[Market-farming] economic impact of farmers' markets

JOHN A HENDRICKSON jhendric at wisc.edu
Mon May 16 02:41:52 EDT 2005

I thought the following would be of interest.  -John


Farmers' markets not only are a great place to get fresh produce, flowers 
and baked goods, they also may generate an estimated $20.8 million in 
sales and more than 325 jobs for the Iowa economy.

These figures are from an economic analysis prepared for the Regional 
Food Systems Working Group (RFSWG) led by the Leopold Center for 
Sustainable Agriculture. To do the analysis, Iowa State University 
economist Daniel Otto and graduate student Theresa Varner used 
information collected during the 2004 market season for the Iowa 
Department of Agriculture and Land Stewardship (IDALS) and the Iowa 
Farmers' Market Association (IFMA).

"There's more hidden economic value in Iowa's farmers' markets than meets 
the eye," said Rich Pirog, who directs the Leopold Center's Marketing and 
Food Systems Initiative and the regional foods group. "Farmers' markets 
and other efforts that support locally grown and processed foods have a 
positive impact on the regional economy."

Iowa Secretary of Agriculture Patty Judge, whose office promotes and 
provides educational venues for Iowa's Farmer's Markets, states that, 
"Farmers' markets continue to be the number one marketing channel for 
Iowa's vegetable and fruit growers. Supporting Iowa's farmer's markets is 
a 'win' for all of us matching Iowa farmers with Iowa consumers."

In 2004, Iowa had around 160 farmers' markets, the highest per capita in 
the nation. At least 55,000 people went to a farmers market every week, 
with total seasonal attendance set at 135,000. An additional 12 markets 
are expected to open in 2005.

Based on interviews with more than 4,500 customers, these markets 
generated $20.8 million in total sales in 2004. Those sales, in turn, 
resulted in an additional $12.2 million of economic activity, of which 
$4.3 million represents the supplies and services purchased by vendors 
and growers, and $7.2 million in induced (payroll) effects. The analysis 
showed that farmers' markets represent an estimated 325 jobs in Iowa, 
plus an additional 146 full-time jobs created by the secondary impacts of 
the farmers' markets.

The economic impacts of year's bustling farmers' market season in Iowa 
were estimated using an economic input-output model. The model uses 
purchases and sales of commodities between industries, businesses and 
consumers to estimate additional secondary impacts in a regional economy.

"This study really shows the multiplier effect of farmers' markets in a 
community," said Virginia Gieseke of Des Moines, who manages the Drake 
Neighborhood Farmers Market and is a member of the RFSWG and IFMA. "But 
farmers' markets have many other impacts that cannot be measured, such as 
the ability to gather people in a community and provide fun and 
educational activities."

To gather the consumer information, trained enumerators interviewed 
approximately 10 percent of the customers at 161 farmers' markets in 
Iowa. Customers were interviewed at the beginning, middle and end of the 
summer to account for differences in the markets during the growing 
season. Questions included the number of times they visited the market, 
average cost of their purchase, and type of products purchased.

The average customer was 51 to 65 years old, and visited the market 13 
times during the standard 21-week season. Customers spent $11-$20 per 
visit, and more than 80 percent bought fruits and vegetables and 40 
percent purchased baked goods.

The report, 
”Consumers, Vendors and the Economic Importance of Iowa Farmers'
Markets," is available on the RFSWG web site, www.valuechains.org, or by
contacting project director Rich Pirog, (515) 294-1854.

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