Methinks "The Farmers' Market Myth" is a Myth

[JTravel]

What happens at our market is the Food Stamp users turn in/ or deduct from their card and get "wooden nickles" , I think in $1. amount. These they use like cash at the farm vendors. Sometimes so many people use them that they announce that farmers should turn them in at the office so they hand them out again.

So as said above it is a chance for low income people to buy fresh stuff, in the city, at good prices. The university runs a shuttle bus from campus too and lots of grad students and others in apartments shop at the market. All looking for bargains I would guess.

[StanSherman]

They may be more efficient at $75 / barrel oil.. will they be more efficient at $200 / barrel oil?

Efficient for who? Farmers that sell at farmers' markets have generally lost profits as fuel prices have increased. Most farmers near large urban areas have 100-200 mile distances to a market.

I ran some rough numbers on eggs from Iowa to California. Walmart has one of the pick-up stations on a large egg farm about 30 miles from here. They transport about 8500 dozen in one load. It cost about 35 cents a dozen at today's fuel prices. The alternative would be for markets in California to market local eggs. Unfortunately California can't grow the chicken chow nearly as efficient as Iowa so they would be importing more weight than just the finished product. In my Iowa egg example the waste is returned right back to the corn crops with minimal hauling.

The OP refers to an article that cites how food is "cheaper" at the farmers' markets. They did not qualify with "other costs". Leopold also proposes that organic farming is cheaper than current practices in direct costs (not hidden). It is simply not believable when you really crunch the numbers.

[vengroff]

In my experience, prices in grocery stores vary tremendously depending on location and market niche, whereas farmers' markets are more consistent for in-season items. The result is that you can find groceries that are more or less expensive than farmers' markets without too much trouble.

For example, the two groceries studied in the Seattle University study cited in the Atlantic article, Broadway QFC and Madison Market, both have above average prices for Seattle. They are on Capitol Hill, which is relatively dense and has higher retail rents than many other neighborhoods. So it's not surprising they came in a little above farmers' market prices. But only a mile or so away, in the less affluent Central Area there is a discount grocery outlet that specializes in liquidating near-expired frozen and canned goods. They also get some fresh produce that needs to be moved quickly. On top of that, they host a weekly farmers' market in their parking lot. The produce in the store is much cheaper than the farmers' market outside, but the quality is not nearly as good. The farmers' market prices and quality are comparable to others in the area.

If you only shopped in the core retail section of Capitol Hill, you might conclude farmers' markets are a bargain. But if you only shopped in the Central Area you would conclude that they are substantially more expensive.

[Laura415]

I also live and shop at markets in the San Francisco Bay Area. There is a subtle gouge going on with some Farmers market vendors, but I shop around the market and I ask if I can get a deal on quantity. But really for organic seasonal fruit and vegetables the prices are on par either slightly lower or slightly higher than the regular markets. For example:

Organic Strawberries:

3.50 per basket at Ferry Plaza FM (Locally grown)

3.50 per basket Bayshore FM but also 3 baskets for 10.00 (locally grown)

3.99 for a slightly larger basket at Trader Joes (Mexico or U.S.)

2.49 per basket at Monterey market.(Locally sourced) Best deal but I have to drive there.

This seems on par to me. See below for what I am really paying for when going to the farmers market.

There are intangibles however:

Supporting farmers and local vs trucked in from afar.

Fresh picked food lasts longer, so less waste if I can't eat it right away.

A much more pleasant and uplifting shopping experience at the farmers market. I mean the people who work at supermarkets often know next to nothing about the food or how to prepare it. Growers often do. I also love interacting with people who are community oriented. When they love what they do and are working for more than a paycheck I feel I can spend a tiny bit more to get that interaction.

[EatNopales]

They may be more efficient at $75 / barrel oil.. will they be more efficient at $200 / barrel oil?

Efficient for who? Farmers that sell at farmers' markets have generally lost profits as fuel prices have increased. Most farmers near large urban areas have 100-200 mile distances to a market.

I ran some rough numbers on eggs from Iowa to California. Walmart has one of the pick-up stations on a large egg farm about 30 miles from here. They transport about 8500 dozen in one load. It cost about 35 cents a dozen at today's fuel prices. The alternative would be for markets in California to market local eggs. Unfortunately California can't grow the chicken chow nearly as efficient as Iowa so they would be importing more weight than just the finished product. In my Iowa egg example the waste is returned right back to the corn crops with minimal hauling.

The OP refers to an article that cites how food is "cheaper" at the farmers' markets. They did not qualify with "other costs". Leopold also proposes that organic farming is cheaper than current practices in direct costs (not hidden). It is simply not believable when you really crunch the numbers.

