Mapping Competition Zones for Vendors and Customers in U.S. Farmers Markets

Farmers markets are an important market channel for farmers who want to sell their products directly to consumers. This sector has grown dramatically in the last 10 years, more than doubling from 2,863 markets in 2000 to 6,132 in 2010. However, the increasing number of markets obscures the number of failed markets. For example, the Oregon State University Extension Service, in a study funded by the USDA Initiative for the Future of Agriculture and Food Systems, noted that between 1998 and 2005, 62 farmers markets opened in the State and 32 closed, with little variation in the number of closures per year. A net gain of 30 markets for 62 openings signals a significant level of risk associated with new market ventures. The risk of failure may increase with intensity of competition among markets for vendors and customers. The viability of individual markets depends on attracting sufficient numbers of vendors and customers. Farmers markets must attract enough vendors to offer the quantity and variety of products needed to retain customer interest. Failure to take account of this potential competition for vendors and customers can be a serious problem for many farmers markets. Consequences could include declining or stagnant economic performance, possibly forcing some markets to leave the industry altogether. The maps that display the competition zones for U.S. farmers markets are generated from the weighted average distance traveled by vendors and customers to each market, based on responses to the 2006 USDA National Farmers Market Managers Survey, administered by USDA Agricultural Marketing Service (AMS) in partnership with Michigan State University. Market managers were asked to estimate the percentages of vendors and customers by distances traveled. To do this, managers estimated the relative share of vendors traveling 0 to 10 miles, 11 to 20 miles, 21 to 50 miles, 51 to 100 miles, or more than 100 miles to the market. For customers, the categories were 0 to 5 miles, 6 to 10 miles, 11 to 20 miles, 21 to 50 miles, or more than 50 miles traveled to market. The weighted distances for vendors were calculated by multiplying the percentage of vendors in each mileage category by the greatest distance for that category (10, 20, 50, or 100 miles, or 150 miles for the 100-plus category) and summing these five weighted distances to account for all vendors traveling to each market. The same procedure was followed for customers (percentage multiplied by 5, 10, 20, or 50 miles), except that 75 miles was used as a multiplier for the 50-plus category. To obtain a national picture of farmers’ market competition zones, the average weighted distances calculated from the sample in the USDA National Farmers Market Managers Survey had to be extrapolated to the entire United States. How far vendors and customers travel to a farmers’ market tends to correspond to the population density of the market location. The relative population density of each market examined in the study was classified by its county location, using USDA Economic Research Service (ERS) Rural Urban Continuum Codes (RUCs), a classification scheme that distinguishes three metropolitan county categories by population and six nonmetropolitan county categories by size of urban population and proximity to metro areas.

Lohr, Luanne & Diamond, Adam & Dicken, Chris & Marquardt, David, 2011. "Mapping Competition Zones for Vendors and Customers in U.S. Farmers Markets," Research Reports 146970, United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program.

Handle: RePEc:ags:uamsrr:146970
DOI: 10.22004/ag.econ.146970

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