Berry, John, Ag Marketing Educator, Penn State Extension
Brian Moyer, Program Assistant, Penn State Extension
Lydia Oberholtzer, Senior Researcher, Penn State Agricultural Economics, Sociology, and Education

ABSTRACT

The number of farmers’ markets in the U.S. has rapidly grown over the last twenty years. Farmers’ markets can be a good way for farmers to develop business skills, expand their business, and build a customer base. Assistance from Extension staff can be an important component for the long-term success of farmers’ markets. Using results from a survey of farmers’ market mangers, this paper assesses the technical and information needs of Pennsylvania farmers’ markets, and examines how markets in different development phases may vary in their training needs. Market managers highly desire assistance with advertising and publicity of the market, improving the operating budget, increasing federal nutrition benefit sales, improving sales per vendor, and increasing customer numbers and volunteers. Start-up and growth markets are in the most need of this assistance, and outreach to these markets should be emphasized.

Introduction and Background

The number of farmers’ markets in the United States has rapidly grown over the last twenty years. The U.S. Department of Agriculture (USDA) listed almost 7,900 markets by mid-2012, up from 1,755 in 1994 (USDA AMS, 2012). Often farmers’ markets are promoted as a way to increase farmer incomes and enhance local and regional food systems, provide economic development in communities, and protect local farmland (Oberholtzer & Grow, 2003). Farmers’ markets can also be a good way for farmers to develop entrepreneurial and business skills, expand their business, and build a customer base. Farmers also consider the markets as a way to overcome a number of barriers. Benefits include relatively low costs in starting and operating a business at a farmers’ market, market manager expertise in marketing, information sharing, and social support from fellow vendors.

Pennsylvania has a long history with direct-to-consumer farm markets. As early as the 1700’s,local producers were vending their farm products directly to consumers. Descriptions of preparing raw products and value-added wares, loading the wagon, and spending the day at market can be found in many daily journals. In 2007, Pennsylvania was ranked number three nationally for dollar value of direct sales to consumers by the U.S. Census of Agriculture (USDA NASS, 2009). Farmers markets play a significant and growing role in these direct-to-consumer markets. In addition, the urban nature of Pennsylvania has been suggested as one reason for success of direct-to-consumer farm marketing. Pennsylvania is becoming increasingly urbanized, with only four of the 67 counties with no urban populations (Pennsylvania State Data Center, 2012). Nearly 80 percent of the State’s population lives in an urban area.

Farmers' market characteristics can be important in the success of a market. Brown and colleagues (2007) found that types of products produced, number of weeks attending market, and marketing activities on the part of the farmer influences market sales for farmers. Schmit and Gomez (2011) report that market leaders need to pay attention to location, product and vendor mix, prioritizing marketing and outreach, and reducing cost burdens to underserved, low-income residents to boost the viability of markets and the performance of vendors. A higher number of vendors at a market, as well as higher proportions of vendors selling organic products, was associated with higher levels of vendor satisfaction. Vendors at older markets, on the other hand, were less satisfied. Furthermore, Varner and Otto (2008) find that sales for vendors at Iowa markets are positively affected by an urban location and higher per capita income of consumers. Surprisingly, the time that market was held (Saturday markets versus all other days) was not significant for vendor sales. Stephenson and colleagues (2007) address the other side of market success, examining what factors are associated with failure, including small size (based on vendor numbers), need for more product mix, lack of administrative revenue, status of market manager (volunteer or low salary), and high manager turnover.

Nationally, the picture of farmers’ market operating characteristics is a bit dated, but the trends are likely still relevant. A survey of market managers from 2006 (USDA AMS, 2009) showed that most markets are seasonal markets that have been running for an average of 15 years. However, there is a great deal of regional diversity in the national picture. The report’s authors note that location appears to be a critical factor in market performance, with most market managers reporting high monthly
sales located in densely populated urban areas. The most successful farmers’ markets in terms of sales were located in the Far West and Mid-Atlantic regions, with these markets reporting average monthly sales of at least twice that
 of other regions. Thus, the Pennsylvania markets—which were included in the Mid-Atlantic region for the report—seem to be in an area where they have the great potential for success.

