Inflation's silver lining — shoppers choose local food over national brands as prices increase
High input costs have pushed up food prices at grocery stores. But local farmers have been able to keep prices more stable, and that’s attracting new customers.
Jenny Osner changes out the price tags every Monday at Hired Man’s Grocery, which she runs with her husband in Conway Springs, Kansas. Lately, it’s been taking twice as long to switch the price signs.
With inflation pushing up food prices by 12% according to one estimate, Osner said there are more price increases than price decreases.
Some items on the shelves have stayed more stable – the local goods Osner buys from nearby, small-scale farmers.
Local goods are typically more expensive than a product that’s being trucked in by a big brand. Producers don’t benefit from massive economies of scale and often charge premiums for the higher quality of their goods.
But local farmers are more insulated from rising input costs for things like gasoline and fertilizer and have been able to keep prices more stable than big brands.
“I think it’s a gift for this food that local producers can capitalize on,” said Sean Park of Western Illinois University’s Institute for Rural Affairs. “The food is much better quality and now it’s also price competitive.”
Park said while national brands rack up costs by traveling long distances or passing through middlemen, local food’s small scale protects it against intense inflation shocks and price volatility.
Rial Carver speaks with grocery owners and local producers across the country. She's with Kansas State University’s Rural Grocery Initiative and Kansas Healthy Food Initiative.
“We’re seeing local products become more competitive and be able to stand up to the pricing of national brands,” Carver said. “As national brand pricing increases, local producers may not be as affected by inflation and may be able to keep their prices the same.”
Osner watched this play out in her egg aisle. Egg prices are nearly double what they were a year ago, but local farmer Emily Beck was still charging the same price.
“People were of course wanting to buy her farm fresh eggs, because it was the cheapest product in the store in that category,” Osner said. “We were going through her eggs and the shelf was getting cleared pretty quickly before anybody would consider the other brands.”
Beck raises chickens and vegetables in Conway Springs. She said she’s also feeling the impacts of inflation – her chicken feed is pricier and she’s paying more for egg cartons – but she hadn’t increased her prices the way big companies like Cal-Maine Foods had.
When Osner saw customers opting for Beck’s eggs over the more expensive store brand, she saw an opportunity. Osner and Beck agreed to raise the price of the local eggs. Even with the hike, Beck said demand is as high as ever and her product is still competitive with the big brands.
Beck and Osner see the inflation and supply shortage pains as a potential silver lining for local farmers and their customers.
“The warehouses are having a hard time finding things, so I do think it’s a good opportunity for more people to be able to go in and grow produce or provide fresh eggs,” Beck said. “The public would rather have a farm fresh egg than something that’s shipped in.”
Carver said rural grocers and local farmers can work together when big companies are tripped up by inflation or supply chains.
“It’s a chance to show shoppers that they don’t have to drive 30 miles to the larger store, they can find the real food that’s from the community, right at home,” she said. “Small town grocers and local producers should be talking about how to highlight the special offering they bring to the table.”
After all, it often only takes one bite of a fresh tomato to win over a customer, Carver said.
Follow Elizabeth on Twitter: @Ekrembert
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest. It reports on food systems, agriculture and rural issues. Follow Harvest on Twitter: @HarvestPM