Improving Wholesale Local Food Procurement: A Farmer Choice Experiment

Food hubs and wholesalers are an increasingly popular way for farms to sell fresh produce to receive increased profits over direct-to-consumer and retail market channels, but little is known about what drives farmers preferences for accepting orders or not. With many food hubs relying on grants, increasing an understanding of farmer preferences on wholesale orders will help them reach long term financial independence. By designing an experiment based on both farmer and food hub input as well as 10 years of farming experience by the author, we created a novel designing with factors never addressed in the literature in this way. We administer a choice experiment to farmers that grow fresh vegetables in the United States to evaluate preferences of wholesale sales opportunities across key attributes including profit margin, packing specifications, delivery method, and order size. By analyzing farmer marketing decisions, food hubs can have a better understanding of how to design offers that farms are more likely to accept. This research also presents a new way for farmers to think about wholesale contracts offered to them. The analysis provides evidence of farmer preferences for food hub orders with more flexible packing standards, for crops with high profit margins, on farm pick-up, and a dislike of small orders.