Chang, Kuo-Liang

Warmann, Jerry

English

Research Papers in Economics

 
*Contact the author at kuo-liang.chang@sdstate.edu or 605-688-4141. 
 
            E C O N O M I C S 
   C O M M E N T A T O R 
South Dakota State University      No. 535                      December 8, 2011
 
REASONS TO SHOP AT 
FARMER’S MARKETS: 
 A SURVEY STUDY IN  
SOUTH DAKOTA 
 
by 
Kuo-Liang Chang *, Assistant Professor;    
Jerry Warmann, Professor/Extension Specialist; 
Alexandre Schultheiss and Felix Richard, 
 French Interns, ENSAT - Toulouse 
 
The growth of farmer’s markets and other 
community supported agriculture programs in recent 
years has coincided with consumers’ increasing 
demand for access to locally-produced products. 
This resultant demand has provided new business 
opportunities for local small producers. Despite the 
on-going trend of farm consolidation and 
international competition, smaller farms ($50,000–
99,999 in sales) still contribute approximately $1 out 
of every $8 of direct agricultural product sales 
(USDA-NASS, 2006).  In fact, the number of 
farmer’s markets has grown from 2,410 in 1996 to 
6,132 in 2010 (USDA-AMS 2011). In recent years, 
the operation period of farmer’s markets has 
exceeded the conventional expectation by expanding 
into the winter season even in several states that 
have severe winter conditions. In 2010, the number 
of winter farmer’s markets operating in 
Pennsylvania was 42, with 153 in New York and 20 
in Michigan (USDA AMS 2011).  
 
However, despite the on-going new business 
opportunities for farmer’s markets in the U.S., little 
is known about the main reasons that determine 
whether local consumers will shop (or not shop) at 
farmer’s markets in urban and rural South Dakota. 
With support by the Chicoine Family Excellence in 
Economics Fund at South Dakota State University, a 
group of researchers in the SDSU Department of 
Economics conducted a consumer survey study to 
identify the key reasons why local consumers 
choose to shop (or not to shop) at farmer’s markets. 
It was expected that the study results would provide 
insightful information for local producers to 
efficiently locate targeted consumers and to enhance 
their marketing strategy.  
   
Data Collection 
The survey questionnaire was designed and 
delivered at farmer’s markets in four different 
locations from July to August 2011. In Sioux Falls, 
353 questionnaires delivered and 110 were returned 
for a response rate of 31.2%. After deleting 
responses with missing values or unusable answers, 
the number of eligible observations was 97. In 
Huron, Brookings, and DeSmet, 352 questionnaires 
were delivered and 126 were completed for a 35/7% 
response rate. After deleting those with missing 
values or unusable answers, 100 were used in the 
analysis.  
 
Overall, the data suggest that there are no significant 
differences in the demographic and social 
characteristics of consumers at farmer’s markets in 
the urban and rural areas. Both groups of consumers 
had very similar levels of nutrition knowledge and 
attitudes of healthy behavior. The higher income of 
the urban consumers did not transfer to higher food 
budgets. On the other hand, rural farmer’s markets 
consumers were more likely to be the main grocery 
shoppers for the family. Rural consumers also 
tended to have lower incomes, less education, and 
higher consumption of red meat than urban 
consumers (more detailed information is available 
upon request from the contact author).  
  
 
Reasons to Shop at Farmer’s Markets 
Respondents were asked to select all the possible 
reasons that would affect their decision to shop or 
not to shop at the farmer’s market. Table 1 
summarizes the frequency and rank of each reason 
selected by the respondents in the Sioux Falls 
location.  
 
Table 1.  Reasons to Shop Farmer’s Markets –  
Urban Consumers  (Sioux Falls)_       
Reasons          Frequency   Rank   
Support Local  76  2    
Lower Price  7  9 
Better Quality  90  1 
Food Safety  20  7 
Family Enjoys Visiting FM Together  27  4 
Family Prefers FM Food  23  5 
Entertainment  48  3 
Word of Mouth  9  8 
Personally Meet Growers  21  6 
Happen to Pass By  1  11 
Other  4  10   
 
