Farmers Market Boom Is Leveling Off

Here's why growth in the number of farmers markets is leveling off.

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After more than a decade of rapid growth, the number of farmers markets in the U.S. is slowing.

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"Folks have been talking about a farmers market around here for the better part of the last nine years," said the manager of the Suitland Farmers Market in Suitland, Md., as she helped to set up for the Tuesday-night market.

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The farmers market in what Vincent calls a "low- to mid-income" neighborhood of the Washington, D.C., suburb is in its first year, and she says it took a lot of work to get there. Finding the parking lot for hosting the market, getting permits in order, and setting up the capability to accept food stamps were two early challenges she faced, but she adds that attracting shoppers is now the key hurdle.

"Our big challenge right now is spreading the word," she says. "All the folks that I've met have been supportive and wonderful, but it isn't really a thing that's been available in this neighborhood for a while," she says, adding that she's looking into radio and local paper advertising since many neighbors don't have computer access.

According to government data, new markets like Vincent's may soon be tougher and tougher to come by. In celebration of National Farmers Market Week, the U.S. Department of Agriculture this week released figures showing that farmers markets have posted explosive growth in recent years, but that growth is slowing. This year, there are 8,144 farmers markets in the U.S., just a 3.6 percent increase over 2012. That compares to growth of near 10 percent in 2012 and of more than 17 percent in 2011.

"That says that something that grows really rapidly can't continue to do that forever," says Larry Lev, a professor and extension economist at Oregon State University who studies farmers markets.

The rapid growth in farmers markets in recent years has been a result of several factors: the local food movement, the desire to support local businesses and farmers, and community-building all have contributed.

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Ironically, the growing popularity of farmers markets on a large scale can end up hurting some individual markets. As new markets sprout up, the competition in some cities is getting too intense. Places such as San Francisco and the Twin Cities have noted in recent years that they might be reaching a critical mass of the markets.

That market saturation in some cities may be behind the slowdown in farmers market growth, Lev says.

"There's only so many markets that you can stuff into an area," says Lev, pointing out that when too many markets open up in a city, they eat into each other's sales. "So there began to be in these key urban markets a shortage of producers to sell."

The numbers suggest there's plenty more room for growth – Americans spent $7 billion on locally sourced food purchases in 2011, according to USDA data, compared to the nearly $700 billion they spent on groceries in that same year. What may be at issue is that farmers markets have expanded into the "easy" areas, where consumer demand is high and populations are dense.

"We're running into the 'low-hanging fruit' limit, where the easy stuff is gone," Lev says.

Beyond that limit are places where it's tougher: sparsely populated areas or areas where there is less interest.

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While growth slows, new markets also face the perennial problem of getting established. An analysis of Oregon farmers markets co-written by Lev found that while the number of markets posted steady growth over a seven-year span, 62 new markets opened, but 32 did not reopen during that same period. In addition, 25 percent of markets didn't make it past their first year.

One reason is that many are fragile enterprises. Many markets are volunteer-run, often by people with other jobs and responsibilities. If the chief organizer leaves town, that can leave the market without a central organizer. In addition, some markets find they don't have enough of a consumer base to be sustainable.

Getting and keeping customers interested are key issues facing Vincent. She says she wishes she had the problem of too much competition.