Within this context, assistance from Extension staff to both market managers and farmers’ market vendors can be an important component for the long-term success of farmers’ markets. While many of the educational needs on farmers’ market managers and vendors are similar to some other target audiences of Extension, especially those related to direct-to-consumers markets, exploring for unique attributes of farmers’ markets is appropriate given the extent of this marketing avenue in Pennsylvania.

Abel, Thomson, and Maretzki (1999) outlined many of the roles that Extension can take in terms of farmers’ market. Civittoto (2012) and Burrows (2008) offer some details on specific types of assistance. An Internet search also reveals that many Extension offices provide “how-to” information, networking opportunities, and other technical assistance to help the farmers’ markets in their area.

To that end, this paper provides results from one effort by Pennsylvania State Extension to assess the technical and information needs of markets in the Commonwealth using a survey of farmers’ market managers. As many authors thus far have sought to provide information about how best to establish farmers’ markets, we seek to delve a bit deeper with the analysis and examine how markets may differ in their training needs as they move from being start-up markets through different development phases.  

Methods

In early 2012, the authors undertook a survey of farmers’ markets in Pennsylvania that had various objectives, including examining the information and technical assistance needs on the part of the markets, reviewing recent food safety issues, as well as obtaining operational characteristics of the markets. The survey of market managers covered the 2011 season, and contained 25 questions. The list of markets was developed using an email listserv of market managers that had already been in use by Penn State Extension, and had been created over several years of direct educational programming for this audience. This list was validated with a lists of farmers’ markets that is available on-line at USDA Agricultural Marketing Service (AMS) website, on the Pennsylvania Department of Agriculture’s website, and through other various websites. Names of farmers’ markets found on the other lists were added to the survey list and were validated by personal communication if possible.

The survey was implemented primarily on-line using surveymonkey.com, and was most often sent to the market manager. Two organizations were running multiple markets, and staff from these organizations were asked to fill out the survey using an excel spreadsheet as this was the most efficient way for them to answer the survey. A raffle for one of four gift certificates worth $50 was included as an incentive. The survey was open for approximately three weeks during February and March of 2012. Of the 194 markets identified, 94 surveys were completed, for a response rate of 48 percent. The data was downloaded from surveymonkey.com and imported into SPSS for analysis for this paper.

Results

In terms of operational characteristics of the markets, most respondents reported that the markets had started less than 15 years before 2011 (although the median length was 4 years), with some markets having been in existence for over 200 years (Table 1). The median is similar to the national average, with 30 percent of markets nationally reporting 5 or fewer years open (USDA AMS, 2009). Although some markets ran year round, the average length for the market season was 27 weeks, with markets running an average of a little over one day per week when open. Respondents reported an estimated 567 customers per market day, and an average of 12 vendors per market day; both of these numbers are below the average found for markets in the Mid-Atlantic in the 2009 USDA report.

In the survey of Pennsylvania farmers’ markets, market managers were asked to characterize their market as either a start-up, growth, mature, or declining market. While most market managers characterized their markets as in either a growth or mature phase, a good number were also characterized as start-up markets. Only a few characterized their markets as in decline. These designations are used to examine the training and information needs of markets in different development stages with the assumption that start-up markets (given their newness) are in greater need than other markets for specific types of training.

Descriptive statistics by market type (Table 1) support many of the assumptions made by the authors concerning each development phase. As new markets, start-up markets have only been running for an average of one year, have the lowest numbers of customers per market day, and have lower numbers of vendors than growth or mature markets, but are on par with markets in decline. Market sales, however, are above markets characterized as in decline. Markets characterized as in growth or mature phases have many characteristics in common; they have been running for 15-18 years in average, and run around the same number of weeks per year. Mature markets report a much higher number of customers per market day than do growth markets, but average sales are not as different as what customer numbers might suggest, meaning that growth markets are experiencing higher sales per customer. Both types of markets also report the highest number of vendors. Those markets in decline have been running for many more years than other types of market, although the sample size for these markets is small. While they are also bringing in a fairly good number of customers, average sales per market day is lower, not surprisingly, than any other type of market.

