Markets and Where To?
While reflecting on the definitions of farming and food, one can’t help but think of the challenges as well as the rewarding occupation that agriculture is. Today's commonplace commodity agriculture of raising grain crops in a saturated market has caused a decline in pricing, while farm profits are more than 20% down. This being the challenge, a famous saying comes to mind: "Necessity is the mother of invention."
Agriculture's roots run deep, paralleling the human race. I have not read a history book where people did not eat. Looking at the definition of agriculture, one finds it refers to the practice of cultivating plants, raising animals, and producing food, fiber, and other agricultural products for human or industrial use. It is the process of harnessing and modifying the environment to grow crops, rear livestock, and manage natural resources to meet the needs of human populations. Going a step further, food is defined as a substance consisting essentially of protein, carbohydrate, fat, and other nutrients used in the body of an organism to sustain growth and vital processes, and to furnish energy. The absorption and utilization of food by the body is fundamental to nutrition and is facilitated by digestion. Plants, which convert solar energy to food by photosynthesis, are the primary food source. Animals that feed on plants are a source of protein and amino acids for human nourishment. With that perspective in mind, the status of the operation's profitability is the measuring indicator.
While seeking profit, there are various ways to take our product to market. The characteristics of various markets vary, as seen to the right. Major factors to consider are sales volume and price, risk and lifestyle preferences, labor requirements, and channel-specific cost. A marketing channel assessment exercise can be very beneficial to show what and where it would work, while seeking to capture more margin/profit for the farm. When comparing economics, we can see that a well-run, direct-marketed CSA vegetable farm will not keep a crop around if it does not generate in excess of 10-15k per acre, with the high-end crops generating over 30k. This varies depending on location and management. Livestock operations directly marketed are easily over 5k per acre. It must be noted that these numbers are in gross revenue dollars per acre. Meanwhile, commodity corn in the current market would struggle to generate $900 per acre. Certainly, lots of operations in our network have been producing one item or another for many years and doing an excellent job at that.
As family dynasties or the agricultural industry look to entice the next generation back to the farm, increased revenue definitely helps this opportunistic phase. The locavore or regenerative food supply-searching shopper is looking intently for a farmer to trust and count on. Higher value crops or market diversification are an excellent means to facilitate this increased revenue and continue the farm legacy.
Taking the plunge into the unknown of direct markets does not come without risks, be they ap parent or real. The gains can be substantial, and some have proven to be quite successful in taking their products either directly to the consumer or adding a processing step to command more value in the sale. The biggest variable in efforts and cost when direct marketing is how much time and money you invest into advertising and gathering customers, whether through hard printed items, in person marketing, or online tools. II is worth taking some time to review data* and use it to assess your farm's market potential. We at Growers are always willing to discuss topics such as this. Feel free to call anytime, and we'll have the answer or gladly get it and get back to you. In the meantime, try a market evaluation and see what you think!
*The Guide to Marketing Channel Assessment: How to Sell Through Wholesale and Direct Marketing Channels is published by Cornell (University) Small Farms Program. The 38-page guide is available for free download at https://hdl.handle. net/1813/40260
This is an excerpt from the Late Fall Growers Solution (2024) written by James Schiltz, Growers Technical Agronomist.
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