For starters, California is the nation's 5th largest producers of eggs and doesn't import much from Iowa... so the alternative is not for California to market local eggs.. that is the status quo.

http://www.unitedegg.org/GeneralStats/default.cfm

California is not as efficient as Iowa in producing chicken chow? Under what assumptions? Based on today's market structure & feed ingredients... yes. But lets look at Iowa / Midwest corn.

Corn farmers receive direct subsidies to the tune of $12 billion ($8BB in form of Farm Income Stabilization act, $4BB in form of R&D grants / ethanol etc.,)

A study by HSBC suggests additional taxpayer support (subsidized Ag Banks, tax loopholes etc.,) runs $7 dollars per every $1 of direct subsidies. As mentioned earlier I was in a senior financial position at California Ag conglomerate.. in that business we did not receive farm income stabilization but our loans ran trough an Ag bank & we were structured as a multi layered Coop... we were generating about $100MM in annual profit (if you use normal GAAP).. but thanks to Coop rules the federal tax bill was nominal, I have personally witnessed the extent of those subsidies.

So back to corn... let us start with the $12BB in direct tax payer subsidies.. the country produces about 12.8 Billion bushels at $3.50 bushel... that means that subsidies stand at 28.5% of the current market value of corn.

Interesting read on Iowa: http://www.card.iastate.edu/iowa_ag_review/fall_01/concentration.aspx

I am far from a Tea Party nut, in fact, will I am independent, I would describe my politics as Anti-Republican, Anti-Tea Party... with that said my opinion as a technocrat is that we are going to have to downsize government quite a bit in the next two decades and that will most certainly include Ag subsidies & Military spending.

Aside from the taxpayer subsidies.. let us look at the other characteristics of Corn farming... what happens if petro-chemical prices skyrocket and Monsanto has to increase the price of Roundup etc?, Iowa farmers double their tractor fuel costs, the cost of making / importing big scale farm equipment rises? At what point will the environment in the Midwest be so saturated with fertilizer & pesticide that it becomes an issue that affects corn prices?

What is the impact of energy prices in general? As oil gets expensive (and it will have to because like or not it will run out at some point) so will electricity & other substitutes.. what will that do to processed food costs? Will it then be economically feasible to truck ingredients all over the world, make a bland, unsatisfying meal.. store in petrochemical based packaging in a freezer for months to be microwaved?

As you know... the country's Ag policy is an extension of Industrial-Military complex... military brass frustrated at the level of malnutrition & trying to build a military for the World War wanted to put in a system that guarantees the country over produces grain, meat & milk... everything we assume about the wondrous efficiency of the modern factory farm is really built on that house of cards.. the reality is that the traditional Milpa (process of growing Corn, Beans, Squash & other complimentary vegetables & weeds in a system) produces as much calories (energy) per unit of land as the most efficient corn factory in the country... and does so with far superior nutritional yields (in terms of amino acids, minerals, vitamins, phytochemicals etc.,) whit far better environmental impact.

By necessity, without any choice, our way of life is going to be very different at the end of the century.. personal income levels for most Americans have been stagnant for decades now... and they will remain so for a very long time.. further every year that wage stagnation reaches higher & higher up the income & education ladder.. it will affect property values as well... without a doubt the standard of living (denominated in hard currency) will slide significantly in the next 40 years.. but that doesn't mean that quality of life has to slide.. it just takes a little imagination & resourcefulness:

http://blogs.worldwatch.org/the-forest-gardens-of-quintana-roo/

Who says Chickens have to be fed petrochemically based intensely farmed corn? How about an intensely managed Milpa, Free Range Chicken & Fish Farming system that reinforces itself & needs very little external outputs?

There are too many reasons why our current industrial-military complex conjured food system is unsustainable during our life time... we take too many of the subsidies & hidden costs for granted, as if we are entitled to them in perpetuity.. but with a little insight & imagination food production conventions will be turned on their head.

Edited May 13, 2011 by EatNopales (log)

[Laura415]

My first post had to do with similarity of prices which makes Farmers Market shopping really doable and definitely competitive pricewise for what you get.

I also want to add that the article on the myth of Farmers market prices vs Supermarket prices has another facet. This facet is the true cost of goods when compared between the two. If I am reading an article that had it's basis in statistics or numbers I'd know that almost anything can be proven using the right combination of facts.

With regard to food, the statistics that need to be taken into account are the costs for supermarkets due to bulk buying and agribusiness subsidies Vs the cost of growing and transporting for smaller farms. With those numbers to back me up then I definitely could make the case that farmers market goods can be considered cheaper than supermarket goods if all things were equal. Which they are not!

