Home > Agvocate, American Agriculture, Food and Food Safety, Technology > Fresh Food, Urban Centers and Fuel

Fresh Food, Urban Centers and Fuel

Last week, Derek Singleton, an associate through social media, sent me a link to an article he wrote and asked if I would post a response to it.  It was a crazy week, but I finally had a chance to give it some attention. Thank you for the opportunity Derek.

The Future of U.S. Food Distribution was a look at some trends related to demand by consumers for “fresh” food, food hubs in urban centers and the potential effect of higher fuel prices on distribution.  Derek believes that the current trends in United States could cause a significant disruption in current food distribution practices and potentially lead to a system as is in place in Europe.

Demand For Fresher Foods

While I concur that demand for fresh food has and is growing, as is the demand for organic food, I feel it is important to distinguish between these two segments. It is important to mention that simply because food is organic, does not necessarily mean that it is “fresh.” I should note that when I think of “fresh,” I am applying the definition of having been just picked or harvested. Derek presents clear evidence of the growth in the US organic market:

“The growth of the U.S. organics industry is informative: since 1990, the U.S. organics market has exploded in revenue from $1 billion to $26.7 billion.”

However, in my opinion, the success of the organic market is due in large part to the national demand, organics are no longer being consumed primarily locally, they are now also being shipped, out-of-state, cross-country and internationally. Certainly, companies like Whole Foods Market are performing very well, but as much as they like to sell local and regional, they still have to have out of season produce delivered from someplace. So, is demand higher for fresh and organic foods, yes, but just because something is organic, does not mean that it is “fresh.” It is not uncommon to find organic produce in the store or in a restaurant that has traveled several thousand miles and in some instances, from out of the country.

Urban Centers As Important Food Hubs

I agree with Derek that the growing demand for local food is complemented by the opportunity for urban gardens and a potential for European-style grocery markets. However, fuel prices, which I will discuss in the next section, will not play favorably towards “lower volume, higher frequency” sales. Essentially, if a person has to drive 50 miles round trip, gets 20 miles to the gallon, whether hauling 500 pounds or 2000, logically, they would want to deliver once per week, rather than make the trip four times. Having said that, I do believe that urban agriculture holds promise for providing consumers another choice for food. Derek cites some wonderful examples of successful urban gardening and reminded me of a futuristic article that I saw on Fortune Online, related to urban agriculture in Detroit.

While I agree with Derek that urban agriculture, if successful on larger scales, will provide additional supply,  I do not necessarily see it as causing less dependence on traditional forms, whether organic, conventional or somewhere in between; primarily due to the projected population growth of our country and the world.  I would also politely mention that while farms in the US are typically larger than those in Europe, over 90% are family owned and operated and that the farmers in Europe are not exactly “thriving.” Europe’s vast farm subsidies are facing challenges, especially as 2013 approaches. Further, with the limitations that have been placed on European farmers, there are many who are questioning the ability of their farms to be able to meet future demands. I believe that urban agriculture serves as a compliment to rural agriculture. I do not believe that it is an “either/or” situation; rather an opportunity for both to be successful and meet different demands.

Gas Prices and Distribution

Derek’s final factor to encourage a European style of distribution is the cost of fuel. No argument from me…fuel prices are going to play a major role in the production of food. However, I also believe Derek makes the argument that supports our current system:

“a food distribution network that relies heavily on centralization, which makes it cost-effective to ship high-volume loads.”

Centralization and being cost-effective and efficient in shipping high volumes is part of what makes American agriculture so unique and successful.With technology continuing to provide tractors with more horsepower, more fuel-efficient and more precise, I would offer that higher fuel, equipment and input cost could actually cause smaller farms to be absorbed by larger farms, simply due to efficiency of production and lower costs per yield; resulting in the opposite effect as described by Derek.

With no disrespect intended, I believe that the styles of distribution, between the United States and Europe, are a result more of how the continents were settled, rather than due to cost of fuel. I look at the New England states and see some similarities with Europe. However, as one moves west, away from “densely populated” areas, the style of agriculture production changes. Europe historically was divided into kingdoms, that essentially had to be self-sufficient and that ability to provide regional food has continued and should be commended. On the flip side, once the United States was settled and expansion west began, commodities were produced to provide for the family, not a kingdom and the extra was sent to the “city” for sale. The introduction of the railroad further encouraged this style of production and delivery. Further, with the tremendous diversity in climates in the United States, specialization in crop production, within regions, is actually beneficial.

