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Economics & a Sustainable Regional Food System

Economics & a Sustainable Regional Food System. Jim Bower Blue Planet Partners Planting Seeds for our Future Conference March 26, 2007. Scoping Partners for Regional Food Strategy Project. Blue Planet Partners Michael Fields Agricultural Institute Center for Integrated Agricultural Systems

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Economics & a Sustainable Regional Food System

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  1. Economics & a Sustainable Regional Food System Jim Bower Blue Planet Partners Planting Seeds for our Future Conference March 26, 2007

  2. Scoping Partners for Regional Food Strategy Project Blue Planet Partner Blue Planet Partners Michael Fields Agricultural Institute Center for Integrated Agricultural Systems DATCP REAP UW – Center for Cooperatives Common Wealth Development, Inc. UW College of Agriculture Other key food systems leaders

  3. Goal of Regional Food Strategy Project Blue Planet Partner Develop cohesive strategic framework for scaling up this region’s sustainable food system (Madison – Milwaukee – Chicago) Strategies nesting both locally and regionally. Goal: “Increase consumption of sustainable, regionally produced and processed food from 2% to 10% in 7 to 10 years.”

  4. Anatomy of a Scaling Up a Sustainable Food System Blue Planet Partner • Values (Heart) • Local, organic, sustainable, environmentally sound, life giving for communities, healthfulness, freshness, taste, etc. • Economics (Blood in the bloodstream) • Financial viability Which is more important? Which is more capable of flexibility?

  5. Regional Food Economies Blue Planet Partner • Not working • Outflow is greater than inflow • Northwest MN study (Ken Meter) • $851m revenue • $1092m cost • Losing $200m per year in production costs

  6. Supply Chain Economics Blue Planet Partner Production Processing Distribution

  7. Economics of Distribution Blue Planet Partner • Tier 1 – direct from farm to consumer • Tier 2 – local / regional distribution – small scale • Tier 3 – regional distribution • Forklifts • Semi-trailer scale minimums • Regional warehouses • Just in time delivery

  8. Punch line Blue Planet Partner We as a society/region have not figured it out yet If the economics worked then supply would increase in a proportion to demand at price points that worked

  9. Changing Economic Ground Blue Planet Partner Fuel prices Changing consumer demand Major market makers redefining landscape (Wal-Mart) Current market makers rapidly adjusting (Whole Foods) New institutional buyers beginning to enter the market Public policy – national, state & local Environmental costs internalized Food security TIPPING POINTS???

  10. What’s Next Blue Planet Partner Building 100s of viable businesses at all levels of the region’s food system Driving innovation – new products, new/improved processes Increasing consumers ready and able to consume a value-laden product at higher price points Getting more efficient/effective at all levels of the supply chain Encouraging the development of market makers Building partnerships that can create new market opportunities TIPPING POINTS???

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