 

	All markets		Start-up (N=17)	Growth (N=35)	Mature (N=34)	Decline(N=6)
Aspect	Mean	Std Dev	Mean
Years market run	15	44	1	15	18	41
Weeks per year run	27	11	21	27	30	25
Customers per market day	567	793	242	421	943	535
Percent of customers that use federal nutrition benefits	17	21	21	14	15	32
Sales per market day	$3,824	$6,734	$1,851	$4,360	$5,200	$1,137
Number of vendors	12	12	8	13	12	7

Table 1: Operational characteristics of respondent markets.

 

Because the development phase of the market may provide insights into the types of information and training needs required by the farmers’ markets and their vendors at different times in their development, we examined the differences in the needs by markets characterized as start-up, growth, and mature markets. Those markets that reported to be in decline were not included in this analysis because of their low numbers (n=6).  A continuous variable was developed to represent the number of training and information needs reported by a market. The mean number of needs reported by a market was 9 (out of a list of the 14 detailed in Table 2). A one-way between subjects ANOVA was conducted to compare the number of needs reported by the three groups, and there was a significant effect at the p<.05 level [F(2,84) = 8.45, p = <.001]. Post hoc tests revealed that mature markets differed from start-up and growth markets, reporting the least number of training and other needs.

To ascertain what the differences for training and other needs are by the three market types, a Pearson chi-square was conducted for each. All variables used are categorical, with the training and other needs variables being binary (yes = 1 if needed, 0 if not needed), as well as the three market types (start-up, growth, or mature). Table 2 provides the results of the chi-square analysis, as well as a review of the adjusted standardized residuals. Those outcomes where there are significant differences in what would be expected are in bold; in the case of negative adjusted residuals below 2, the count outcomes are below what would be expected, and with positive adjusted residuals above 2, the count outcomes are above what would be expected.

In terms of training and market development needs, assistance with advertising and publicity was reported by market managers as the greatest need over all those listed, although mature markets reported needing this assistance less than other types of markets. Improving the market’s operating budget, research on local consumer preferences, food safety training and enhanced business practices training were reported as needed by close to two-thirds of the market managers, although mature markets reported needing less help with research on local consumer preferences. While developing a market business plan was reported as needed by a little less than half, the adjusted residuals show a difference for mature markets, which reported less of a need for this type of training.

In regard to assistance with management and sales, increasing federal nutrition benefit customers was seen as highly needed by almost 80 percent of all markets. Variables representing a need for assistance with customer numbers, sales per customer, and sales per vendor were significant. Growth markets are in greater assistance and mature markets in lessor need of assistance in these areas. The result on customer spending is contrary to data on the operating characteristics of these markets, where mature markets have lower spending per customer than growth markets, but much higher customer numbers. Perhaps the higher customer numbers for mature markets are compensating for the lower spending levels for market managers. 

Although few noted the need to improve vendor relationships, the same dynamic is true here in that growth markets report a higher need than other markets, and mature markets report a lower need for assistance. Increasing volunteer and worker hours also received a fairly high number of markets needing help in this area, although no differences amongst the markets.

 

 

Needed Aspect	All Markets (N=94)	Start-up Markets (N=17)	Growth Markets (N=35)	Mature Markets (N=34)	X2 Results
	Percent
Training and Market Development Needs
Advertising/publicity of the market2	86	1001	91	79	5.21**
Improve operating budget	74	88	74	68	2.52
Research local consumer preferences	66	83	71	47	7.56*
Food safety training	64	59	60	71	1.08
Enhanced business practices training	62	71	66	56	1.27
Develop market business plan	48	65	57	29	7.78*
Improve market facility	39	47	49	26	4.03
Management and Sales Needs
Increase federal nutrition benefit customers	78	82	74	88	2.23
Increase sales per vendor	71	88	89	44	19.61*
Increase customer numbers	71	88	91	41	24.20*
Increase volunteers	70	71	77	74	0.28
Increase average customer spending	64	71	83	38	15.25*
Increase other worker hours	61	64	51	68	2.06
Improve relationships with vendors	20	18	34	03	11.20*

 

