Sales Performance of Local Food Marketers: Evaluation of Multivalued Treatment Effects

We explore the impact of direct marketing on farm sales applying a treatment effect generated by a multinomial selection process. Producers engaged in direct marketing using diversified outlets experience significant sales gains, as do producers who market primarily to consumers. The direct marketing effect is apparent even after controlling for operator demographics, farming and marketing experience, farm operation characteristics, and geographic effects. Using data from the Local Food Marketing Practices Survey (LFMPS), direct sales are higher by 31% for marketing in diversified channels and 148% for the marketing primarily to retailers, an effect that is relative to those marketing to consumers.