What is the true cost of food?

What is the True Cost of Food?

November 13, 2019 Amy Gallo, Farmers' Market Programming Manager

It’s 7:00 am on a Saturday morning. Farmers are rolling into the parking lot of the SFC Farmers’ Market Downtown and unloading their goods onto tables.

Freshly picked bundles of spinach line up next to pastel arrays of radishes and chalkboard signs in the shape of chickens advertise fresh eggs for sale. Everything looks beautiful, tastes amazing, and is sold by small family farmers doing their part to grow sustainable produce and raise animals humanely.

It may seem a natural choice that any informed consumer would want to buy all their food from these bustling stands - if only we could afford it.

The idea that farmers’ market food is too expensive is pervasive and can seem insurmountable. After all, if food is grown with ethical practices then it must cost more. Right? While there is a ring of truth to this statement, it’s not the whole story and it’s not without cause.

Is shopping at the farmers’ market ‘more expensive’ than other retail outlets?

This is the question researchers at the Northeast Organic Farming Association of Vermont (NOFA-VT) addressed with a wide-ranging price comparison study in 2011.

They compared farmers’ market prices to grocery store prices for both conventional and organic food. On certain products, they found farmers’ market prices are very competitive – sometimes even less expensive – than traditional retail markets. For families who already purchase or are interested in purchasing organic, these results skew more in favor of shopping at a local farmers’ market.

However, the issue gets more complicated by the lack of regulation around bunches or units of food at farmers’ markets. Farmers typically bunch greens or root crops in the field and as the season changes a bunch of carrots can exceed a pound and bunches of greens can grow to double what you could find in the store.

In addition, farmers will often giveaway a freebie sample of the newest peppers or a bunch of herbs to returning customers. These factors can make a true comparison between farmers’ markets and grocery stores difficult to determine.

Scaling up means saving big

For certain items such as potatoes or eggs, conventional brick and mortar stores do business with large wholesalers who in turn get their products from large scale agriculture. Industrial farms focusing on one or two crops can invest in large equipment that cuts down on their time to harvest, seed or package their products. Feed is bought in quantities with lower unit prices, and inexpensive laborers fill in the gaps that technology can’t reach.

Let’s look at the difference between local and wholesale eggs. The median price of a dozen eggs at SFC Farmers’ Markets is $6. Grocery store eggs range from $2.50-$7 per dozen. If you purchase pasture-raised eggs at a grocery store – ones with a high animal welfare rating - you will probably spend the same amount of money as you would at a farmers’ market.

However, the eggs from the farmers’ market will be fresher and will often have better animal welfare practices than many grocery store eggs. Eggs labeled in grocery stores as “cage-free” are from hens that were only given on average 1-2 square feet of space. The hens at Milagro Farm, one of our SFC Farmers’ Market vendors, have an average of 100 square feet of pasture to roam per bird.

But why is food so inexpensive at grocery stores?

Urban and suburban grocery stores can often afford to sell food for much less than local farmers selling at a farmers’ market. Farmers operating at large scale have additional technology, inexpensive labor, government subsidies, grants, and the ability to buy seeds and other farm equipment in mass quantities, which makes the cost less per item.

Grocery stores set prices based on what consumers will pay. This forces large scale farmers to lower their prices in order to sell their products. This has led to the struggle our nations’ farmers face when trying to earn a living wage. Most US farmers–large and small–rely on income from second jobs.

Local farmers set prices according to the actual cost of growing food, often providing higher wages for their employees and utilizing better animal welfare practices than large scale agriculture.

How do our local farmers price their goods?

SFC Farmer’s Market farmers take many factors into account when setting customer prices:

Jon Sylvie of Copper Creek Ranch says, “We recently had a discussion at our dinner table about this very thing. I wanted to discuss raising our prices, but my wife and son were hesitant.” The money Jon and his family make from their heritage longhorn steer barely cover the operating costs of running the farm and doesn’t leave any room left over to touch the mortgage payment. “The reality is if I didn’t have off-farm income we couldn’t survive.”

Yet Copper Creek insists on keeping their prices in the realm of what their customers can afford. If people aren’t willing to pay the prices, you have to move the needle toward what is feasible for the average shopper.

Hat and Heart Farm similarly takes customer shopping habits and ideas into account when pricing produce. “We look a lot at what other farmers at the market are charging; we also take into consideration what this produce is going for in Whole Foods or Central Market. We always bear in mind what our customers are willing to pay - we want to be affordable for people.”

At the same time, they pay their employees a living wage and would like to pay themselves at the end of the day. This leaves margins very slim and a bad crop or rainy market day can really set them back.

Market vendors need to sell the majority of the products they bring into town for the market by the end of the day in order to cover costs and cut down on food waste. A reliable and consistent customer base helps to balance all the uncertainty inherent in farming.

What can you do as a consumer?

Change needs to come from both institutions and individuals; it’s going to take a concerted effort between policymakers, organizations like SFC, and consumers like you to help small farmers scale up and meet the demands of our food system.

We recognize that these issues are systemic, and at the same time, we all have the opportunity to support local farmers and sustainable practices by paying the true cost of food.

So you’ve made it to the SFC Farmers’ Market - how do you make sure you can contribute to a healthy food system and get the produce you want while staying within your budget?

Take a lap. Make sure to walk the whole market before you purchase anything to avoid buyer’s remorse and compare prices across stands.
Come with a plan! Think of some dishes you want to make, have a budget in mind, and even come with a finite amount of cash so you stop spending when you run out.
Be flexible. You can’t always predict what will be available at the market (although you can check out a seasonality guide here) so make sure you are comfortable swapping sweet potatoes for butternut squash, or Brussels sprouts for broccoli.
Come often. When farmers get to know their regular customers you may be pleasantly surprised with a small discount, a free handful of too small beets, or even hot items set aside waiting for you.

Food assistance benefits such as SNAP and WIC are also accepted at many farmers’ markets, including SFC Farmers’ Markets and other markets in Austin. Through Double Up Food Bucks Austin, these benefits are also doubled expanding access affordable access to local food even more.

See you all at the markets every Saturday, from 9 am-1pm, rain or shine!