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Financial benchmarks and economic impact of local food operations

Key findings for communities

  • A University of Minnesota Extension investigation of 11 mixed vegetable enterprises in Central Minnesota found that most operated profitably, and growers were making an outsized contribution to their local economies.
  • The 11 operations in the study grossed $9,335 per acre in vegetable sales and retained $4,192, on average, after deducting annual cash expenses.
  • Their average net return, after considering depreciation, stood at $2,199 per acre.
  • The lion’s share of vegetable sales (75 percent) came from direct marketing channels, such as farmers markets, farm stands, and CSA arrangements. Wholesale marketing channels, however, accounted for 25 percent of total vegetable sales.

About this study

Generally, the 11 mixed vegetable enterprises that Extension investigated were not over-leveraged and had reasonable debt to farm ratios; all saw positive increases in net worth during 2014. Farm income, however, was not enough in most cases to cover family living expenses. Study participants garnered an average non-farm income of nearly $39,000 to support farm and family financial needs.

Measures of the economic impact of small-scale local farm operations indicated that small farms returned $232,550 more to the local economy per million dollars of output than conventional agriculture. Every $1,000,000 in output for small farms produced an additional $608,000 for the local economy, whereas conventional agriculture contributed $375,450 per million. The total impact of an estimated 65 small-scale vegetable farms in our 13-county study area brought in an estimated $1.1 million in wage and proprietor income.

Keywords: Food

More about this report

Read full report (PDF)

Author(s)

Ryan Pesch, Educator, Extension; Brigid Tuck, Senior Economic Impact Analyst, Extension

Reviewed in 2015

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