Market Research for Value-added Products

Demand for Local Food

Researchers from the University of Kentucky Department of Agricultural Economics have also cooperated with agricultural economists at The Ohio State University to measure market demand and willingness to pay for locally produced products in Kentucky and Ohio. This fact sheet will also report some of the conclusions of that research for producers adding value to crops by marketing them as “Kentucky Proud” or “local.”

What is local?

Producers diversifying crop production are often attracted to producing for “local” markets. Initial research shows that “local,” and perhaps the willingness of consumers to pay premiums for local, may actually exist for fresh products grown much less than 100 miles from where the products are consumed. This research could help producers accurately label their products. A “local” label for fresh food that is grown 25, and perhaps 50, miles from the point of consumption may result in value added to the crop. Similarly, producers transporting their crops a greater distance may find that consumers value their crop for higher quality and relative freshness—even if that crop does not fall into a consumer’s definition of “local.”