On May 7, Kroger on Foothills Plaza Drive charged anywhere from $7 to $12 per pound for ground beef — averaging $9.50 per pound.
Jessica Waters at local farm C&C Beef charges $9 if you pay cash. And she can probably show you a picture of the cow.
Rising grocery prices have not necessarily made local food cheaper than chain-store alternatives, but they may be shrinking the psychological gap enough that more Blount County consumers are reconsidering what they value in a food purchase.
After all — if you buy the high-quality $12 beef from Kroger, buying from Waters could save you money, as long as you believe they’re the same quality.
Jodie Moore of Rebel Hollow Farms does the math in her head.
“If you do quarter pound burgers, and you pay $2 more for a pound of my ground beef, that’s 50 cents more per burger,” she said.
In her eyes, plenty of people can swing that difference.
But are they?
Grocery prices have outstripped farm products
According to the Bureau of Labor Statistics, the Producer Price Index for supermarkets and grocery stores has risen just over 44% since January 2020.
That means prices charged by grocery retailers have increased substantially over the last six years.
On the consumer end, the CPI for food at home has risen just over 30% in the same period.
There’s no one data point to blame for the recent rise in grocery prices — not that the concept is even new. That food-at-home number is nearly double what it was at the turn of the century. And the grocery number? Nearly three times its Y2K size.
But it does mean Americans nationwide are paying more than ever for many grocery staples.
And even more importantly, the PPI for raw farm products has not risen as sharply as grocery store prices. It’s up 41% since January 2020, but only 2.5 times its January 2000 rate. That means the cost of raw farm products like cattle, milk, eggs and wheat has increased in the last 26 years — but at a lower rate than their grocery store counterparts further down the supply chain.
Pricing structure differs
Andrew Griffith, professor of agricultural and resource economics at the University of Tennessee in Knoxville, raises cattle of his own and cautioned against simplistic comparisons between grocery prices and farm charges.
Consumers who buy local beef, for example, often buy half or a quarter of a cow, receiving their portion of the meat off the animal. The end price from that approach, Griffith said, isn’t as clear as what one might see in the grocery store. The price for all the meat, he said, might end up averaging $10 per pound across ground beef, filets and roasts.
In a store, customers don’t pay by the animal.
“If you go to the grocery store, you don’t see $10 per pound,” he said. “You see $8 for ground beef, a filet that’s $24 per pound and so forth. People can’t always relate to what the true value is.”
Consumers might not stop to do the math, he said, which presents a barrier to local farmers trying to sell their goods.
The product, Griffith said, is handled differently, too, especially when it comes to beef. Carcasses are generally hung in coolers before being cut up for sale. That hanging period helps tenderize the meat.
At a local processing plant, Griffith said carcasses can hang for up to two weeks. In a commercial plant, he said they usually stay for two to three days. Griffith said he personally struggles to taste the difference, but he acknowledges that plenty of consumers are willing to pay extra for it, giving local meat a potential leg up in perceived value against its grocery store competitors.
Value is subjective
Consumers define value differently depending on the retail environment, said Maryville College professor Kavita Singh. She works in the Division of Social Sciences, teaching courses on marketing, consumer behavior and retail management.
She’s unsure whether closing the price gap between local goods and grocery stores will drive customers to swap. The keyword in perceived value, she said, is “perceived.”
“They are buying different categories of goods from both of these places,” she said. “The value they derive from buying directly from a farmer is not so much about the price as about, say, the vibe of the farmers’ market or knowing that they’re contributing to the community.”
Shopping at a grocery store offers different benefits: convenience, reliability and now more often, delivery. For people who value those benefits, the often-cited values of shopping local — quality goods and community support — won’t outweigh the pros of a grocery store, Singh believes.
Customers who want to shop local, she said, likely already are. That means future growth may depend more on awareness than persuasion.
She recommended farmers pitch their advertising toward the demographic who already wants to shop locally but might not know where to find particular goods. A targeted online approach, she said, might help open access to potential customers.
Local farmers report regional interest
But Moore and Waters both agree — business is intensifying.
A single cow, once dressed, usually yields 400 to 500 pounds of meat. Moore said demand is such that she must dress at least a cow a week.
