New Study Finds $3 Billion Boon to Iowa’s Economy if Supermarkets, Restaurants and Schools Bought More Locally Grown Food

Projects $800 Million in Sales if Just 25 Percent all Large–Scale Food Buyers Bought Local Produce, Plus Thousands of Jobs and Boost to Iowa’s Dwindling Midsized Farms

Published Jan 27, 2016

WASHINGTON (January 28, 2016)— While midsize family farms in Iowa and across America have been disappearing for decades, a new report by the Union of Concerned Scientists (UCS) found that increased demand for fresh, sustainably-grown local food offers new economic opportunities for farmers and rural communities.

According to the report, “Growing Economies: Connecting Local Farmers and Large-Scale Food Buyers to Create Jobs and Revitalize America’s Heartland,” smart public policies that connect local farmers to large food buyers such as supermarkets, restaurants, hospitals and school districts can help bring back midsize farms, create thousands of jobs and boost the local economy.

Researchers at Iowa State University have estimated that Iowans spend $8 billion on food annually and only 10 percent of the food is locally produced. Iowa farmers could capitalize on the increasing demand for locally-grown food, according to the study, which also found:  

  • If just half of the state’s food-buying institutions purchased food from in-state farmers at the level of interest they expressed in recent surveys, it would generate $1.67 billion in sales—a boon to the state’s economy. If all of Iowa’s institutions purchased locally at the level they would like, it would generate more than $3 billion in sales.
  • Midsize farms could contribute roughly half that added revenue. Iowa lost roughly 6,000 midsize family farms from 2007 to 2012, but beefed up local-food markets could return nearly three-quarters of those farms to the state.
  • If midsize farms supplied food to meet half of the identified market demand, it could support at least 12,000 in-state jobs and possibly as many as 49,000 full-time farm jobs.
  • Beginning and transitioning farmers need financial incentives, research and technical assistance to get healthy food from farms to markets. By providing such support, forward-looking federal food and farm policies could revitalize rural communities across the country.

“Now more than ever, consumers want to know how their food is being produced, and by whom, and food sellers in Iowa, and across the country are taking notice,” said Anthony Thompson, president of the Iowa Food Co-op. “Food hubs like ours play an integral role in getting healthy food from farms to consumers. Financial incentives for buying local and more investments in food hubs and other connecting players would go a long way toward making local food accessible to us and our customers.”

Though there’s increasing interest in local food, farmers need help.

“It's really tough for smaller farms to get started today," said Dale Raasch, founder of Bridgewater Farms, a family-owned, mid-size farm specializing in sustainable, organic produce. “When you go to the bank to borrow money for equipment, financial advisers are used to hearing about yields for commodity crops like corn, soybean and cattle; they aren't willing to stick their necks out and give loans for crops like vegetables because they have no idea what tomatoes go for, what money they can bring in. State and federal grants are also hard to get. More research on diversified crops and their marketability could ensure farmers get the funds they need to survive and grow. Food hubs can also help new farmers, who are still building up relationships with customers and food-buying institutions, get a foot in the door.”

The UCS report is the first in a series making the case that a national food policy is needed to address an outdated and out-of-balance food system that encourages the voluminous production of crops used in unhealthy processed and junk food. Federal policies should instead spur the production of healthy and affordable fruits and vegetables, according to the report.

“It used to be that locally-produced sustainable foods were a niche market, but demand for them has really spread to the mainstream in the last decade,” said Suman Hoque, chef and owner of HoQ, a Des Moines restaurant. “I believe in buying local and supporting local economies because we can keep the money right here, in Des Moines, and also because we can feature fresh produce. As Americans, our attitudes toward food and eating are changing and there’s more consciousness about what we’re eating, where it’s coming from, and who’s preparing it. This is an important trend taking root across the country and we enthusiastically support increasing access to local, sustainable foods.”  

The UCS report focuses on Iowa, but the findings apply to other states.

“Unfortunately, our current food policy isn’t focused on what’s good for our health or the health of rural economies,” said Ricardo Salvador, director of the Food and Environment program at UCS. “That’s why we need a national food policy that can help us make the large-scale transition we need to a food system that encourages the production of healthy food.”