Can Increasing Fuel Costs Make Locally Produced Food More Competitive?

Fresh produce in the United States often travels thousands of miles in diesel operated semi-trucks before arriving to market. Under a high fuel cost scenario, the current low cost, efficient supply chain could become a high cost organizational structure for US food distribution. Rising transportation costs of food sourced from distant locations may provide competitive opportunities for small- and mid-sized local producers if transportation costs are a smaller portion of their total costs. Farmers selling fresh produce in east Tennessee farmer markets are surveyed to obtain baseline information on their transportation energy use to deliver their products to market. Local farmers’ energy use is compared to three conventional transportation scenarios for fruits and vegetables grown in California, Texas, and Florida. A comparative analysis of conventional and local transportation energy consumption serves as an indicator of whether local farmers’ locational advantage in accessing nearby markets could open competitive opportunities over the conventional food supply chain in a high fuel cost scenario.