We need to stop worrying about how cheap we want things to be and focus on how much value they really have in the bigger picture ie. Pollution of the environment, jobs lost to outsourcing, healthcare costs from poor food, self-reliance lost, Corporations controlling our choices. Frankly I grow as much food as I can and save seeds from my urban gardening venture in order to afford the farmers market prices on things I can't grow and to subvert the capitalist marketplace without killing it.

I'm reading a fascinating book, Cheap-the high cost of discount culture by Ellen Ruppel Shell.

Highly recommended read to understand how we got where we are and why we fall for cheap every time.

[StanSherman]

EatNopales,

According to UC Davis, California imports about 50% of their eggs (2008). I also know truck drivers that do the route.

Corn is at 6.85 today and most farmers expect the subsidies are going to go away eventially.

I choose the egg example because we grew organic pastured broilers and layers in California and now live in Iowa. I have easier access to actual numbers.

One of the problems with using studies or references from academic studies is how dated they are. Corn subsidies per acre have been declining. For example, a family in this area with 6000 acres of corn received about 60K in 2009. With GR around $1200/acre it is hardly going to have any influence on planting. They will most likely by less equipment.

[Kouign Aman]

Never heard anyone say the FM was more expensive than the grocery. Around here, they're considered cheaper. The problem is that around here they are open odd hours like 2-5 pm on Wednesday, which makes it tough for the average working bear to get there.

[Honkman]

I think you can't generalize it without taking into where the farmers market is and the qualitu of the product. Here in SD we have one of the highest numbers of farms (including organic) anywhere in the US and so there is quite a lot of competion. As long as you buy reasonable "in season" (and isn't it one of the purposes of such a market) a lot of produce will be cheaper at the farmers market than in the supermarket and especially (but not only) if you look at organic produce. In addition the quality of the produce will be better, e. g. strawberries picked that morning and the variety is iften better. Meat is often much more expansive but difference in quality is dramatically different. In supermarket you will get your standard industrial meat whereas on the farmers market I can buy for example pork from a farm where I can visit the animals and see how different they are grown compared to industrial meat and you can easily taste the difference. Overall I think the location of the market plays an important role if it is cheaper than supermarkets and difference in quality can't be ignored.

[EatNopales]

EatNopales,

According to UC Davis, California imports about 50% of their eggs (2008). I also know truck drivers that do the route.

Corn is at 6.85 today and most farmers expect the subsidies are going to go away eventially.

I choose the egg example because we grew organic pastured broilers and layers in California and now live in Iowa. I have easier access to actual numbers.

One of the problems with using studies or references from academic studies is how dated they are. Corn subsidies per acre have been declining. For example, a family in this area with 6000 acres of corn received about 60K in 2009. With GR around $1200/acre it is hardly going to have any influence on planting. They will most likely by less equipment.

According to the same UC Davis... as of 2008 only 1/3 of eggs sold in its shell in California come from out of state... California has become a net importer of egg products because of Egg Beaters & similar consumer packaged goods... I think that is a different animal than pure economics of shipping eggs 2,000 miles etc.,

http://aic.ucdavis.edu/publications/eggs/executivesummaryeggs.pdf

In any case... California produce massive amounts of soybean, rice as well as nut & seed that could be used to make livestock feed (although the rice is heavily subsidized and doesn't help my case that much)... if the economics of factory farms & food production changes due to the like surge in energy prices... California could become very competitive in the livestock business... particularly because, although California is an Agricultural behemoth, lots of California produce is exported to wealthier destinations who can afford to pay more for prime quality produce namely Japan... the change in energy economics would affect Japanese consumers & California produce export prices... with the opportunity cost of domestic production vs. export to Japan out of the way there is no reason California couldn't be competitive with Iowa in the egg business.

Times a changing... this not about buying into Pollen's world view or anything ideological.. the food system will change out of necessity.

[EatNopales]

EatNopales,

According to UC Davis, California imports about 50% of their eggs (2008). I also know truck drivers that do the route.

Corn is at 6.85 today and most farmers expect the subsidies are going to go away eventially.

I choose the egg example because we grew organic pastured broilers and layers in California and now live in Iowa. I have easier access to actual numbers.

One of the problems with using studies or references from academic studies is how dated they are. Corn subsidies per acre have been declining. For example, a family in this area with 6000 acres of corn received about 60K in 2009. With GR around $1200/acre it is hardly going to have any influence on planting. They will most likely by less equipment.

$12BB in the 2010 Federal Budget for Corn subsidies is a lot money and a significant portion of the total price of Corn.. as you mention we are currently having very high commodities prices particularly Corn and the high prices are phasing out some of the price floor based subsidy payments... doesn't that fortify my argument that the cheap midwestern Corn bonanza for processed foods & livestock food is at risk? Will not the TOUGH economics of the farming business force people to different alternatives.

