If you’re still wondering if local food is a fad, and whether you should build a local food component into your crop and livestock production, take heed of the latest consumer food price outlook from the University of Guelph.
The outlook, produced annually by a team led by Prof. Sylvain Charlebois, shows consumer interest in local food could be a bright spot for 2014.
Charlebois says local food, along with better nutrition, is likely to increase the demand for premium products from the farm, such as functional foods, omega-3 eggs and gluten-free items. And increased demand could mean better profits.
Not that next year is forecast to be gloomy for either farmers or consumers. Prices at grocery stores are projected to rise a maximum of two per cent on conventional items such as meat, grains and vegetables.
In some cases, they’ll even fall – Charlebois and his team say dairy and egg prices could drop up to 1.5 per cent.
Increased competition is said to be moderating the price change forecast. It would have been greater if the likes of Target, Costco, Wal-Mart and the Loblaws group weren’t slugging it out for consumer dollars. But this competition — called “intense” by Charlebois — shows no signs of abating.
Maybe that’s good for consumers, many of whom think they already pay enough for food. Indeed, food is a huge part of the consumer dollar, even though comparatively speaking, in Canada we dedicate appreciably less of our earnings to food than people in most other nations.
But while tight profit margins on food may help consumers in the short term, they can be hard on those who produce it.
Charlebois and others point to differentiation as a one way to greater profitability. People don’t seem to mind paying more for food they believe carries with it extra benefits. Local food fits that bill, with its aura of support for local economies, local people and local values.
Local food does not have to be seen as only the domain of small farmers and part-time producers. I know large grain and oilseed farmers who shake their heads when their operations are not mentioned in local food conversations. Why, they wonder, is their wheat not considered local food, although the loaf of bread it’s turned into is?
It may be a matter of marketing. At the Value Chain Management Centre in Oakville, Martin Gooch and his team have been trying to help turn around the image-poor Ontario potato industry. Interestingly, part of the team includes grocers who would be quite happy charging more for potatoes if consumers saw value in paying more – for example, if potatoes were considered part of the local food experience.
But mostly, consumers and grocers see potatoes as a cheap shopping cart item, Gooch says in the last of a three-part study on the industry, released earlier this week.
His advice to potato farmers is to market what consumers want, not what you want to sell.
And that pertains to potatoes or any other commodity. Gooch says the industry can take advantage of the many parts and participants in its value chain to turn a basic commodity such as potatoes into something more valuable.
Consumers want local food. Isn’t that what local farmers produce?
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