Some times you see a news headline that you just need to reread because as you read it, you can feel the world start to shift into something different than before. This morning, that headline was:
Amazon is Buying Whole Foods in $13.7B Deal
It’s too early to unpack what this could mean for Whole Foods customers, obviously we hope for lower prices on our favorite organic brands–but it does put a significant portion our food system in the hands of yet another giant, a giant that is competing with Apple and Google in a race to be the first company valued at a trillion dollars.
But let’s say it does mean we get to save a couple bucks here and there, is that where to true value is? I wonder what it would look like if we started doing valuations on our communities. When farmers spend money on inputs which are locally produced and consumers buy food which is locally grown, the money which would have otherwise gone outside of the region now stays within. Here are some findings from a 2004 study of southeast Minnesota’s farming community:
- the study found that a yearly average of $800 million was leaving the community as a result of farmers purchasing out-of-state inputs and consumers purchasing food produced via industrial agriculture
- if 15% of those food dollars were shifted to regional farms,the community could generate $45 million in income
- $45 million in income ultimately would contribute $88.5 million to the area’s overall economy.
- Researchers estimate that roughly 2000 new jobs and $200 million in new income would be generated if state farmers sold only 3 times more produce in-state than out.
In Michigan, roughly $1.9 billion is spent yearly on fresh produce which is grown out of state, despite the fact that the state grows the second largest variety of produce nationwide.
Research conducted in other states demonstrated similar statistics:
- In Seattle, shifting 20% of food dollars toward local farms would result in nearly $1 billion dollars being added to the local economy each year.
- Illinois found that its citizens spend $48 billion on out-of-state food annually, while most farms in the state grow commodity crops for export. Estimates indicate that a 20% increase in local food production,processing, and purchasing would generate an astonishing $30 billion statewide.
Termed the “local multiplier effect”, this powerful economic impact is largely due to the fact that locally owned businesses are more likely to re-spend their money in the community. Indeed, a growing body of research indicates that a dollar spent on a locally owned business circulates 2 to 4 times more in the community compared to that same dollar spent at a non-local business.
The other truly great thing, you really don’t have that much impact on the valuation of Apple, Google, or Amazon. I doubt they’d miss you. But you absolutely have a powerful impact on your local community, because every dollar spend locally, multiplies. Way to get bang for your buck!