LOCAL FOOD IN VERMONT: MIXED MESSAGES

By David Timmons

Standing in a cash register line at a University of Vermont commissary, I'm pleasantly surprised to see a sign listing the benefits of local food: taste, nutrition, energy conservation, and community. I glance down at the bottle of Vermont apple cider in my hand, and mentally pat myself on the back. But looking around at shelves full of national-name packaged foods and snacks, I wonder how much of the food for sale could really be from Vermont. The local food sign and the shelf stock don't convey the same message.

The answer to the question of how much Vermont food might be local depends on how one looks at it. On one hand, agricultural production in Vermont is strong. In 2002 (at the last USDA Census of Agriculture), Vermont farmers raised $473 million of agricultural products (farmgate value), or $767 per Vermonter, more than the U.S. average $696 per capita. This suggests Vermont farmers could feed Vermont. A 1976 study by Burrill and Nolfi also found that Vermont had enough farmland to raise a typical American diet. Using the 1976 land-use figures and 2002 population and land-availability numbers, we find that Vermont still has enough land for food self sufficiency, despite population growth and loss of agricultural land since 1976 (though self sufficiency will not long be possible if farmland loss continues). Historically, most important food crops were raised in Vermont: beef and potato production in the state peaked in 1840, pork, wheat, and bean production peaked in 1850, oats peaked in 1880, corn (for grain) and apples in 1900, chicken and pears in 1910, cherries and strawberries in 1940, and eggs in 1960 (dairy production is currently near its all-time high). Vermont is clearly capable of feeding itself.

On the other hand, current production is not particularly diverse. If food trucks stopped running tomorrow, we would have plenty of dairy products, and shortages of most everything else. Vermont produces less than it consumes in every food category except dairy—the supplies of local meat, poultry, eggs, grains, beans, fruits and vegetables are all less than amounts consumed. Taking lack of diversity into account, Vermont produces at most 38% of its food, even if every potentially local food item stayed in the state. But much of the production that could provide local food is in fact exported; actual food self-sufficiency is much less than 38% (and harder to measure). By U.S. standards, Vermont's agricultural diversity is quite low. Thirty-one states have more potential than Vermont to feed themselves (Minnesota ranking #1 at 88%), though Vermont leads all New England states except Maine. And there are two obstacles to more food self-sufficiency: the state would need to both raise a wider variety of crops and livestock, and develop the industries to process these into foodstuffs.

On the third hand (economists need lots of hands), Vermont is at the center of a renaissance of farmers' markets, farm stands, and other forms of direct sales from farmers to consumers. Nationally, direct sales doubled between 1992 and 2002, and in Vermont, increased by a factor of 2.4. Direct sales exclude sales at grocery stores, coops, restaurants, and sales of processed foods—for these and other reasons, direct sales represent only a small portion of total local food activity. But direct sales are arguably the best indicator of consumer interest in and demand for local foods, likely the most critical component of a local food system. And here Vermont excels, with the highest per-capita direct sales of the fifty United States, at 5.5 times the national average. While tourists and others passing through undoubtedly assist in this effort, tourism alone does not account for Vermont's high direct sales. Vermonters buy more food from local farmers than do most Americans.

So what might cause Vermonters to raise and consume more of their own food? Agricultural economists express market food cost as the sum of production cost and cost of transport to market. Historically, transportation costs were more significant. Writing in about 1820, Von Thünen, an early agricultural location theorist, observed that it was not economically possible to raise grain an overland distance of more than 50 miles from market, since on a 50-mile round trip a horse and its driver would eat as much grain as a horse could pull (though even in 1820, grain traveled much further by ship). Such inherent limitations on food movement caused most food to be local for most of human history. But transportation costs plummeted over time. A study of 750 years of overland freight transportation cost in the UK found that in 1750 (roughly when European settlement of Vermont began in earnest), transportation cost about ten times what it does today, in 1850 cost three times as much, and as recently as 1950 transportation cost twice as much as now. Thus market cost has increasingly been determined by production cost rather than transportation, and the lowest-cost production locations have garnered an increasing market share. As transportation costs declined, self-sufficient agriculture grew into specialized agriculture. Vermont still holds a comparative advantage in producing dairy items for the Northeast, an advantage strong enough to offset the cost of transporting dairy from the Midwest or West (where production can be less expensive). Thus dairy has remained while much other agriculture has departed for cheaper production venues.

Many argue that the centuries-long decline in transportation cost is at an end, assuming that energy demand continues to rise while fossil fuel supplies ebb. And even current transportation may be more expensive than it appears, since the market price of fuel does not reflect its full cost to society— “externalities” like oil spills and global warming are not counted as transportation costs. A 2001 paper by Redefining Progress compared eight studies on the external costs of gasoline, including costs like car accidents, time lost to congestion, and environmental damage. The average additional cost per gallon calculated was $4.54, which added to a market price of $2.50 would result in a real gasoline cost of $7.04 per gallon. Higher transportation costs—from fuel scarcity and/or taxes designed to reflect real social costs—would return an historic advantage to Vermont farmers and result in more local food production and consumption.

Agricultural location theory also assumes that foods are commodities, that one apple is the same as the next. But local food adherents, like those who buy organic, reject this premise. Consumers may value the place of production as an attribute of the food, one for which they may pay a higher price. Research indicates that reasons consumers prefer local food include freshness and nutritional value, preserving local farms and helping the local economy, and environmental benefits—what we might call “internalized values.” Even though the market price of gasoline is not $7.00 per gallon, some consumers may mentally assign such a cost to fuel, and make purchasing decisions accordingly. Through their food purchases, people may also express values around helping the local economy, preserving local farms and farmland, and better securing long-term food supplies. Demand for local food can outweigh minimum production cost as a determinant of local agricultural production. And demand for local food is strong in Vermont.

Thus there are mixed signals about Vermont local food. Vermonters did feed themselves. Vermonters could feed themselves again. Though at the moment Vermonters don't feed themselves, compared to most Americans, Vermonters are particularly inclined towards food from their own state. While larger forces in the outside world may ultimately steer Vermont (and all localities) toward more local food production, in the short term local food utilization is most likely to grow because of demand for fresher food, and by people expressing other internalized values through their local food purchases.

Source: USDA Census of Agriculture 2002

*U.S. production adjusted for imports and exports, reflecting production needed for national food self sufficiency

**Vermont dairy production = $555 per capita