Wal-Mart sees the locavore light

The Associated Press reports that Wal-Mart plans to spend $400 million on locally grown produce this year, which the company defines as anything farmed within a state's boundaries. The company's Commitment to You web page states that the company "realize[s] the important role that American farmers play in today’s society — both in terms of ensuring our high-quality food supply and supporting the local and national economies." The local-food buying program, it continues, "reflects our ever-important goal to provide consumers with quality, affordable, home-grown agricultural selections."

But it would not be far-fetched to think that the retailing giant (the largest public corporation in the world and the largest U.S. food retailer) also has other, less lofty, motivations. Such as reducing fuel expenses: with diesel fuel prices going through the roof, buying tomatoes from a neighboring county instead of Florida or California can save money in fuel and labor.

Indeed, Wal-Mart's Checkout blog last week bragged that by optimizing the 12 million pounds of peaches it sources from 18 different states and distributing the product locally, "Wal-Mart saved 672,000 food miles and 112,000 gallons of diesel fuel…[equaling] more than $1.4 million."  Wal-Mart may also see a financial benefit in reducing its exposure to nationwide food-safety scares and their aftershocks — dark clouds could be hovering over fresh, out of season tomatoes for a long time — by providing more accurate information about the food's provenance.

If one can get past the irony of a leader in the globalization of the food chain, whose stores have paved over countless acres of U.S. farmland, claiming to be a booster of local producers, Wal-Mart's initiative has potential to improve local food systems by teaching shoppers about the joys of eating what's in season, providing a new market for regional farms, and helping customers gain a better understanding of the origins of their food.

The devil is in the details. For example, Wal-Mart has a history of squeezing suppliers for lower and lower prices. A 2005 article in the New York Times recounted how Wal-Mart asked for a 20 percent price cut from the Organic Valley dairy cooperative after it had been the primary organic milk supplier for three years. Organic Valley CEO George Simeon said, "Wal-Mart allows you to really build market share. But we're about our values and being able to sustain our farmers. If a customer wants to stretch us to the point where we're not able to deliver our mission, then we have to find different markets." 

In the AP article, local-food expert Rich Pirog, associate director of the Leopold Center for Sustainable Agriculture at Iowa State University, expresses concern that Wal-Mart will buy only from the largest growers, thus preventing the smallest farms from getting any of the business. Over time this could lead to regional consolidation and possibly the replacement of small, diverse farms with large monocrops grown for Wal-Mart. These same concerns were raised back in 2006 when Wal-Mart announced plans to jump into the organic food market. (See Michael Pollan's blog posts for the Times — 1 and 2 — and the paper's editorial.)

If Wal-Mart's initiative is successful, I wonder how it will affect its state and federal lobbying strategies. Will it put some of its lobbying muscle into farmland preservation? Or into removing the prohibition on vegetable and fruit planting on USDA program lands? Or will it seek to impose ever more draconian food safety regulations on its suppliers?

(Via Paul Krugman)

7 Responsesto “Wal-Mart sees the locavore light”

  1. Amanda says:

    Walmart's "local" farms are those near their distribution centers, so don't think you're supporting the family farm down the street when you buy from Walmart. If you want the freshest, best quality food, you need to go to the source.

  2. The 20% margin squeeze is an example of one reason why you'll never find our Sugar Mountain Farm pastured pork at Walmart or other big stores. I won't allow any one customer to dominate our sales.
     
    Decades ago I had an experience with that sort of thing, fortunately we survived it. Since then I have never let any one buyer have more than 10% of our output. By having many customers we cushion ourselves against this sort of tactic as well as the simple inevitability changes in any one market.

  3. farmboy says:

    How much of the $400 million that Walmart has budgeted this year for local food (meaning sold in the same state as which it was grown) will be spent on agribusiness product bought and sold in California and Florida?  Walmart's basic business model - Always Low Prices - is antithetical to local food systems which are predicated upon the true cost of food.

  4. One thing Wal-Mart hasn’t taken into is how independent minded, cantankerous, stubborn and political many small farmers are.
    What’s more, just because I have an agricultural product to sell or  market doesn’t mean that I’ll do my trading with just anybody.

    I’m particular about who I do business with and I’d rather not compromise my ethics by doing business with Wal-Mart.
     

  5. Brag says:

    "Indeed, Wal-Mart’s Checkout blog last week bragged that by optimizing the 12 million pounds of peaches it sources from 18 different states and distributing the product locally, “Wal-Mart saved 672,000 food miles and 112,000 gallons of diesel fuel…[equaling] more than $1.4 million.” Come on, guys! Who mind companies "bragging" about such things as lowering gas consumption or food-mileage? And, if Wall-Mart themselves start promoting local food as economically efficient...all the best! Other companies might want to start looking into it just then!

  6. D. says:

    Will nothing satisfy you poseur idiots? Will you be happy only when each and every American is decked out in grubby overalls, using an outhouse and eating turnips all winter? You wouldn't recognize progress if it slapped you in the face -- which I THINK it just did!

  7. Bonnie P. says:

    Everyone: Do NOT feed this troll. Nothing will ever substitute for the hugs - or homecooked meals - he did not get as a child.

    ~Bonnie (Ethicurean editor and comment approver)