Local markets are defined in more than one way which distracts from agreement on the value of local markets. In calculus, local maxima, are defined as a relative measure rather than an absolute boundary. No explicit boundary is defined. Local bioenergy markets benefit from a similar relative definition.

Teaching undergraduate economics requires explanations at a time of trade wars, pandemics, supply-chain stoppages, real wars, and high inflation. The cessation of expansion in global trade – since 2009 – infers that local markets are playing a larger role in economies of all sizes. Local means different things in different situations. These variations of local are based on different levels of demand and supply.

• Only Demand Considerations: Buy local. This can indicate a demand preference of the buyer. But it also refers to a marketing strategy targeting a firm’s sales based on preferences of regional and local consumers.
• Local Supply with Restricted Demand: Local industry protection. This is a restriction on demand that influences/elevates the benefit of local supply. Raising import tariffs and elevating barriers to trade provide a more competitive environment for (local) domestic industries.
• Local Supply AND Local Demand: Grain commodity market prices are bounded by cash markets and futures markets. The difference in the cash price less the futures price is the basis. Futures prices of U.S. grains are commonly higher than the local cash prices therefore basis has a negative value. A local ethanol plant or a livestock feeding facility increases the local demand for corn pushing the basis positive (cash > futures). When the (local) cash price is higher than the (global) futures price, local demand is more valuable than more distant markets.

All these definitions of local are used in markets today. At Biomass Rules, LLC, the last definition of local fits best because it includes both local supply and demand. It is consistent with the definition of local provided in calculus.

Mathematicians define a local maximum as a relative maximum, or in the neighborhood.  This makes economic sense for local markets. In this definition of local, ‘in the neighborhood’ is relative and undefined. Inserting different boundaries: city, county, state, or national; therefore changes the options.

In economics, the lowest opportunity cost producer is the one who has the comparative advantage. Producers do what they are best at, and trade for things for which they are not the best. When supply and demand are in equilibrium locally, local becomes a comparative advantage.

The calculus of local is that markets are balanced locally, in the neighborhood.