Table 2: Results: Training and Other Needs by Type of Farmers Market

Degrees of freedom = 2; N = 86.
An aspect was deemed needed if the market manager reported that they either somewhat needed or highly needed the aspect.
**,* indicates p values <.10 and <.05 respectively.
Bolded means indicate a significant deviation from the expected counts in that cell.
¹All respondents in this category responded that they needed advertising/publicity of the market.
²Fisher’s Exact test

Discussion

Of the training and other information needs listed in the survey, many markets reported wanting assistance in most areas. Those most highly desired areas of assistance were advertising and publicity of the market, improving the operating budget, increasing federal nutrition benefit sales, improving sales per vendor, and increasing customer numbers and volunteers. Extension can play a clear role in assistance in many of the needs reported. However, start-up and growth markets are in the most need of this assistance, and outreach to these markets should be emphasized. At the same time, a review of these markets show that start-up and growth markets have different operating characteristics (e.g., years market run, number of customers and sales per day) and growth markets have more in common with mature markets when it comes to most operating characteristics. As such, there is likely customized training and information that these different types of markets need.

In light of recent operational budget constraints for many Extension activities, prioritizing the needs of community markets seems a reasonable first step for educators, faculty, and researchers seeking to serve this unique audience. Farmers’ markets can be a method of show casing Extension activities, credibility, and relevance in today’s challenging and competitive funding environments. This study highlights many needs of farmers’ markets, yet leaves additional questions available for continued study. For instance, how much are consumers spending at local farmers’ markets and what are the economic impacts in their communities and areas from which the farmers come? What is the community development potential of these highly social events? How can public funding be best utilized to enhance the economic, social, and environmental benefits of community farmers’ markets? Markets are in need of different assistance from Extension as they move through development phases. Outreach programs that take these needs into account will be the most likely to effect long-term outcomes for the markets and their farmers. 

 

Literature Cited

Abel, J., Thomson, J., & Maretzki, A. (1994). Extension's role with farmers' markets: Working with farmers, consumers, and communities. Journal of Extension [On-line], 37(5) Article 5FEA4.

Brown, C., Miller, S., Boone, D., Boone Jr., H., Gartin, S., & McConnell, T. (2007). The importance of farmers’ markets for West Virginia direct marketers. Renewable Agriculture and Food Systems, 22(1), 20-29. DOI:10.1017/S1742170507001561

Burrows, M. E. (2008). Using local farmer's market to promote extension programming. Journal of Extension [On-line], 46(6) Article 6IAW1.

Civittolo, D. (2012). Extension's Role in Developing a Farmers' Market. Journal of Extension [On-line], 50(1) Article 1IAW3.

Pennsylvania State Data Center. (2012). Research brief: U.S. Census Bureau releases new 2010 Census Urban Area Definitions: Pennsylvania’s urban population increased 5.6 Percent Since 2000. Available at https://mail.google.com/mail/?shva=1#inbox

Schmit, T., & Gomez, M. (2011). Developing viable farmers markets in rural communities: An investigation of vendor performance using objective and subjective valuations. Food Policy, 36, 119-127. http://dx.doi.org/10.1016/j.foodpol.2010.10.001

Stephenson, G., Lev, L., & Brewer, L. (2007). ‘I’m getting desperate’: what we know about farmers’ markets that fail. Renewable Agriculture and Food Systems, 23(3), 188-199. DOI:10.1017/S1742170507002153

U.S. Department of Agriculture, Agricultural Marketing Service (USDA, AMS). (2012). Farmers market growth: 1994-2012. Retrieved from http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateS&leftNav=WholesaleandFarmersMarkets&page=WFMFarmersMarketGrowth&description=Farmers%20Market%20Growth&acct=frmrdirmkt

U.S. Department of Agriculture, Agricultural Marketing Service (USDA, AMS). 2009. National farmers market manager survey 2006. Washington, D.C.: U.S. Department of Agriculture, AMS.

U.S. Department of Agriculture, National Agricultural Statistics Service. (2009) Table 2: Market value of agricultural products including direct sales: 2007 and 2002. 2007 U.S. Census of Agriculture. Available online at http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_US_State_Level/

Varner T., & Otto, D. (2008). Factors affecting sales at farmers’ markets: An Iowa study. Review of Agricultural Economics, 30(1), 176–189. http://dx.doi.org/10.1111/j.1467-9353.2007.00398.x

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