Waters attributes the increase in demand she is seeing to transplants moving to the area who are already used to buying local. But at Holler Farm in Walland, Madisen Saunders and Joey Spiers think locals could be discovering better quality locally produced foods.
Spiers used the example of his heirloom tomatoes. Popular varieties of tomato one might find in a grocery store are cultivated for size, speed and convenience — but not necessarily for flavor.
“People are realizing that the food you get from the grocery stores is made to look good. It’s not made to taste good,” he said. “You’re paying more for a lot less.”
He and Saunders have been farming on a small scale for years, but they’re beginning to ramp up production amid demand for fruits and vegetables.
Their main customer base isn’t individuals, but restaurants. The regional restaurant market, Saunders said, values the flavor and quality of locally grown produce — but operators also like the accessibility and low price of raw produce.
With prices in the stores on the rise, other restaurants may search for ways to cut costs and turn to local producers.
“We just want people to be able to afford groceries and eat well, so our goal is always going to be to come in underneath what the grocery store costs wherever possible,” Saunders said.
Farmers are financially vulnerable
It’s not always that easy, though. Some of the same economic impacts that could lead consumers to consider a local farm might force those prices out of reach once more.
Even as business is increasing, Moore said she’s “doing everything I can” not to raise her prices.
Key financial pressures include fuel, processing fees, fencing and irrigation, and that’s just a start, Griffith said. Farmers increasingly depend on nonlocal inputs, and even a tractor or rake purchased at a local farm store likely wasn’t made locally. That sends a portion of a farmer’s dollars elsewhere with every purchase and leaves their business increasingly vulnerable to global economic trends.
Even well-digging is more expensive these days.
“Back in my dad’s time, it was about $5 per foot to dig a well,” Saunders said. “Now, you’re looking at $35-plus per foot to dig a well. And our well came in at over 500 feet.”
And in May, ongoing economic pressures from conflict in the Middle East drove Tennessee gas prices over $4 at the pump. Griffith said those oil prices affect farmers more directly than just through transportation — synthetic fertilizer is energy-intensive to produce, which
means disruptions in one part of the global energy market have a domino effect on farm products.
Local farmers are faced with a choice — raise prices to cope and risk losing customers, or keep them low and take the hit as long as they can.
Many of them might not have the profit margins to handle either option. In 2022, the U.S. Department of Agriculture estimated there were just under 1,000 farms in Blount County in a livestock-dominated market. Of those farms, only 29% made over $10,000 in sales.
Compared to the grocery store prices, the cost of raw farm products is more volatile for a reason. Grocery stores, although also operating on thin profit margins, are larger businesses and can smooth out a loss on eggs with their higher volume of sales on other products across the store.
With farm products, Griffith said, “prices go up really quick and down really quick. Whereas a retailer or a food service operator has a smoother curve because they just slowly increase those prices and hold them higher longer. Then they slowly come down.”
That smooth curve helps avoid scaring customers away — something more vulnerable farmers can’t always afford to do.
Farmers may have a niche foothold
Blount County’s local agricultural economy remains overwhelmingly small. According to the 2022 Census of Agriculture, only 10% of farms in the county sold directly to consumers.
That means the visible local-food economy — farmers markets, freezer beef sales and restaurant partnerships — represents only a narrow slice of the county’s agricultural system.
And even the farms finding success face structural limitations. USDA-inspected processors remain limited, Waters said, and the price for processing keeps going up. Delivery systems require labor many farms don’t have.
And the popularity of grocery stores demonstrates consumers still overwhelmingly prefer one-stop shopping convenience.
Still, there are those who want to support the local market.
“There’s a lot of consumers that are willing to pay a little more for a local product,” Griffith said. “Because they view that product as a safer product, a healthier product. I’m not saying it is or isn’t, but that’s how the market views it.”
That willingness may be growing. But whether it can support a broader transformation of the local food economy is less certain. Waters, Moore, Spiers and Saunders all described local food less as a high-growth industry and more as a relationship business built on trust, repeat customers and community identity.
For now, grocery chains still dominate on scale, convenience and infrastructure.
But as food prices continue to rise, local producers appear to be carving out a niche foothold — not necessarily by becoming cheaper than the grocery store, but by convincing some consumers they are worth the difference.
