Food produced locally is fresher and higher in nutrients.  Produce loses vitamin potency when picked days or weeks before you eat it.  Many items are picked unripe for shipping and are not allowed to develop to their full potential.  Some produce is ripened or preserved artificially with gases, chemicals or the process of irradiation.  Local produce has been picked within 24-48 hours so your fruits and vegetables are fresh, ripe, nutrient dense and do not require preserves other than refrigeration or ice.
Local food requires less shipping and packaging to get it from the field to your dinner table, limiting the "food miles."  Shipping and packaging both depend on petrochemicals to produce the fuel, plastic wrap and energy used along the way.  Large scale agriculture depends on petroleum based fertilizers which not only pollute our food but the surrounding land and waterways near the fields.  The "dead zone" in the Gulf of Mexico is suspected to be caused by fertilizer run off into the Mississippi River that drains into the gulf.  Local food is also much less likely to be grown as monoculture, meaning our farms grow a wide variety of items, keeping genetic diversity and protecting ourselves from the consequences of catastrophic crop failure.  Farm land preservation also protects our remaining open spaces from development, leaving them free for wildlife or the possibility of farming in the future.
Money spent on local products or at local farm stands keeps the dollars in our community more efficiently than buying products from a national chain store.  It also improves our collective food security, keeping agriculture as a viable way to make a living and ensuring that we have farms around us in the future when we may depend on them in an emergency.
 
Many people assume that local food is more expensive than comparable items purchased at the supermarket.  If you are only looking at dollars and cents, sometimes they will be cheaper at the grocery store, but this is not always the case.  A study done at Seattle University in 2007 found that farmers market prices were slightly lower than supermarket prices, when items were compared pound for pound.

What we may see as high prices on some local goods are a lot closer to the true cost of producing that particular food, as opposed to the industrial food system which depends greatly on externalizing costs.  This means that the cost of an item is artificially low by taking advantage of someone somewhere else.  This is achieved by monoculture, massive plantings of one item, "packing them deep and selling them cheap" in the same way that big box stores have made material goods very affordable.  Cheap, illegal immigrant labor is another way companies can save on costs, and the current state of industrial agriculture does not really discourage the practice.

Let's not forget about subsidies (our tax dollars) on crops that make processed foods much more affordable calorie for calorie, when compared to fresh, local produce.  Subsidies make the raw materials (peanuts, rice, corn, soybean, wheat) dirt cheap for processed food companies.  This is why a you get more chips than carrots for the same dollar.

We also have to consider the toll industrial agriculture has on our environment.  While a broccoli crown may be a few cents cheaper at the store, you can buy the local equivalent and know that you have done your part to lessen your impact on the planet.

It is all a matter of your priorities.  10 years ago we didn't have the spare time we now have to spend checking email and searching the internet.  10 years ago we may have balked at spending $4.00 on a cup of coffee.  Buying local food is better for you, the environment, and the local economy.  Our lives depend on the health of these elements and if you believe in that you will support them every chance you get.

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