Better quality is the most important reason urban 
consumers shop at farmer’s markets. The concept of 
supporting local producers is the second most 
important reason.  Both of these reasons have been 
identified by the literature as key elements to the 
success of farmer’s markets. Although previous 
studies found that consumers are willing to pay 
higher prices for locally-produced products, local 
growers should remember that the estimated 
Willingness to Pay (WTP) for local food from 
previous studies in other geographic regions is often 
inconsistent even for the same products. Consumers 
tend to combine their willingness to pay for local 
food with other product attributes such as freshness, 
taste, fairness, food safety, etc. 
Interestingly, urban consumers identified 
“Entertainment” and “Family Enjoys Visiting 
Farmer’s Market Together” as the third and fourth 
reasons to shop at farmer’s markets. This result 
suggests that local producers and managers should 
include more alternatives for consumers to explore 
at the farmer’s market. In addition to traditional 
sales activities, farmer’s markets should be 
encouraged to include other activities (such as live 
music performances or children’s playground?) or to  
 
collaborate with nearby local shops and restaurants 
to provide more entertainment options.    
To our knowledge, there has been little research and 
few previous studies emphasizing the importance of 
family decision-making in consumer’s consumption 
decisions for using the famers’ markets. Data from 
this survey indicate that “Family Members Prefer 
Food from Farmer’s Market” is the fifth important 
reason for consumers in South Dakota to shop at 
farmer’s markets. Based on this finding, we suggest 
that the managers at farmer’s markets should  
recognize the importance of family decision-making 
concerns and allow more family-oriented activities 
at the farmer’s markets. For example, design more 
space to allow consumers to taste the food and rest; 
more family-oriented entertainment; child-friendly 
food/product options and activities; or more family 
restrooms.     
Consumers in the Sioux Falls area also indicate that 
the direct connection with growers is an important 
reason to shop at farmer’s markets.  
 
Table 2.  Reason to Shop at Farmers Market –  
Rural Consumers  (Brookings, Huron, DeSmet)   
Reasons        Frequency   Rank   
Support Local           78      2 
Lower Price  11  8 
Better Quality  95  1 
Food Safety  21  5 
Family Enjoys Visiting Together  18  7 
Family Prefers FM Food  22  4 
Entertainment  24  3 
Words of Mouth  3  10 
Personally Meet Growers  20  6 
Happen to Pass By  7  9 
Other  3  10   
 
Compared to consumers in the urban area, rural 
(Brookings, Huron, and DeSmet) consumers have 
similar reasons to shop at farmer’s markets.  
However, food safety became the fifth reason to 
shop at farmer’s markets among rural consumers. 
The role of family decision-making is still very 
important, as “Family Prefers FM Food (Food from 
Farmer’s Market)” and “Family Enjoys Visiting 
(Farmer’s Market) Together” are listed as the fourth 
and seventh reason, respectively. 
  
 
Reasons Not to Shop at Farmer’s Markets 
Table 3 summarizes reasons that discourage urban 
consumers from shopping at farmer’s markets. The 
schedule (hours of operation) is the most important 
reason that prevents consumers from visiting 
farmer’s markets more often. Except for the usual 
Saturday morning, farmer’s markets in South 
Dakota are only open in the time period (usually 
between 4:00 pm to 5:30 pm) that many consumers 
are still at work. Consumers who work fulltime jobs 
express concern that the products they look for are 
usually sold out when they arrive at the market. 
Therefore, managers of the farmer’s markets might 
consider adjusting their hours, or rearranging the 
marketing strategy for consumers with 8 to 5 
working schedules.   
The fact that price concern (too expensive) is listed 
as the second major reason that discourages 
consumers from shopping at farmer’s markets sends 
an important message.  While consumers often are 
willing to pay a higher price to buy locally-grown 
food, local growers should recognize that most 
consumers are relatively price sensitive, especially 
for lower income consumers. Because maintaining 
high quality food is costly, we encourage local 
stakeholders to collaborate with SDSU researchers 
to identify the key product attributes that would 
incur higher price premiums for the locally-grown 
food. Growers would then be able to develop the 
most efficient production and price strategy for their 
products. 
 
Table 3 indicates that consumers also see the 
location of farmer’s markets as an important factor 
that discourages them from visiting more often. 
Indeed, many consumers in the Sioux Falls area 
have to take a special route to visit the farmer’s 
market in the northern part of Sioux Falls Park, 
where no other shopping or restaurants are located 
within the nearby walking distance. Managers and 
policy makers are encouraged to combine the 
entertainment consideration with the location 
concern to redesign the marketing strategy or 
options for the farmer’s markets. For example, 
invite more food vendors, live music, or other 
family-friendly entertainments to the markets.  
 
