Locational Advantage and the Impact of Scale: Comparing Local and Conventional Fruit and Vegetable Transportation Efficiencies

Some have suggested that in order for local foods to reach broader consumer segments and become price-competitive with foods sold in mainstream market channels, local farmers need to scale up their production and distribution operations to match the efficiencies of the conventional food system. In this study, we take a first step in evaluating how scaling up production and distribution could make locally produced foods more competitive with the conventional food system. We compare the transportation efficiencies of the conventional and local fruit and vegetable transportation networks in Knoxville, Tennessee, and determine the Knoxville-area food system's competitive transportation zones, defined as the region in which local farmers' shorter travel distances to market give them a locational advantage in transportation over their long distance, conventional food supply chain competitors. We analyze the extent to which local farmers' scales of production and distribution affect their transportation efficiencies, and we investigate factors that could improve their competitiveness with conventional distribution networks. We find that farms located within 25 miles (40 km) of the downtown market tended to deliver their produce to market at least as efficiently as conventionally distributed foods from California. More distant farms needed to scale up their production and distribution operations to remain within the competitive transportation zones. Investigating travel distance thresholds could provide policy-makers with useful information in planning land use and infrastructure investment projects for local food systems and in designating sustainable geographic boundaries for foodsheds and local food economies

Can Increasing Fuel Costs Make Locally Produced Food More Competitive?

Fresh produce in the United States often travels thousands of miles in diesel operated semi-trucks before arriving to market. Under a high fuel cost scenario, the current low cost, efficient supply chain could become a high cost organizational structure for US food distribution. Rising transportation costs of food sourced from distant locations may provide competitive opportunities for small- and mid-sized local producers if transportation costs are a smaller portion of their total costs. Farmers selling fresh produce in east Tennessee farmer markets are surveyed to obtain baseline information on their transportation energy use to deliver their products to market. Local farmers’ energy use is compared to three conventional transportation scenarios for fruits and vegetables grown in California, Texas, and Florida. A comparative analysis of conventional and local transportation energy consumption serves as an indicator of whether local farmers’ locational advantage in accessing nearby markets could open competitive opportunities over the conventional food supply chain in a high fuel cost scenario