From the Perspective of the food system, the overall food manufacturing or processing industry is fundamentally connected both with agricultural production in rural areas and consumption demand usually concentrated in urban areas. Using the local government level data for the food manufacturing industry in Korea, this paper investigated the agglomeration and spillover effects in this industry. Unlike the conventional approach based on average labor productivity function in agglomeration literature, the production frontier approach was employed. This study found that there exist significant productivity differentials over space in food processing industry. This paper also found the evidences of agglomeration economies; the place where the size of local industry employment and population is large performs better. The results showed some evidences of spillover effects; negative externalities from congestions of neighbors and positive spillovers of the increasing accessibility to material input producers in the neighboring regions.