Table 3.  Reasons Not to Shop at Farmer’s 
Market -- Urban Consumers       
Reasons        Frequency   Rate   
Distance/Location           28      3 
Too Expensive  31  2 
Hours are not friendly  41  1 
Short of Options/sold out soon  9  7 
Family Members Dislike FM  0  10 
Not Enough Meat Products  11  5 
Not Enough Vegetable/Fruit Options  11  5 
Prefer to Buy at Supermarket  15  4 
Food Safety Concerns  0  10 
Quality Concerns  0  10 
Never think about buying at FM  3  8 
Forgot the Schedule  2  9 
Grow own Food/Buy from Friends  0  10 
Winter  2  9   
   
Urban respondents also highlight the problems of 
product options and quality limitation at the 
farmer’s market. However, this problem can be 
eliminated once more local sellers join the markets, 
along with more consumers, to create “economies of 
scale.”  
Table 4.  Reasons Not to Shop at Farmer’s 
Market – Rural Consumers       
Reasons        Frequency   Rate   
Distance/Location           16      6 
Too Expensive  29  2 
Hours are not friendly  40  1 
Short of Options/sold out soon  18  4 
Family Members Dislike FM  1  12 
Not Enough Meat Products  9  7 
Not Enough Vegetable/Fruit Options  24  3 
Prefer to Buy at Supermarket  16  5 
Food Safety Concerns  3  10 
Quality Concerns  1  12 
Never think about buying at FM  9  8 
Forgot the Schedule  4  9 
Grow own Food/Buy from Friends  2  11 
Winter  0  13   
 
Table 4 suggests that rural consumers have a very 
similar concern of product shortage. Specifically, 
the shortage of product options became the third 
ranking reason that discourages rural consumers 
from visiting farmer’s markets. Instead of treating 
this concern as a problem, local producers need to 
see it as an opportunity to expand local food 
markets. With more producers and products joining  
 
the market, farmer’s markets will be able to enjoy 
the “economies of scale” and lower selected product 
prices to attract more consumers. 
  
Summary 
Locally grown agricultural products have gained 
consumers’ acceptance in recent years. The resultant 
increase in demand for locally-grown food has 
provided new business opportunities for smaller- 
and medium-scale farmers.  
 
This study identifies the most important attributes 
that determine consumers’ decisions to shop or not 
to shop at local farmer’s markets in South Dakota. 
The survey data suggest that food quality, 
supporting local producers, family entertainment, 
and food safety are the main reasons which 
encourage local consumers to shop at farmer’s 
markets. On the other hand, unfriendly business 
schedule, price concerns, limited product options, 
and limited quantity are reasons that prevent 
consumers from shopping more at farmer’s markets.  
 
We encourage local producers and market managers 
to utilize the information generated by this study to 
explore further market opportunities and to enhance 
the current marketing strategies. 
 
Acknowledgements 
We would like to express our gratitude to Mrs. Judi 
Reilly, Mr. Henry Katternberg, Mrs. Harriet 
Katternberg, and Mrs. Connie Halverson, vendors at 
the farmer’s markets, and all the survey participants 
for their assistance and kindness. We would also 
like to thank the staff of the Department of 
Economics at South Dakota State University for 
their inputs. This study is funded by the Chicoine 
Family Excellence in Economics Fund. 
 
References 
U.S. Department of Agriculture, AMS. “Farmers Market 
and Local Food Marketing”, 2011.   Internet site:  
http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateD
ata.do?template=TemplateS&navID=WholesaleandFarm
ersMarkets&leftNav=WholesaleandFarmersMarkets&pa
ge=WFMFarmersMarketGrowth&description=Farmers%
20Market%20Growth&acct=frmrdirmkt 
 
U.S. Department of Agriculture, National Agricultural 
Statistics Service. Agricultural Statistics Book 2006. 
Washington, DC: Government Printing Office. 
**************************************************************** 
ECONOMICS COMMENTATOR 
**************************************************************** 
Department of Economics       
South Dakota State University              Phone: 605-688-4141 
Box 504   Scobey Hall                  Fax:   605-688-6386 
Brookings, SD 57007-0895       E-Mail: Penny.Stover@ sdstate.edu 
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Reasons to Shopt at Farmer's Markets: A Survey Study in South Dakota

http://repec-sda.sdstate.edu/repec/sda/pdf/Commentator/No535.pdf

Reasons to Shopt at Farmer's Markets: A Survey Study in South Dakota

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