Getting farm products from the farm to the consumer is a never ending challenge for farmers, especially if it's a perishable product that will spoil or degrade quickly. Getting fresh, quality products to the market in a timely manner is the goal of logistics and shipping.
veggies piled high
Aiming to sell to people that are physically closer to your farm will definitely help in getting a quality product to them. But, will those people pay enough to support your farm business?
Disposable Income
If you're a smaller producer selling a premium product then looking at the general income level of your target market is helpful. The local town of 10k people might be really easy to get to from your farm, but do enough residents have the financial means to purchase your premium product? The town of 70k+ that's another 45 minutes away might be a better bet in having enough people that have disposable income to purchase the great product you're selling.
So what do I mean by disposable income? Generally it means the amount of money in someone's paycheck that's over and above necessary expenses like rent/mortgage, food, vehicle/transportation, utilities, etc. It's the amount of money someone feels more free to spend on quality or luxury things. When incomes are low there's less disposable income that people are able to spend. It will be easier to sell your quality products from your farm to people who have more income to "play" with.
A well attended farmers' market. Image via Wikipedia.
Perceived Value
Another question to ask of a potential market is: Do the people find enough value in your product to purchase it? A way to find this out is to look at the number of farmers' markets (and their attendance) as well as the number of trendier restaurants that feature local grown products. These two things are a great indicator that there are enough people in the area that like the "farm to table" vibe and will support producers that bring in great products.
Other large towns or cities that don't have much in the way of restaurants that feature local, farm raised products might turn out to be a tough sell for your product. Or, at the very least, being able to get a good price for the quality products your selling. This would say to me that the local market really doesn't value great, fresh farm products.
Granted, I am far from being an expert in sales and marketing. These are just some things I've observed over the years about buying and selling and the mentality and emotions behind it. Figuring out how to assess potential markets for your farm products is an every evolving process, too. People move, consumer sentiment changes, popular items come and go. It's a moving target, but a slowly moving one, thank goodness.