Again the basis of my argument is that $3 bushel corn, as heavily enabled by government subsidies, cheap energy & hidden environmental costs is unsustainable and when the bubble blows (it certainly will) the food system is going to be unrecognizable to our generation.. but will be very recognizable the pre-industrial cultures.

[StanSherman]

Again the basis of my argument is that $3 bushel corn, as heavily enabled by government subsidies, cheap energy & hidden environmental costs is unsustainable and when the bubble blows (it certainly will) the food system is going to be unrecognizable to our generation.. but will be very recognizable the pre-industrial cultures.

In my area farmers don't have the choice to grow much other than feed stock. The season is too short and the beginning is very wet. A small percentage could be converted, but take the converse argument. How would Iowans get fruit if it were not for imports. We can grow apples, cherries, pears and a few others, but even fruits like pears are being left on the trees in California due to labor costs not shipping costs.

Please don't take me wrong, We basically have a very nice CSA sized small farm, but we don't market our products. We give it away to other farmers in the area. We actually grow sweet corn for corn farmers. They in turn make sure we have all the pork, beef, chicken and compost we could ever want.

Corn always gets the label of evil since it is overused in our food chain. There will most likely be a bubble in the corn land because of 2010 profits being so high. They are paying ridiculous prices for acreage now as the reinvest their money.

[StanSherman]

Will not the TOUGH economics of the farming business force people to different alternatives.

Absolutely, but in this part of the country they can grow corn better and cheaper than any place on earth. Unless they come up with a viable biofuel crop that can grow in zone 4 there is no viable alternative.

I felt very similar to you until I actually went through a few seasons and observed how it actually works.

[StanSherman]

there is no reason California couldn't be competitive with Iowa in the egg business.

Times a changing... this not about buying into Pollen's world view or anything ideological.. the food system will change out of necessity.

Actually from my experience and knowledge there is no way California could become competitive in the egg business. (BTW the egg beaters are produced as a byproduct of hairline cracked shells. They have very advanced systems to detect the cracks. They then cull them for products like Egg Beaters)

If listened to Michael Pollen and read many of his pieces. Unfortunately in the last five years we have gone further away from the US population actually being able to feed themselves with unprocessed foods.

I was shocked when selling whole chickens at Farmers' Markets (whole is all that is allowed in CA) how many people with fancy kitchens equipped with Sub-Zeros and Wolf ranges have no idea how to handle a chicken.

[Panaderia Canadiense]

Chris, going back to the original topic can those of us in other countries weigh in?

I buy almost all of my produce at the Mondays-only local farmer's market that's held about 10 blocks from my house. It is one of the largest in the country, as the city where I live is the halfway point for shipping to anywhere else in the country. Food there consistently comes in well below the local supermarkets, even the discount chains (where the food is often so sorry looking that nobody would ever consider buying it.) It's also miles fresher, travels less, and I'm paying the farmers and/or their relatives directly. Here are a few of the indicators. (I'll mention that there are two things that I do buy at the supermarket - mushrooms and asparagus, which are produced by large farms and don't appear in the farmer's market.)

1 lb of strawberries: market - $1.00. supermart - $4.50

10 lbs of 'Atahualpa' potatoes: market - $2.50 to $3.00 supermart - $5.50 and upwards

a flat of 30 large brown eggs: market $2.50, supermart $3.20 and up

1 lb of honey: market $5.00, supermart about $10 (I can't buy a whole pound at once there)

a nice big head of romanesco: market $0.60 - 0.75, supermart $2.00

5 lbs of tomatoes: market $1.00, supermart $3.00

and the big one:

Market - one raceme of "baby" Orito bananas, weighing in at about 50 lbs, $1.00

Supermart - little baggies of ten individual bananas of the same, $1.00 per pound. I can't even buy a full hand at the supermart.

I could go into more detail, but you get the drift.

Edited May 13, 2011 by Panaderia Canadiense (log)

[EatNopales]

Again the basis of my argument is that $3 bushel corn, as heavily enabled by government subsidies, cheap energy & hidden environmental costs is unsustainable and when the bubble blows (it certainly will) the food system is going to be unrecognizable to our generation.. but will be very recognizable the pre-industrial cultures.

In my area farmers don't have the choice to grow much other than feed stock. The season is too short and the beginning is very wet. A small percentage could be converted, but take the converse argument. How would Iowans get fruit if it were not for imports. We can grow apples, cherries, pears and a few others, but even fruits like pears are being left on the trees in California due to labor costs not shipping costs.

