Local Food Markets Orientation and Labor Intensity

AAEA President-Elect and co-authors release new research in AEPP

There are expected tradeoffs of farms choosing between efficiency and “equity” as less efficient supply chain processes may be needed to offer buyers in local markets the customer service and product assurances they seek. However, such “high touch” customer service is likely needed to secure the prices producers seek when they position their products to be higher quality, more sustainable or better for the local community than conventionally procured products.

In the new research “Local food market orientation and labor intensity” released in the Applied Economic Perspectives & Policy, Becca Jablonski, Allie Bauman, and AAEA President-Elect Dawn Thilmany McFadden look into repositioning food and agricultural supply chains towards more localized markets and how they affect the role of human capital in the business model.

Jablonski says, “Farm sales through local and regional food markets require more labor (as a percentage of total variable expenses). Given challenges accessing labor due to an increasingly difficult immigration system for employer and workers to navigate,  and more recent issues related to COVID-19, this may create particular hardships for farms and ranches that depend on local food markets. Yet, the higher wages paid and nature of the work (focus post farmgate including on marketing, processing, distribution, and customer service) may be of interest to a broader set of workers.”

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ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.

Contact: Allison Scheetz
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