Stephen Dubner of Freakonomics fame looks at the issue: "I very much understand the locavore instinct. To eat locally grown food or, even better, food that you’ve grown yourself, seems as if it should be 1) more delicious; 2) more nutritious; 3) cheaper; and 4) better for the environment. But is it?"
He concludes otherwise, quoting a study on Food-Miles and the Relative Climate Impacts of Food Choices
"Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Different food groups exhibit a large range in GHG-intensity; on average, red meat is around 150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary shift can be a more effective means of lowering an average household’s food-related climate footprint than 'buying local.' Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food."
However fuel consumption is only one of the reasons that the the local food movement has taken off, and probably not the most important. Dubner compares industrial food to food grown in your garden, rather than to the food bought from local farmers through farmers markets or retailers. The "ruthlessly efficient" industrial food system delivers a lousy product--albeit efficiently.
The study quoted also notes that "the production phase contributes 83% of food's carbon footprint. I suspect that is a whole lot lower in local food then it is on a massive farm in California. For his argument to be plausible, one would have to look at the full range of energy consumption, not just getting it from the farm to the store. ::Freakonomics via ::PSFK.