Please don't take me wrong, We basically have a very nice CSA sized small farm, but we don't market our products. We give it away to other farmers in the area. We actually grow sweet corn for corn farmers. They in turn make sure we have all the pork, beef, chicken and compost we could ever want.

Corn always gets the label of evil since it is overused in our food chain. There will most likely be a bubble in the corn land because of 2010 profits being so high. They are paying ridiculous prices for acreage now as the reinvest their money.

I have nothing against corn... my people were made of corn

However, and since you are there & in the business and know what is going on... can you tell me what Corn commodity prices would be without any government subsidies & without the ridiculously cheap energy costs we have come to be dependent on? Probably not as cheap as they have been right?

What will happen to Food Processors when they know for sure that Corn & Corn based by products (High Fructose Corn Syrup) are consistently more expensive than they are today. They either find substitutes, raise prices or a combination of both, correct?

Now what will happen to consumer decisions once the price of all that processed junk that makes up the bulk of a supermarket (much of it refrigerated or frozen) goes up in price... will not more closely grown, less processed foods gain somewhat of a comparative advantage?

Look at the challenges we are likely going to face in the next 40 years:

1) Increased Petrochemical Costs as the BRICs industrialize & oil production starts declining / peaks (the price of gasoline, chemicals, fertilizers, food transportation, refrigeration, air conditioning, heating etc., all rise)

2) Stagnant Wages for 90 to 97.5% of Americans dampens Real Estate & consequently Land values and with it mortage backed Consumer Credit.. also shrinks the Tax base

Take just these factors together and we will likely see the following things happen:

1) Ratio of Sq. Ft Living Space per Person will drop (the relative cost of building materials, appliances, household energy will became a bigger share of our paycheck which itself will shrink on an Inflation Adjusted basis)

2) As tax revenue diminish / stagnate.. Government spends less money on Ag Subsidies, Military bases (which tend to subsidize remote areas), and Paved Roads (we are already seeing paved roads in the Rust Belt reverting back to dirt roads because the government can't maintain them)

3) As people huddle into less household space, and the network of paved roads shrinks.. land on the urban fringes & rural areas will become cheaper... plausibly cheap enough to encourage alot more farming.

4) Processed food traveling long distances as going to become comparatively more expensive while locally grown, minimally processed food will become less expense.

I imagine that a reasonably bright future amidst all these conditions will involve lots of solar energy & self-reinforcing farming systems that require minimal petrochemical inputs... already we are seeing this in Mexico. Politicians are going to thump their chest about immigration slowing down.. but those of us who are keeping tabs on the southern neighbor can't help noticing that the high grain prices over the last 3 years are encouraging people to get back on the farms.. and there is a resurgence of Milpa vs. Green Revolution type of farming, and some of these farmers are starting to invest in solar panels (in Oaxaca there is a solar powered taqueria of all things)

The example couldn't be more poignant... Mexico is the birthplace of the Milpa.. it triumphed for 6,000 years then Mexico was the birthplace of The "Green" Revolution (at least in large scale).. beating back the traditional system built on a house of cards that included subsidized petro chemicals & fuel from the very beginning... but now that were just starting to see a new era transformed by high fuel prices & environmental damage we are already seeing signs of the old system coming back.

Edited May 13, 2011 by EatNopales (log)

[Chris Amirault]

Chris, going back to the original topic can those of us in other countries weigh in?

Mais oui! Those are some surprising numbers!

[StanSherman]

I could go into more detail, but you get the drift.

I'd like the detail. What you think are the reasons for the price difference? Can normal farmers sell to the Supermarkets?

[Panaderia Canadiense]

OK Stan, here goes. Normal farmers can (and do indeed) sell to supermarkets, albeit normally through middlemen (who inflate the prices - there's a whole silly economy to selling your food on a national level here, which ticks me off and which I won't rant about here). However, the farmer's market system here works a bit differently than it does in North America.... It's my understanding and experience (based on Canada) that in order to sell your produce in a North American farmer's market you have to buy a slot in the market, and there are also restrictions on your produce. Not so here - the market I shop at is a free-for-all where literally anybody with produce can come and sell it for whatever price they think they can get - those $1 tomatoes will be slightly different volumes from farmer to farmer. I've actually sold overflow plums from my front-yard trees at the market where I shop, and I occasionally sell cookies there as well.

