Posted November 27, 2017
In 2015, the U.S. Department of Agriculture's (USDA) National Agricultural Statistics Service (NASS) set out to better understand local food markets in the U.S. by conducting a Local Food Marketing Practices Survey. This survey, which was the first of its kind, established baseline data on local and regional food market trends. The results were released in late 2016, showing that agricultural producers across the United States are selling billions of dollars worth of product to direct markets, including direct markets that reach institutional consumers.
FINE is dedicated to understanding and growing the farm to institution sector in New England. As such, we have analyzed the New England data from this survey and we are publishing it here so farm to institution stakeholders in our region understand what it says about local food markets – and in particular what it says about the intersection of local food and institutions like schools, colleges, and hospitals.
The USDA defines a directly marketed sale as “a sale made or an operation making a sale using one of the marketing channels that has only one or two stages between the site of production and the end consumer.” These direct markets include direct-to-institution, direct-to-consumer (e.g., farmers markets), direct-to-retailer, and direct-to-intermediary businesses (including food distributors, food hubs, and food processors who sell locally branded products). The Local Food Marketing Practices Survey provides a useful snapshot of how producers are marketing their products and how institutional markets measure up to other direct sales options like farmers markets, CSAs, and restaurants.
In this post, we will:
- Report direct sales made by producers in New England and the Northeast
- Explore how direct-to-institution markets compare to other types of direct markets in our region
- Compare data from our region to the rest of the country
- Examine how results from this new USDA survey align with FINE’s own research findings
- Propose ideas for additional research
Review of Direct Marketing Practices
Responding farms and ranches across the country reported selling $8.7 billion of food through direct marketing practices in 2015. Because direct sales, by definition, include less than two stages between production and consumer, these sales are often made within the same region in which they were grown. In fact, over 80% of respondents reported that they sold 100% of their directly marketed foods within 100 miles of its place of origin.
Across the New England states with available data, nearly $736 million in direct sales were reported by 9,928 operations . Operators in Vermont and Massachusetts made $229 million and $250 million in direct sales respectively, earning them a spot on the top 10 list of states in direct sales nationwide.
Unfortunately, while some data is available on the state level, most data is only available on the national or regional level (USDA divides the country into seven regions). All six New England states fall under “Region 2,” which also includes New York, New Jersey, Pennsylvania, Maryland, and Delaware. Figure 1 shows that Region 2 ranked second nationally for all direct farm sales and made up 22% of the U.S. total. (Region 1, which ranked first, includes California whose sales alone account for 33% of the U.S. total.)
Figure 1: Percentage of total direct farm sales by region. All six New England states fall under Region 2. Source: U.S. Department of Agriculture National Agricultural Statistics Service (2016). Direct Farm Sales of Food: Results from the 2015 Local Food Marketing Practices Survey
Of the total direct sales, nearly $3.4 billion (or 39% of total direct sales) worth of product was sold to institutions and intermediaries nationally. (Note: All available data for institutional sales are combined with intermediary sales, perhaps due to a lack of respondents reporting direct-to-institution sales.)
Data specific to institutional and intermediary sales are only available for New England states as part of reporting on Region 2 as a whole. Figures 2 shows the dollar amount of direct to institution/intermediary sales for Region 2 and Figure 3 shows the number of operations that reported those sales. While the region had a relatively low number of operations reporting direct-to-institution/intermediary sales compared to other regions (7,295), it ranked third in sales per dollar ($615 million). This shows that per operation, farms in the Northeast are selling more product to institutions and intermediaries than any other region except Region 1.
Figure 2: The map above shows the sales (in millions) that producers in each region made to institutions/intermediaries in 2015. Region 2, which includes all six New England states, ranked third in direct to institution/intermediary sales with $615 million in sales. Source: U.S. Department of Agriculture National Agricultural Statistics Service (2016). Executive Briefing: 2015 Local Food Marketing Practices Survey.
Figure 3: The map above shows the number of operations in each region who made sales to institutions/intermediaries. Region 2 had a relatively low number of operations making institutional/intermediary sales compared to most other regions (7,295 operations). This shows that per operation, farms in the Northeast are selling more product to institutions than any other region except Region 1. Source: U.S. Department of Agriculture National Agricultural Statistics Service (2016). Executive Briefing: 2015 Local Food Marketing Practices Survey.
Farm to Institution Metrics: Next Steps for the Region and the Nation
We at FINE believe that institutions have the power to mobilize transformational change in the food system by purchasing from local producers. Thus, we are dedicated to understanding and growing farm to institution efforts in New England. The fact that producers are already selling hundreds of millions of dollars worth of product to institutions and intermediaries suggests that producers already see an advantage to working with these markets.
FINE looks to the USDA as a critical partner in continuing to research institutional markets from the production end of the supply chain. Follow up surveys will be essential in continuing to understand the relationship between producers and institutions. Future research should also focus on the different ways local food gets to institutions, including direct sales, food hubs, traditional food distributors, and food service management companies.
FINE and farm to institution organizations across the country are working to perform this research independently, but the cost and time associated with such a project is often beyond the capacity of a single organization. In 2016, the National Farm to Institution Metrics Collaborative, a network of farm to institution entities from across the country, was launched to share best practices and experiences from different farm to institution landscapes. The collaborative also works to design partnerships to allow more extensive data collection and research to take place. Additional research requires funding. FINE looks to the USDA and other public and private funders to step in and support the work being done so that progress can be made.
 State-level data is not available for Rhode Island. Unpublished state-level data is, however, included in national and regional totals.