ERS Releases Report Comparing Food Supply Chains

The Economic Research Service (ERS) of USDA released a report, "Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains."

The purpose of the study was to address factors "that influence the structure and size of local food supply chains" and to compare local food supply chains with mainstream supply chains on "performance indicators."

Findings from the Report Summary include:

  • While "local food supply chains, particularly direct market ... are more likely than mainstream chains to provide consumers with detailed information about where and by whom the products were produced, ... supply-and-demand relationships and product differentiation  ... such as organic or grass-fed" is the primary influence on whether consumers are willing to pay a higher price for the product.
  • Local supply chains "have adequate access to processing and distribution services," but they incurred a higher per unit cost for the services.
  • "Producers receive a greater share of retail prices in local food supply chains than they do in mainstream chains."  In all direct marketing chains examined, however, "producers assume responsibility for additional supply chain functions" which can be costly.
  • "Transportation fuel use is more closely related to supply chain structure and size than to the distance food products travel."

The study was conducted using a series of 15 case studies in five metropolitan areas.  "Three supply chain types (mainstream, direct market, and intermediated) were studied for each of five product-place combinations."  "Primary data were collected through interviews and site visits with principals of farm enterprises, supermarkets, cooperative grocery stores, retail distribution centers, and food processors."

For the ERS Report Summary, click here.
For the full ERS Report, click here.
For more information on the ERS report, click here.

Posted: 06/23/2010