The reasons for the price difference is that the farmers at the market have only gas to transport their goods as overhead, whereas the supermarkets are paying rents, utilities, employees, social security, and on and on and on. This is naturally passed on to the consumers. Equally, that pound of strawberries I bought at the market? They gave it to me in a 1/2 penny plastic bag. At the supermarket, it's packaged to within an inch of its life. Equally, any packaged product sold in a supermarket here must pass Sanitary Registry inspections, which cost about $50 for each product (ie if I want to sell packaged strawberries and packaged uvillas, I pay $100, and so on). This is well out of the reach of a quichua grandmother who's selling the things she grows in her garden, or her eggs, at the farmer's market - she's dealing in small volumes. As are most farmers - that's where the middlemen come in. They buy out entire crops from small farms, then resell the aggregate harvest to the markets at a premium. Hence the price can triple before it hits the consumer.

Considering this, it's hardly surprising that most of the population frequents the farmer's markets! The big one where I shop is also where most of the restaurants buy their produce.

[paulraphael]

Several years ago in NYC the farmers markets were a great bargain. The last few years they've been definitively more expensive than the grocery stores, except maybe the most boutiqu-y specialty shops. Not exactly when that change happened or how long the transition took. I now go to the farmers for quality and interesting selections, and only when I can afford to.

[StanSherman]

I have nothing against corn... my people were made of corn

However, and since you are there & in the business and know what is going on... can you tell me what Corn commodity prices would be without any government subsidies & without the ridiculously cheap energy costs we have come to be dependent on? Probably not as cheap as they have been right?

1) Without subsidies prices should be a little lower, but not as much as you think. The bookkeeping, accounting and legal fees are eating up way too much of that now. The problem might be a glut of CPAs and Attorneys who are now unemployed. Try and get them new jobs

2) I'm not really sure that energy costs have been too low or not. Up-thread you mentioned "big tractors". This afternoon I was able to confirm with a Farmer/MBA tillage costs. Next door they have one of those big ol rigs. It looks like a small apartment building on the horizon. It covers 1 mile of each operation in the time my tractor covers 400 feet. This time of year this thing is dragging a seeder that plants 24 rows. It even stops seed drops where it knows it has covered already. In one 10 hour shift it will seed 200 acres on 100 gallons of diesel. At last years prices that puts the farming energy costs at .0025% they could triple this year because of weather but that would be within the norm.

What will happen to Food Processors when they know for sure that Corn & Corn based by products (High Fructose Corn Syrup) are consistently more expensive than they are today. They either find substitutes, raise prices or a combination of both, correct?

Possibly, but how are the other sugars going to keep their price down? I'm not sure, most of the corn in this area is exported (we are close to the Mississippi River and they barge it downstream) or goes into feed. I'll look into the HFCS supply chain.

Now what will happen to consumer decisions once the price of all that processed junk that makes up the bulk of a supermarket (much of it refrigerated or frozen) goes up in price... will not more closely grown, less processed foods gain somewhat of a comparative advantage?

I would sure hope so, but as an advocate for healthier food I'd rather not tell someone they are eating shit, but show them how good better food tastes.

Look at the challenges we are likely going to face in the next 40 years:

1) Increased Petrochemical Costs as the BRICs industrialize & oil production starts declining / peaks (the price of gasoline, chemicals, fertilizers, food transportation, refrigeration, air conditioning, heating etc., all rise)

Generally agree, but there is always a chance of an energy type of discovery.

2) Stagnant Wages for 90 to 97.5% of Americans dampens Real Estate & consequently Land values and with it mortage backed Consumer Credit.. also shrinks the Tax base

I agree

Take just these factors together and we will likely see the following things happen:

1) Ratio of Sq. Ft Living Space per Person will drop (the relative cost of building materials, appliances, household energy will became a bigger share of our paycheck which itself will shrink on an Inflation Adjusted basis)

I agree, with children being much more like Japanese youth and staying home well into their adulthood. In other words we won't be able to get rid of the little mooches.

2) As tax revenue diminish / stagnate.. Government spends less money on Ag Subsidies, Military bases (which tend to subsidize remote areas), and Paved Roads (we are already seeing paved roads in the Rust Belt reverting back to dirt roads because the government can't maintain them)

Hey, I resemble that remark! I live on a gravel road. My truck is always dirty but it saves me $120/month in property taxes. I spend about $500 less in keeping it clean per year. Unthinkable in LA but I can live with it here.

3) As people huddle into less household space, and the network of paved roads shrinks.. land on the urban fringes & rural areas will become cheaper... plausibly cheap enough to encourage alot more farming.

I wonder where these small scale farmers will come from.

4) Processed food traveling long distances as going to become comparatively more expensive while locally grown, minimally processed food will become less expense.

That assumes that all food can be locally grown and processed. I still think lettuce growers from CA will have too big of an advantage to overcome the shipping costs.

