thompson, Nathanael & Ellett, Jodee & Crosslin, Caroline, 2019. ““There’s No Place Like Home”: Inquiry into Preferences for Local Foods,” Journal of Food Distribution Research, Food Distribution Research Society, vol. 50(1), March.
A number of other studies have sought to understand the definition of local using miles from home, state or county lines, as well as a variety of other measures. Closer to home (as opposed to the further away options presented) seems to be the answer in most cases, but the lines of what’s considered local are quite blurry overall.
What I perceive as small might not qualify as small in someone else’s mind or may even change depending on the specific industry or geographic location. USDA statistics show 90% of U.S. farms, accounting for 22% of production, are classified as “small” with gross cash farm income less than $350,000 (for comparison, 2.7% are large-scale with gross cash farm income between 1 and 4.9 million dollars, accounting for 43.8% percent of production). While we might seek to define “small” and “local”, the idea that a business is smaller because it is local does not necessarily pan out. From a research standpoint, our interest lies in attempting to help discern whether it is a desire to buy local, a desire to buy from small businesses, or potentially both. But it’s important to consider that local doesn’t necessarily mean small and small doesn’t necessarily mean local.
2. Is local better for the environment?
It is very common to hear about the environmental benefits of buying local, but two points to remember and disentangle are production and transportation. These two areas are highlighted in the GHG emissions discussions for the agriculture industry. The vast majority of GHG emissions come from production, not transportation. Transportation accounts for roughly 10% of agricultural product emissions.
In truth, the environmental aspects of production are wide and varied far beyond anything we can contribute to meaningfully in a list of points. For starters, what product are we talking about and where do you live? If you are buying sweet corn in Indiana, then local may be better for the environment (assuming production practices are employed to take environmental impacts into account) as we’re well-suited to produce it (we have a comparative advantage) and you could limit the transportation. But it is not a given that local is better for the environment as there are a multitude of factors to consider, including whether the item can be produced with lesser inputs or impact elsewhere. There are a variety of farm-specific, supply chain-specific, product-specific and consumer-specific factors that go into the total environmental cost of a food item. As pointed out by Jayson Lusk and Bailey Norwood, whether local product X (or basket of goods A) is more environmentally friendly than local product Y (or basket of goods B) is an empirical question. It’s complicated and (unfortunately) isn’t as simple as selecting one single production system as superior.
3. Does local meet the standards of a diversified diet? More simply put — can you get everything you want produced locally?
Which diet is best? Raw? Vegan? Keto? The number of potential diets is seemingly endless these days. No matter the diet you choose, variety is typically considered important, if not nutritionally then by human preference. You can get local milk in Wisconsin, but not bananas. I can get plenty of local sweet corn in Indiana at harvest time, but no local oranges. Buying local cannot match the variety, volume and efficiency of the modern supply chain as outlined in “The Locavore’s Dilemma: Why Pineapples Shouldn’t Be Grown in North Dakota” by Jayson Lusk and Bailey Norwood. Now, whether where you live or what you consider local to where you live has enough variety of production to satisfy your own desires for variety, taking into account seasonality and all of your own preferences for other production processes or product attributes, is up to you.
4. What do demographics have to do with buying local?
People sure do like to talk about millennials and what they’ve done or not done to society. The millennial generation, in particular, has been at the forefront of the local movement. Blend this with modern social media and trends become widely adopted at speeds never seen before. But don’t forget that millennials also happen to be 25 to 40 years old in 2021, which is prime time for rising incomes due to having progressed in their careers, having families, feeding kids and generally having the tools and time to invest in things like cooking/eating. So, indeed, the millennials are at the forefront of a lot of buying decision discussions today. Are they the cause of interest in local foods rising? Maybe, but correlation isn’t causation, and there are lots of factors in play. Of course, we always have interest in who is buying what and why because it contributes to our understanding of the market, but we can’t confuse that universal interest with having found ‘the explanation’ for a growing interest or societal trend.
5. What has COVID-19 taught us (so far)?
From a market standpoint, you can’t discuss COVID-19 without mentioning the food supply chain. Some things you may hear: “It broke down,” or, “It needs a complete overhaul.” Local has been posited as the answer for some as local meat processing was overwhelmed with demand early in the pandemic. If we take a retrospective look at the supply chain during the pandemic-era, we find a series of systems that strained and then rallied to keep quality products on shelves at reasonable prices. However, this isn’t to say there weren’t some painful times…
Food for thought (excerpt from ConsumerCorner.2020.Letter.13): Knowing what we know now, one may suggest that agricultural and food supply chains do some introspective thought about resiliency versus redundancy. To what degree have we lost resiliency in the system by attempting to reduce redundancies and gain efficiency?
Taking all of the evidence together, and with the benefit of time, the food system in the U.S. has proven to have more resiliency than it was given credit for in some of the earlier COVID-19 lockdown days. Granted, this does not mean there isn’t room for improvement by firms involved in the food chain. There is always room for improvement, and many firms are already making investments in resiliency. This also does not mean there isn’t room for the possibility of regulation and/or legislation to force practices/investment to improve resiliency. Indeed, there were rough days when shoppers couldn’t get what they wanted, and there were times of obvious cause for concern as the system strained to keep up.
While everyone has faced, and continues to face, pressure in the COVID-19 economy and era, the food system in the U.S. has provided safe and plentiful (mostly) product in the locations where it was demanded (mostly) at the time it was demanded.
Was selling local extremely valuable to many producers during COVID-19? Yes. Was buying local extremely valuable to many consumer during COVID-19? Yes. Does this mean local systems are inherently superior? No.
Taken all together, local production, processing and sale is a valuable and sought after production process attribute of a variety of food items for many people. However, there are tradeoffs among attributes and goods, and no system is inherently superior. Given the tradeoffs inherent in each of the points above, this ultimately boils down to a consumer’s preference or choice when buying. There isn’t a ‘right answer’, there’s just ‘your answer’ (and your answer likely changes depending on the day, time, price and product).
ConsumerCorner.2021.Article.08
