Why is Local Food So Expensive?

By Nick Carter 

I used to get mad. I got really mad. When some well-to-do yuppie would tell me that buying local was “too expensive” for their budget, I would roll my eyes and offer no sympathy. It was infuriating. 

   Until my wife pointed something out to me: Local food is expensive. 

   She would know, of course, being the one who actually shops for groceries in our family. And she was right. She pulled out frozen broccoli, 89 cents. Bread—and good bread, mind you—2 or 3 dollars a loaf. Pre-sliced, no less. A container of spring mix salad, twice the size as any farmer vends at a farmers market, but not quite twice the price. 

   “Who cares,” I objected. “A buck or less difference, who cares?” 

   But, for a family of five that eats like ours, those small variances on every item really add up. Add to that the fact that your local farmer doesn’t run sales every week like major grocery chains do, and if you’re a deal shopper you can be looking at an objective difference of double or even triple your accustomed grocery budget to shop all items locally.

   What gives?

   Well, I want to take some time to explore this, to make some clarifications, to make some apologies, and to ask you to make some intentional sacrifices today with a long-term goal in mind.

Know what you’re buying

First of all, not all local food is the same. If you divide local artisan food from the comparable staples that can be sourced either locally or from non-local equivalents—and I do mean equivalents—then you’ll quickly see that the price gulf is not uniform.

   Your run-of-the-mill cucumbers, lettuce, pork chops and eggs are not dramatically more expensive locally than their comparable non-local counterparts. These may be incrementally more expensive, but not by orders of magnitude. A dozen grass-pastured eggs can be found at the farmers market for a percentage more, sometimes the same or less, than comparable brown eggs at the supermarket. The same is often true of your staple vegetables, and even meats. 

   Are they incrementally more expensive? Sure. And I’ll discuss why later. But they’re not double or triple the price. They’re not nearly as far removed from the expected price as, say, artisan cheeses or charcuterie might be. 

   It’s in other categories where the real sticker shock usually sets in. “Six dollars for cheese?!?! I can get a bag of Kraft for 99-cents.” Or, consider some of the locally favored soups and entrees. $10 to $14 for a quart of frozen soup is commonplace at the farmers market, compared to 99-cent cans at the grocery store. A hard salami from a local chef is not to be compared with a Slim-Jim at the gas station. 

   Here is what you have to realize in these categories: You’re paying for artisan craftsmanship, not commodity food. When it comes to locally sourced prepared foods and value-added items, the preparation is expensive because it’s manual. It’s hand-crafted and qualitatively a different item. 

   And if cost is your biggest concern—or even a concern at all—you probably don’t splurge much on these kinds of items, whether they’re local or not. You probably buy semi-custom suits, not individually tailored ones. You buy the $5.99 wine special, not hunt around for a good vintage year. And that’s okay.

   Buying local does not have to mean subsidizing a starving artist. There are some vendors in the local food market who are not selling groceries. They’re selling experiences, and you might just not be in the market for that these days. There is no guilt in buying non-local bread, even for the die-hard locavore. You know why? Because there might not be a local alternative. Just because it’s bread, doesn’t make it a true market alternative for everyday sandwich bread. Know what you’re buying.

Why is this other food so cheap?

I was in the frozen corn business for three years. Local frozen corn, that is. And for local corn, we paid more to the farmer for a pound of raw corn than you would spend on a fully cut, processed, blanched, and canned pound at the supermarket. Try to compete with that! 

   But how could this be? Were we terrible negotiators? Or, maybe we were buying from inefficient farmers with overly high costs? That wasn’t the case at all. We were paying what the corn actually costs. Our competitors weren’t. 

   First of all, large agriculture is subsidized. And understandably so, in one regard. No farmer in their right mind would plant a thousand acres of corn, knowing full-well the weather could destroy it all, unless the government hedges their risk somehow. (Nevermind the fact that farmers arguably should not be planting thousands of acres of one crop). In a thousand-and-one tiny and subtle ways, the real costs of growing those large-scale operations are shared among the taxpayers. Which means cheap food prices in the aisle, but made up for in myriad other ways you don’t see at the cash register.

   Second, you may have noticed that canned corn doesn’t taste all that good. Nor, for that matter, do the cheap versions of frozen corn. Merely packing starch into a light-yellow waxy kernel that resembles sweetcorn does not make it sweetcorn. It just doesn’t work that way. Instead, what cheap food providers are buying is, in most cases, water or air. Sometimes both. 

   In the case of our corn competitors. They bought poor-quality (perhaps seconds, or grade-B) corn. That often means it’s enlarged on the stalk, but dehydrated slightly, and therefore cheap to purchase from the farmer. Not to worry, though. Heat the corn to 260-degrees in a steam bath and it gets right back to edible. And, 79-cents per pound may be a cheap price for corn, but it’s a hell of a markup on water!

   Something similar is happening with your fresh produce. You like the looks of those strawberries, don’t you? Plump, red, and huge. Ever notice the hollow cavity on the inside after you bite into it? A pint of strawberries isn’t a pint anymore. What about your bell peppers? Compare the size of a bell pepper at a big-box chain grocery store to the size of one at a farmers market and you’re likely to think the farmer just doesn’t have what it takes. Until, that is, you cut into them. One has a thick, dense flesh all the way around. The other is tantamount to green paper mache. It’s an organic air balloon. Yum!

When did you buy your first airplane ticket?

   Ultimately, no matter how much I adjust the scales for things like water-weight, air volume, subsidy, and quality differentiators, local food is still more expensive, on the whole, than mass-produced supermarket products. But—and this is a big “but”—it doesn’t have to be. 

   When did you first buy an airplane ticket? Or, maybe I should rephrase the question: Would you have been likely to buy an airplane ticket in 1940, when air travel from coast to coast cost as much as the average middle-class annual salary? No, I doubt it. You’d be riding the train like every other average Joe, and asking—in much the same way you do about local food now—“why is air travel so expensive?”

   It takes leading-edge adopters to create a market swell that will bring prices to an attainable level. Slowly but surely, year after year, more and more people started buying plane tickets. And as they did, the industry could get more efficient. And as they did, prices fell, more people could afford it, and more people bought it, and they became more efficient, and … well, you get the idea.

   Fortunately, we’re already seeing that pressure affect the local food market. But when it comes to getting local food into your attainable price point, you can’t wait for it to “fall.” You have to actively pull it down by the dollars you spend. Can’t replace your whole grocery budget today? Don’t fret. Fill your pantry with 79-cent corn and 99-cent cans of soup. Eat, for goodness sake, eat! But where you can and when you can, squeeze locally made goods into your budget at every corner. It’s an investment in a future that your kids will appreciate when the day comes that eating healthy and playing one’s role in the local economy doesn’t have to be the expensive choice. 

Nick Carter is a serial entrepreneur—founder of over a half a dozen businesses. He is the author of “Twelve Seconds: The Lift your Business Needs” and the CEO and co-founder of FarmersMarket.com. He describes his vocation not as a farmer or a software engineer, but simply a person who’s passionate about solving business problems for entrepreneurs. Nick can be reached at nick@farmersmarket.com.

 

 

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