Conclusion

Finally, while I believe that Derek makes some very significant points that might lead some to believe that we will move towards a European style of distribution, I struggle to see that outcome with the continuing increase in population. That is not to say, however, that we will not continue to see a growth in market share for local and organic food. I also have seen and believe we will continue to see improvement in the ability, in some areas, for regional food systems to thrive.  Certainly, increased input costs will play a major role in shaping availability and impacting demand of food. However, the American farmer and rancher have been and always will be able to adapt and overcome the challenges they are faced with. I foresee a very bright future, for all involved in agriculture; whether urban or rural, small or large, organic or conventional…it will take all of us to provide for and meet the needs of future generations.

Once again, thank you Derek for asking me to provide a response.

  1. david neville
    March 5, 2012 at 8:22 AM

    Let me first just say I am extremely excited about small farms and rural folks having a say in the debate about “Fresh” foods. We have a Produce Auction in Campbellsburg, KY (www.capstoneproducemarket.com) and have seen the increase in demand for locally grown, fresh foods skyrocket. Metro Louisville alone is looking to increase the consumption of local foods to 10% of their food dollars (currently estimated at $3B) by the end of 2015. Schools in KY are trying to increase fresh produce in kids lunches and this may be another $150M market. If one were to add up all the “demand” for fresh/local foods in KY the number could be over $500m. I think most of this demand if it is to be met will be from small farms that used to raise tobacco. I also believe that this gives the greatest opportunity for young farmers that we have ever seen. I am encouraged that Agriculture here in KY is alive and kicking.

    • commonsenseagriculture
      March 6, 2012 at 10:04 AM

      Thank you for sharing David!

      It’s great news that there are opportunities in KY for the younger generation to get involved. Without them, our future is bleak.

  2. March 5, 2012 at 2:39 PM

    I really enjoyed reading your blog post today. You put a very good spin on a “everyone is welcome” type of agriculture and I really appreciate that. I think it’s easy to say one is right and the other is wrong, but I agree that more diversity in our food systems leaves room for more choices! Thanks for you insight!

    • commonsenseagriculture
      March 6, 2012 at 10:06 AM

      Appreciate the comments, thank you :-)

      It’s going to take all of us working together. Alienating and throwing people “under the bus” will not solve the challenges that face us.

  3. March 5, 2012 at 3:40 PM

    Great insightful post as always Jeff. I’m all for people growing organic & consumers insisting on local food. Choices are what make the world go round! I also tend to think on a bigger scale though…Who is going to produce food for the third world countries who depend on bigger more advanced agriculture entities to feed them. Not every place in the world is capable of growing enough food to feed its people.
    A lot of my Co-ops milk is turned to Non-Fat powder and shipped to these places. Its also exported as cheese. It serves a vital need in the world today. These are some of the things people tend to forget when going on the attack of “big ag”.

    • commonsenseagriculture
      March 6, 2012 at 10:07 AM

      Great points Trent, thank you for sharing :-)

  4. March 6, 2012 at 7:04 AM

    Isn’t it amazing how GAS and the jerks that control most of the oil in the world end up affecting everything! And, we have PLENTY of it here but Obama and Co won’t allow us to get at it! UGH!

    • commonsenseagriculture
      March 6, 2012 at 10:11 AM

      It is unbelievable, isn’t it? I’m all for developing alternative energy solutions, but allow it to develop on its own merits and allow the market to work. I’m tired of “leaders” from both sides artificially promoting this, that or the other, simply for political gains.

  5. March 6, 2012 at 3:06 PM

    I love to see a post like this. Especially, in the times we are in where everything is organic or grow local. I do think that both of those are very good options and if people can afford it than more power to them if they want to purchase only grown local and/or organic food. I personally though do not think that it is a viable option for everyone. I personally worked at an organic farm for a summer and I learned a lot and had many great experiences but one thing I did learn was with growing organically there is a lot of added cost because a farmer loses such a higher quantity of their crop due to pests and disease that could be prevented by pesticides and herbicides. Although, because they were organic there was not a lot they could do about it. I do understand though that many people like the thought of their food not having pesticides or herbicides on it but because of not using those products the cost of their food goes up by a large margin.

    Along, those same lines because of the added cost the food is not affordable for everyone. In hard times like this people are looking for the cheapest and most economical option. With that being said I don’t think that we can manage to grow our food European style with out a severe increase in cost and also I feel we would not have enough food to provide for everyone in our country and to still be able to export like we do.

    I just wanted to mention my point of view. So, in conclusion I do think that organic or grown local is a good option if you can afford it but I do not think it will be the only way we grow things in the future. With the large increase in population we will not be able to provide enough food if we revert back to the old ways of growing food and people would not be able to afford it if we did in my opinion.

  6. May 1, 2012 at 5:34 PM

    I have to agree with you. If we don’t find a new way for distribution we will not have European style of agriculture. Thanks for great facts.

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