By Blake Jackson
A new tool created by Cornell researchers is helping New York state agencies make better-informed food purchasing decisions. This economic model estimates the additional tax revenue and business activity that results from buying locally produced food.
Public institutions like schools, hospitals, and prisons spend nearly $1.3 billion annually on food. While these purchases often focus on the lowest-cost bidder, the Cornell tool offers a broader view, accounting for the economic ripple effects of supporting local suppliers.
Todd Schmit, professor at Cornell’s Charles H. Dyson School of Applied Economics and Management, developed the tool with graduate student Xiaoyan Liu. “A lot of public procurement is based on the lowest-cost bidder. But that ignores positive multiplier effects we should consider,” Schmit said.
For example, buying a hot dog from a company using New York-sourced meat may generate more value for the state than a cheaper local option using less in-state ingredients. The model calculates a "net bid" that includes economic impact, not just price.
This model could benefit state programs like Governor Kathy Hochul’s Executive Order 32, which requires agencies to increase local food purchases to 30% by 2027. It could also improve accuracy in school reimbursements through the 30% NY Initiative.
Some agencies already use a geographic preference to favor local bidders. However, this net-cost model adds precision and supports more data-driven decision-making.
Schmit noted, “I’m really excited about conversations we are currently having with some school districts that are looking at implementing the net-cost tool.”
This approach could help balance fiscal responsibility with long-term benefits, supporting local economies and keeping taxpayer dollars in-state.
Photo Credit: cornell-university
Categories: New York, Government & Policy