<snip>

[StanSherman]

The reasons for the price difference is that the farmers at the market have only gas to transport their goods as overhead,

No value on farmers time?

whereas the supermarkets are paying rents, utilities, employees, social security, and on and on and on. This is naturally passed on to the consumers. Equally, that pound of strawberries I bought at the market? They gave it to me in a 1/2 penny plastic bag. At the supermarket, it's packaged to within an inch of its life. Equally, any packaged product sold in a supermarket here must pass Sanitary Registry inspections, which cost about $50 for each product (ie if I want to sell packaged strawberries and packaged uvillas, I pay $100, and so on). This is well out of the reach of a quichua grandmother who's selling the things she grows in her garden, or her eggs, at the farmer's market - she's dealing in small volumes. As are most farmers - that's where the middlemen come in. They buy out entire crops from small farms, then resell the aggregate harvest to the markets at a premium. Hence the price can triple before it hits the consumer.

That is the big reason for Farmers' Markets in the US. Except you now need to shop with eco groovy Peruvian woven market baskets

Considering this, it's hardly surprising that most of the population frequents the farmer's markets! The big one where I shop is also where most of the restaurants buy their produce.

I wonder why anyone would buy at the supermarkets.

[Panaderia Canadiense]

No value on farmers time?

Value on farmer's time is what shows up in the prices of the food, particularly here in Ambato where 99% of the produce comes from about 10 km away or less - this, along with "truck pooling" (everybody in a given community will pile their produce into one or two trucks) makes gasoline price overhead for small farmers in the farmer's market system negligable. Hence what they charge is almost 100% for their labour and production costs. I'd also note that production here is a whole lot less intensive than it is in countries that have winter. If you plant a seed here, it grows. Particularly in my area, where an active volcano ensures that the ground is always well-fertilized. (Point of fact, it's just finished an eruption!)

Also, for the greatest bulk of farmers here, pest control is done by turning the chickens loose in the fields to gobble up the bugs, and fertilizer comes from those same critters. Small farmers simply can't afford chemical ferts and pesticides - so they end up with less expense that way, and I benefit by getting food I know is 100% organic. Monsanto has also been banned from the country by constitutional decree - people here save their seeds from one generation to the next, and heirlooms are big business. This is not to say that the farmers from whom I buy my produce are poor in any way - they've often got fabulously large and well-decorated houses, they own their own land, and they'll generally have several vehicles and be putting kids through university on what they make off the fields. In contrast, I'm actually much less wealthy than they are, since even though I own a bakery, I rent the house I live in and have no vehicle.

That is the big reason for Farmers' Markets in the US. Except you now need to shop with eco groovy Peruvian woven market baskets

HA! In Ecuador and Peru (and Colombia, and most other Latin American countries), we use lovely big bags recycled out of old flour sacks. That's hilarious - nobody here would be caught dead with a market basket for their purchases - they simply aren't large enough or comfy enough to carry! The groovy eco-baskets are only sold to tourists....

I wonder why anyone would buy at the supermarkets.

There is a definite "trendy" aspect going on there. The noveaux-riches of this country wouldn't be caught dead at the farmer's market where I shop - good lord, they might step in some llama poop, or be subject to the slightly disagreeable smell of a ripe Borojo, or have to interact with the indigenous grandmothers who actually grew their strawberries! How terribly common! The people who buy their produce at the supermarkets have more money than good sense and/or are desperately trying to forget that their own grandmothers were small farmers.

I believe I did note that I buy mushrooms and asparagus at the supermarket, simply because they're not available anywhere else. What I do buy at the supermarket is good cheese, garbage bags, rum, and detergents - they're cheaper there than anywhere else simply because they can order those things in hideously large volumes. However, when it comes to fruits and veggies, grains, spices, and eggs, the farmer's markets will always have the stores beat hands-down for price and quality.

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Thinking about this in greater depth last night, I also recalled something about Ecuador. The country is food-sovereign in a way that very few others are. If we stopped importing all food tomorrow, the only thing that would change is that the price of beer would rise a bit (due to a switch-over to domestic barley) and we wouldn't have peaches in the "summer" - other than that, people would continue their lives in the same manner that they do today and with the same variety of food available. We have a saying here, which actually says a lot about the country and its attitude towards food - "in Ecuador, to starve you'd have to give up chewing."

[rykomatsu]

I cannot think of a single item, be it produce, meat, dairy, whatever, that is less expensive at the farmers' market I frequent.

Mmm...at the SF Farmer's market by the ferry building in the back, there was a shop that used to let me take herbs by the handful for $1 per type of herb...one time the seller even told me to take more. Definitely cheaper than the prepacked fresh herbs at grocery stores...

[EatNopales]

I have nothing against corn... my people were made of corn

However, and since you are there & in the business and know what is going on... can you tell me what Corn commodity prices would be without any government subsidies & without the ridiculously cheap energy costs we have come to be dependent on? Probably not as cheap as they have been right?

