United States Department of Agriculture

A report summary from the Economic Research Service

ERS is a primary source 

of economic research and 

analysis from the U.S. 

Department of Agriculture, 

providing timely information on economic and policy 

issues related to agriculture, 

food, the environment,and 

rural America. www.ers.usda.gov

Report to Congress

Economic

Research

Service

Administrative 

Publication

Number 068

January 2015

United States Department of Agriculture

Trends in U.S. Local and 

Regional Food Systems

January 2015

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Sarah A. Low, Aaron Adalja, Elizabeth Beaulieu, Nigel Key, Steve Martinez, 

Alex Melton, Agnes Perez, Katherine Ralston, Hayden Stewart, Shellye Suttles, 

Stephen Vogel, and Becca B.R. Jablonski

Trends in U.S. Local and Regional 

Food Systems: A Report to Congress

What Is the Issue? 

This is a congressionally mandated report, written at the request of the House Agriculture 

Committee as a part of the Fiscal Year 2014 Appropriations Bill, in January 2014. The Committee 

directed the Economic Research Service (ERS) to provide a report assessing the scope of and 

trends in local and regional food systems and to make it publicly available on the ERS website. 

Local food has been the subject of Federal, State, and local government policy in recent years 

as consumer interest in and demand for local foods has grown. Because local foods have been 

linked to the full suite of USDA priorities—including enhancing the rural economy, the environment, food access and nutrition, informing consumer demand, and strengthening agricultural producers and markets—up-to-date information is critical for understanding the evolution 

and effects of local and regional food systems across the country.

What Did the Study Find?

Producer participation in local food systems is growing, and the value of local food sales, 

defined as the sale of food for human consumption through both direct-to-consumer (e.g., 

farmers’ markets) and intermediated marketing channels (e.g., sales to institutions or regional 

distributors), appears to be increasing.

• In 2012, 163,675 farms (7.8 percent of U.S. farms) were marketing foods locally, defined 

as conducting either direct-to-consumer (DTC) or intermediated sales of food for human 

consumption, according to census of agriculture data. Of these farms, 70 percent used only 

DTC marketing channels, which include farmers’ markets and community supported agriculture (CSA) arrangements. The other 30 percent used a combination of DTC and intermediated channels or only intermediated channels. 

• The number of farms with DTC sales increased by 17 percent and sales increased by 32 

percent between 2002 and 2007; however, between 2007 and 2012 the number of farms 

with DTC sales increased 5.5 percent, with no change in DTC sales. That DTC sales did not 

increase may be due to plateauing consumer interest or to growth in non-direct sales of local 

food (i.e., local food sold through intermediated marketing channels like grocery stores or 

institutions), the value of which is not measured by the census of agriculture. 

• Agricultural Resource and Management Survey (ARMS) and census of agriculture data indicate that local food sales totaled an estimated $6.1 billion in 2012. This is only an estimate 

because neither data source collects complete information on the value of intermediated sales.

• Farms with gross cash farm income below $75,000 accounted for 85 percent of local food 

farms in 2012, according to census data. These farms are estimated to account for only 13 
percent of local food sales. Local food farms with gross cash farm income above $350,000 accounted for 5 percent 

of local food farms and 67 percent of sales.

• Farms selling local food through DTC marketing channels were more likely to remain in business over 2007-12 

than all farms not using DTC marketing channels, according to census of agriculture data. Farms with DTC sales 

tended to experience smaller increases in sales than all other farms, however.

• It is difficult to draw conclusions about the local economic impact of local foods systems because the existing 

literature has narrow geographic and market scope, making comparing studies complicated. Data necessary to 

conduct economic impact analyses are costly to obtain, and researchers have yet to agree on a standard way of 

accounting for the opportunity costs involved when local foods are produced and purchased or on a standard set of 

economic modeling assumptions. Many questions surrounding the economic impact of local foods remain unanswered and could be addressed by future research (e.g., Are local food systems good for the rural economy? Might 

the economic benefits of expanding local food systems be unevenly distributed?)

The Food Safety Modernization Act (FSMA) calls for sweeping changes to the U.S. food safety system. Regulatory 

focus shifts from response (to contamination) to prevention in order to ensure that the U.S. food supply is safe. This 

will be the first time that the U.S. Food and Drug Administration (FDA) will have jurisdiction over onfarm activities, 

and FSMA will impose relative uniformity of standards across suppliers of fresh produce. Currently, food safety in 

produce is a hodgepodge of decisions by individuals, grower organizations, buyers, and governments that can vary by 

farm size, commodity, region, and country. 

• Although FSMA was passed in 2011, the rulemaking process for FSMA is ongoing and will ultimately include 

numerous new rules (i.e., regulations) and guidance documents.

• Both the proposed Produce Safety Rule and the proposed Preventive Controls Rule may affect local food farmers; these 

rules build on prevailing voluntary food safety guidelines. DTC farms apply more manure than all non-DTC farms and 

thus could be disproportionately affected by any FSMA regulations on the application of biological soil amendments.

Understanding who buys local foods and why is valuable for targeting marketing efforts by producers, grocery stores, 

restaurants, and others needing information on consumer demand for local food. ERS analysis of the USDA Farm to School 

Census, 2011-2012, finds farm to school programs exist in more than 4 out of 10 school districts across the country.

ERS analysis of 2006 Nielsen Homescan data finds that selected produce prices at DTC outlets are generally lower, on 

average, than prices at retail stores in all seasons. Nonetheless, DTC food prices for some product/location combinations were higher than retail store prices. 

We draw no conclusion on whether local food production has a different environmental impact but do present some 

information about environmental practices of farms with and without DTC sales and synthesize literature on the nexus 

between the environment and local/regional food systems. 

Many States and localities are supporting local food system development. While this report does not inventory such 

activities, we highlight some programs going on at the regional level. Collaboration is a common theme. Communities 

appear to be leveraging both Federal and State programs, while also partnering with nonprofits, the private sector, and 

other government entities.

Federal policies related to local and regional food systems were greatly expanded by the Food, Conservation, and 

Energy Act of 2008, and are further expanded in the Agricultural Act of 2014, which strengthened support for intermediated marketing channels. 

How Was the Study Conducted? 

This report draws on USDA surveys, censuses, and statistical analyses as well as the available academic literature to 

provide the latest information on the economics of local and regional food systems. Specifically, this report uses the 

latest (2012) Census of Agriculture data to describe local food producer characteristics, geography, and farm business 

survival and growth rates. This report also uses the ERS/NASS Agricultural Resource Management Surveys from 

2008 to 2011 to provide a larger sample of local food farms than previous research. The report also summarizes findings from the 2011-12 USDA Farm to School Census. We believe this report is also the first to present a nationally 

representative comparison of produce prices at direct and conventional retail outlets; for this analysis we use 2006 

Nielsen Homescan data. 

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