The Benefits of Farmers’ Markets 

By 

Dr. Al MylesEconomist and Extension Professor

Department of Agricultural EconomicsMississippi State University

Presented at the 2008 Farmers’ Market Conference AFMA Annual meeting, Jonesboro, Arkansas

February 28 – 29, 2008

Introduction

Farmers’ markets create and support sustainable agricultural and community life by enhancing farms, businesses, families, and communities.

Farmers’ markets demonstrate ways of collaboration among citizens, private enterprise, and government for the common good of the community (Myles, et al, 2004).

Advantages of a Farmers Market

• Low Start up Cost-Most markets are located in a good area-Fees for a selling space is minimal-Zoning and local license generally not a problem-Little or no packaging is required-All you need is a creative display and a truck

Advantages of a Farmers Market

• Publicity for Your Farm

-Allows you to interact with customers

-Educate customers about your farm and things you grow

-Pitch your products to the public

-Promote other aspects of your business, such as pick-your-own, roadside stand, or agri-tourism activity

• Customer/Farmer Feedback

-Customer feedback is almost immediate

-Customers are your link to market trends and demands

-You can experiment with new crops or marketing ideas on a limited basis

-Other vendor/farmer networking can help you with marketing ideas, growing techniques and value-added products

Source: Wise, 2006

Farmers’ Markets Growth

Since 1994, farmers’ markets have grown 18.32 percent in the U.S. (Figure 1).

Figure 1.

Source: http://www.ams.usda.gov/farmersmarkets/FarmersMarketGrowth.htm

Farmers Markets (2004) Number

Arkansas 28Alabama 72Louisiana 20Mississippi 18Missouri 96Oklahoma 35Tennessee 46 

SOURCE: USDA Agricultural Marketing Service, selected states.

Market Profile• A 2002 United States Department of Agriculture (USDA) study found:

-That almost 2.8 million customers visited these facilities per week for an estimated 14 million visitors in 2002.

-The average farmers’ market operated about 2 days per week and received produce from farms averaging 1.38 acres.

-Most growers (88%) participating in a farmers’ market lived less than 50 miles from the facility.

-The average farmers’ market customer in the U.S. Spent $17.50 per week or $306 dollars per year at these facilities in 2002 (USDA report).

-About 95 percent of consumers lived less than 50 miles from the facility and about 67 percent lived less than 10 miles from the facility.

-The typical farmers’ market averaged 1,055 customers in 2000.

General Benefits of Farmers’ Markets

• Farmers’ markets provide CONSUMERS with fresh produce, taste, appearance and nutritive value for their limited food dollar.

• Farmers’ markets are effective at keeping food dollars in a given region, helping to keep small producers in business.

• Farmers’ markets help PRODUCERS to receive higher prices by removing the broker and selling directly to the consumer.

• The communities in which farmers’ markets operate benefit from more money spent in the local economy, creating spending, re-spending, and higher multiplier effects in the area (Myles, 2004).

• “They tend to draw people DOWNTOWN that otherwise would not be there. Many of these people, as well as vendors, will then shop in the surrounding stores because they are convenient.” (Abel, Thomson, and Maretki, 1999)

• Farmers’ markets can improve the attractiveness of the local area in which they operate.

• They display local good and services and show the diversity of talent of local chefs, artists, and growers,further exposing visitors to the community (Myles, 2004).

Economic Potential

The potential for fruit and vegetable sales from farmers’ market facilities is strong since most customers no longer grow their own produce.Average Household Expenditure on Fresh Fruits and Vegetables by Selected States in US

State 2003 ($) 2008 ($) % Change

AlabamaArkansasLouisianaMississippiMissouriOklahomaTennessee

303305316302327322325

329331340327356349354

8.588.527.598.288.878.398.92

SOURCES: USDA and CLARITAS, Inc. © 2004

Figure 2. Average Annual Fruit and Vegetable Expenditures , 1999 to 2005

0

100

200

300

400

500

600

700

99 00 01 02 03 04 05

Year

Dollars

U.S.

Northeast

Midwest

South

West

Source: http://www.bls.gov/cex/home.htm

State

Number of Households

Number of

F&V Farms1

Average Annual F&V

Expenditure

Average Household

Expenditure

(South) 2

Estimated Household

Expenditure 3

Average Farm Income

(F&V) 2

Average Farm

Income

(F&V 3

Alabama 1,737,080 2,955 329$ 253,613,680 57,149,932$ 85,825$ 19,340$

Arkansas 1,042,696 1,115 331 150,148,224 34,513,238$ 134,662 30,954

Louisiana 1,656,053 1,545 340 223,567,155 56,305,802$ 144,704 36,444

Mississippi 1,046,434 1,904 327 154,872,232 34,218,392$ 81,340 17,972

Missouri 2,194,594 1,709 356 261,156,686 78,127,546$ 152,813 45,715

Oklahoma 1,342,293 2,664 349 169,128,918 46,846,026$ 63,487 17,585

Tennessee 2,232,905 2,319 354 270,181,505 79,044,837$ 116,508 34,086

2/ Average F&V expenditures if Mississippi households spent at the southern level ($475 in 2005).1/ Figure represents the total number of vegetable, melon, potatoe, fruit, tree nut, and berry growers in state

3/ Based on 10 percent increase over 2008 average fruit and vegetables expenditures in selected states.

Example

Total Income Impact = Average Number of Weekly Customers x Customers’ Average Weekly Expenditure X Number of Weeks in a Month x Number of Operating Months x Percent of market operating days in a week (%) x Income Multiplier

= 1,055 x $17.50 x 4 x 4 x .428 x $2.66= $336,307

These are based on national statistics. If one assumes their state would average about 75 percent of the U.S. or $225,230 annually for a farmers’ market.

Even with such positive returns to the community, most of these facilities will need government help since, on average, only one in 5 will be self-sufficient.

Why Should the Government and Economic Development Officials Care?

Farmers’ markets provide major benefits to local communities engaged in economic development.

Both vendors and consumers will spend part of their weekly incomes and other businesses in the local community benefit because of increased customer traffic in the trade area.

Information about the multiplier effects of farmers’ markets, the average daily amount spent by consumers, and the average number of visitors allows local authorities to project direct and indirect impacts associated with the establishment of a farmers’ market in the area.

Access and Viability

-Help connect farmers to community economic development officials to select a site that is best suited for everyone concerned.

-Encourage market vendors to diversify their offerings and to produce and sell value-added products such as baked goods, cheese, meat, eggs, honey, cider, fresh and dried flowers, jams and other preserves, and plants.

-Contribute to the success of farmers’ markets in low-income areas is by encouraging the dissemination of Women, Infants and Children (WIC) Farmers’ market Nutrition Program (FMNP) coupons.

Summary

Rural area, in general, continue to experience tough economic times and lag behind their urban counterparts in poverty levels, income, employment, education and other indicators of well-being.

Although farmers’ markets are not a panacea for economic growth, local development officials can play a major part in supporting these facilities.

REFERENCES Myles, Albert E. “Benefits of Farmers’ Markets.” Extension Professor. Department of Agricultural Economics. Mississippi State University (Special presentation). Wise, Shelaine and Stanley G. Wise. “Selling In A Farmers Market”. County Extension Director II. Prentiss County. Mississippi State University Extension Service, 2006. Abel, Jennifer. Joan Thompson, Audrey Marretzki. “Extension's Role with Farmers' Markets: Working with Farmers, Consumers, and Communities.” Journal of Extension. Vol. 37, Number 5, October 1999. USDA, Agricultural Marketing Service. Website. http://www.ams.usda.gov/farmersmarkets/FarmersMarketGrowth.htm