The Cost of Local Food

By On
• In

There has been a lot of conversation about local food and one of the criticisms has been its high cost. Local meat does cost more, but it is important to understand what is driving the cost, and what actions could be taken to reduce cost. Every economic decision we make has consequences and the commercial food system can provide cheap food, but not without repercussions. In this example I will use pork, but the results are just as applicable to local lamb, beef, chicken, and turkey.

There are three primary drivers of cost: processing, feed, and labor. It cost about $1.65/lb to process local pork. You can buy pork cheaper in a store than what it costs to pay a local meat processor. So why the high cost for local? There are two local USDA processors, both process fewer than 15 animals per day and operate in a custom model where every pig, cow, or lamb is processed to customer requirements. This requires a higher skill level, and those processors will make over $10/hour. Reducing the processing cost is simple: move to an economically efficient factory model that processes thousands of animals every day, hire low skill level workers who make minimum wage, and have those workers do the same thing thousands of times a day. A mass production processor costs a fraction of what it costs to do locally. The down-side is you end up with poor working conditions and higher risk of e-coli and other bacteria. You cannot operate a high volume meat processing facility with the same level of cleanliness and care for the animal that you can at our local processors.

The next driver is feed cost, which amounts to $1.80 per pound. We raise heritage breed pigs that predominantly eat pasture grass. We provide 2-3lbs of grain each day that we purchase from a local feed supplier. The feed is predominantly corn and soybeans purchased from the Midwest, combined with some vitamins and minerals. During the winter, when our pasture is not available, we have to purchase orchard grass and alfalfa. Our pigs take about 10-12 months to reach maturity and are slightly smaller than grain fed commercial pigs that reach maturity in 6 months. Our pigs are not as efficient in their feed use, by using breeds of pigs that are more efficient it is possible to bring the cost down, but not enough to explain the entire difference. It may also be possible to purchase feed at a lower price if you were buying larger quantities. Feed costs could also be substantially reduced by using non-grain filler material that is much cheaper than corn and soybeans. Feed does have an impact on taste; grass fed heritage pork is leaner and more flavorful, and has a different texture and color than the pork you buy in the store.

The third driver is labor, which costs about $1.05 per pound. This provides the local farmer with a reasonable hourly wage to care for the animals 365 days a year. Large, automated factory models can bring down labor costs by putting large numbers of pigs in a small area and using technology to monitor the animals. The labor costs, correspondingly, gets divided across the larger number of pigs. We raise about 60 pigs a year, compared to factory farms that raise thousands each year.

Not everyone can afford local meat; it will always cost more because of the lack of high volume processing and factory operations. It costs about $4.50 per pound to raise local pork, far higher than what it costs to purchase mass produced pork in the grocery store. This amount does not include smaller expenses like maintaining breeding stock, supplies, recouping the initial investment, and any profit for the farmer, nor does it include any mark-up for the retail establishment that sells the meat. It is easy to drive costs down, but it requires using factory farming techniques that produce massive quantities of food in small spaces and then using those same mass production techniques to process the meat. The consequences of these factory farms are becoming clear as we increasingly need legislation to further regulate our food system and prevent unsafe food. We are also learning that cheap food impacts the disposition and personality of the animals and the taste of the meat. Cheap food does have its consequences and the local food debate needs to include not only the economic cost drivers, but the real impacts on taste and animal husbandry practices.

About Craig Mayberry

Closed Account • Member since Jan 17, 2008

While writing his articles from 2008 to 2011, Craig lived near Lynden and taught at both Whatcom Community College and Western Washington University. He was active in politics and ran for public [...]

Comments by Readers

Tip Johnson

Mar 10, 2011

I have been struggling with this problem for a while.  I like the idea of local economies, but they can never achieve economies of scale to compete in the “marketplace”.  I’m guessing it has something to do with how we define our markets.

I believe competing with factory farm pigs is tough, but I bet California avocados are having a hard time competing with Mexico, too.  I think we’ll see more and more definition of what local activities are economically rational as we experiment with the “free trade” market concept.

Many think it has already failed.  I work for a company with business in Mexico, Central and South America.  Folks shipping and selling all appreciate the free trade framework, but the people are generally fed up with it. It has not only failed to live up to its promises, hence expectations, it has made things palpably worse for the poorest.  And these folks are really poor.  They’re sick of free trade and would like to return to their local economies.

Here at home, we are plagued with fiscal crises, can’t afford health care for our poorest citizens, much less fix potholes.  Meanwhile, as Michael Moore points out, 400 Americans own more than half the rest of the population.  Bankers and brokers bought deregulatory government and pushed the system over the edge, stuffing the retirements, pensions and savings of many Americans into their suits, with impunity.

On the other hand, folks in Eastern Europe got pretty sick of (what passed for) socialism.  The economic repression was extreme, partly due to global trade frameworks, but also in no small part to their command priorities.

Somewhere, between the failures of free market capitalism and command economy socialism, there must be middle ground that benefits community.

Of course, the obvious first paradigm is between Potlatch economies of distribution, so-called gifting economies, and those based upon acquisition, possibly descended from Viking pillage and plunder. But it is seriously difficult to reconcile property ownership and investment accounting in a gifting framework.

