Competition for supplying local foods

This is from a new paper in the American Journal of Agricultural Economics looking at Community Supported Agriculture (CSA)"

For farms considering entry into a CSA market and policymakers exploring policy scenarios to encourage local foods growth, this may serve as a cautionary note about the ability of the existing demand for local foods to sustain a substantial number of new entrants.

A related footnote:

We should note that several CSAs were excluded from our hedonic sample as a result of having ceased operations, suggesting that profitability could be a concern.

The authors also find the interesting result that organic CSAs do receive a price premium over non-organic CSAs, answering the question which serves as the title of their paper, "Does Organic Command a Premium When the Food is Already Local?"  However, they only estimate about a 7% premium, which is much lower than that found in many other studies. I would interpret this to mean that local and organic are demand substitutes, but not perfect substitutes.