1) Without subsidies prices should be a little lower, but not as much as you think. The bookkeeping, accounting and legal fees are eating up way too much of that now. The problem might be a glut of CPAs and Attorneys who are now unemployed. Try and get them new jobs

2) I'm not really sure that energy costs have been too low or not. Up-thread you mentioned "big tractors". This afternoon I was able to confirm with a Farmer/MBA tillage costs. Next door they have one of those big ol rigs. It looks like a small apartment building on the horizon. It covers 1 mile of each operation in the time my tractor covers 400 feet. This time of year this thing is dragging a seeder that plants 24 rows. It even stops seed drops where it knows it has covered already. In one 10 hour shift it will seed 200 acres on 100 gallons of diesel. At last years prices that puts the farming energy costs at .0025% they could triple this year because of weather but that would be within the norm.

What will happen to Food Processors when they know for sure that Corn & Corn based by products (High Fructose Corn Syrup) are consistently more expensive than they are today. They either find substitutes, raise prices or a combination of both, correct?

Possibly, but how are the other sugars going to keep their price down? I'm not sure, most of the corn in this area is exported (we are close to the Mississippi River and they barge it downstream) or goes into feed. I'll look into the HFCS supply chain.

Now what will happen to consumer decisions once the price of all that processed junk that makes up the bulk of a supermarket (much of it refrigerated or frozen) goes up in price... will not more closely grown, less processed foods gain somewhat of a comparative advantage?

I would sure hope so, but as an advocate for healthier food I'd rather not tell someone they are eating shit, but show them how good better food tastes.

Look at the challenges we are likely going to face in the next 40 years:

1) Increased Petrochemical Costs as the BRICs industrialize & oil production starts declining / peaks (the price of gasoline, chemicals, fertilizers, food transportation, refrigeration, air conditioning, heating etc., all rise)

Generally agree, but there is always a chance of an energy type of discovery.

2) Stagnant Wages for 90 to 97.5% of Americans dampens Real Estate & consequently Land values and with it mortage backed Consumer Credit.. also shrinks the Tax base

I agree

Take just these factors together and we will likely see the following things happen:

1) Ratio of Sq. Ft Living Space per Person will drop (the relative cost of building materials, appliances, household energy will became a bigger share of our paycheck which itself will shrink on an Inflation Adjusted basis)

I agree, with children being much more like Japanese youth and staying home well into their adulthood. In other words we won't be able to get rid of the little mooches.

2) As tax revenue diminish / stagnate.. Government spends less money on Ag Subsidies, Military bases (which tend to subsidize remote areas), and Paved Roads (we are already seeing paved roads in the Rust Belt reverting back to dirt roads because the government can't maintain them)

Hey, I resemble that remark! I live on a gravel road. My truck is always dirty but it saves me $120/month in property taxes. I spend about $500 less in keeping it clean per year. Unthinkable in LA but I can live with it here.

3) As people huddle into less household space, and the network of paved roads shrinks.. land on the urban fringes & rural areas will become cheaper... plausibly cheap enough to encourage alot more farming.

I wonder where these small scale farmers will come from.

4) Processed food traveling long distances as going to become comparatively more expensive while locally grown, minimally processed food will become less expense.

That assumes that all food can be locally grown and processed. I still think lettuce growers from CA will have too big of an advantage to overcome the shipping costs.

<snip>

You make great points & have invaluable on the ground experience. Regarding your Apartment sized tiller... impressive machine.. but I must ask will the industrial infrastructure even exist in a high energy cost world where governments have a hard time keeping up roads. You are lucky to be located near rivers which may once again become crucial modes of transport, we might even say trains come back... but factor climate instability and the flooding we are seeing now... and maybe river transport will not be as cheap as it appears now.

The Canadian Baker made some great points about how Andean farmers can produce inexpensive, local produce... sharing overhead etc., that will become more & more true in the U.S. as well. In general, when it comes to food & widget production, we have become a capital (machine) intensive society vs. a labor (people) intensive society.. which of course is what industrialization is.. but industrialization needs cheap energy, cheap raw materials & subsidized infrastructure to make it economically feasible. In the U.S. we drink the Kool Aid of the free market economy... Andean farmers are the free market economy... in the brave new world... free market economies of the Andean & remote, less governed regions will become more the norm than the big government industrial welfare states of the 20th Century... in that environment farming will inevitably become less industrial more communal. Our house of cards is a minefield of subsidies & hidden costs (not born by the economic activities that produce them)... it is unsustainable, it will catch up to us... and the future will inevitably look different.