One fairly refreshing exception is the Mondragon Cooperative Collective that emerged from the repression of Franco in the Basque region. It’s not without its problems, but in their organizational scheme, education is central, capital is subordinate to the common good, management is rotated through the working ranks, profits are somewhat shared and business is built in stable subassemblies that lend resilience to the system.  Folks have decent wages and benefits.

Another of recent interest is the concept of the Bazaar economy.  Rajni Bakshi’s book “Bazaars, Conversations & Freedom” discusses how economies should not be inhuman, that it is precisely the combination of conversation and trade, and other “market inefficiencies” that benefit the community. Other economists have characterized information in the bazaar as “poor, scarce, maldistributed, inefficiently communicated, and intensely valued” creating a tendency for “repetitive purchasers to establish continuing relationships with particular sellers rather than to go through the market with each occasion of need.”  This encourages the “clientelization” of relationships that are at once amicable and competitive, but hinge around “the realities of the particular case rather than the general distribution of comparable causes.”

I don’t know.  I’ve long believed it would be sensible for communities to discourage or replace imports, to focus on meeting local needs and encourage value-added surpluses for export.  But that starts sounding kinda sketchy in our current historical economic context.

Ideas?

Read More...

John Servais

Mar 13, 2011

Two excellent analyses of how local food can be raised and sold locally.  One from a more conservative citizen from the Lynden area who farms and sells his food locally.  The second from a more liberal citizen from the Fairhaven area who works for a company doing international business and who purchases food.  While their perspectives are different, their take on the enigma of local grown and sold is very close.

The bazaar idea is, of course, embodied in our Farmer’s Market.  The downtown Bellingham is wildly popular during the few months it is open.  The Fairhaven one - with an even shorter season - is touch and go and each year decisions are made as to whether to continue it.  We need several more markets which, if run correctly, can somewhat reduce the actual cost of producers selling their food.  Even while it may take more of their time for the selling process. 

Locally we have rich farming resources - soil, water, weather and markets.  Our local governments have always had a confusing time on what their attitude should be towards our local farming economy.

The County tends to zone farmland out of production.  One would think the conservatives would be leading the fight to keep farmlands - but it is the opposite.  The liberals - who are fairly disdained by rural north county folks - have always been the champions of retaining farmland.  And farming is the conservative and traditional lifestyle so praised by the conservatives.  Irony.  I only wish our rural friends would realize that. 

The Port has ignored opportunities for years to help the farmers.  The Port is supposed - by law - to stimulate economic activity. It is supposed to build or help finance infrastructures needed for business - railroad sidings, ship loading piers, airport runways, food processing facilities, storage facilities, etc.  It needs to be gently reminded of its mission.

Bellingham, while proud of its downtown Farmers Market, is primarily interested in having it downtown so as to benefit what city hall calls the “Urban Core”.  This is to the detriment of other areas.  Little known is that the Bellingham Farmers Market was started and nurtured in Fairhaven.  It bacame a success and benefited Fairhaven businesses.  So, the city decided it wanted the market downtown and paid thousands to the Farmers Market organization to move it out of Fairhaven to downtown.  Hardly a community oriented action.

The bazaar concept works.  We need more of them and they should have basic public financing for their space needs.  Each community could set one up.  Ferndale tried one for a while.  The Port got pushed, by citizen demands during an election campaign, to allow selling fresh fish by fishers from the docks - but has hardly supported this concept.  There are other opportunities where a modest public effort - read a few tax dollars - can result in huge benefits for all citizens.  What a concept.

Read More...

David Camp

Mar 26, 2011

$5 or $10 a gallon gas will do a lot to revitalize the local food economy, as well as the local manufacturing economy.

Get ready, it’s coming. And while we will still get greens shipped in from 2,000 miles away in the winter, they will cots much much more than now and become luxury goods. I can remember when a tangerine was a rare treat in northern climes- IMHO these days will be back sooner than later.

Read More...

Hue Beattie

Mar 27, 2011

john, you got it wrong. the market started downtown and moved to Fairhaven for a couple years. But after our booths were destroyed in the old post office fire ( now Skylarks ) we moved back downtown.I was on the orignial BOD and have been the Market historian.

Read More...

Ryan M. Ferris

Apr 08, 2011

The craftsman will always sell higher priced, better quality goods than the factory. But “value” is a strange beast and it can influence economic decision making without either sentiment or reason. In tough times, boutique farming could be squeezed into oblivion, even at $5.00 per gallon or more.

I really think you have to market local food as a consumer choice for the local economy, for greater health, for greater community. Unfortunately, that is hard to sell to families on a recession driven budget. (In truth, I would buy milk today from the local dairy that guarantees public radiation monitoring…)

It surprises me that non-commercial, non-export based farming has any market whatsoever these days, but I don’t think the recession will kill “local farming”. I predict “Victory Gardens”, community pot lucks, home food preserves, urban farming and gardening will continue to evolve in all the backyards of every county and city. If there were markets in such in such enterprises, that is where the money in food could be in the future.

Read More...