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Evaluate Your Organic Grain Marketing Opportunities
By Darcy Maulsby
First, lets get one thing straightmarketing and
selling are two different things.
Thats one of the most important distinctions to make when
you raise organic crops, says Prescott Bergh, a Wisconsin-based
organic sales and marketing specialist.
Calling up the local elevator is not marketing. If
all you want is for the sale to happen without doing the marketing
work, youll get what farmers have always gottenbottom
prices, Bergh noted during his Organic Grain Marketing
Options presentation at the Upper Midwest Organic Farming
Conference in late March. Many of 70 producers who attended
his session raise 100 to 500 acres of organic grain, including
wheat, corn and soybeans.
When Bergh conducted an informal poll at the start of his
talk, participants said they wanted to learn more about marketing
winter wheat, identifying reliable buyers, contracting organic
corn and soybeans, and finding out which small grains are
in highest demand.
Discovering what customers want
Bergh urged producers to start by looking internally. Farmers
should identify their on-farm resources that can help them
to supply what the market wants.
Marketing is the work you do to determine who your
buyers are, what they want, and how your product will be used.
This will give you enough information to sell your product
successfully, said Bergh. He serves as the North American
sales and marketing director of CIRANDA (http://www.ciranda.com/),
a global organic food ingredient company based in Hudson,
Bergh reminded producers that marketing is a strategic process
involving a repeated sequence of five steps:
-- Planning. Decide what you are going to do. Write it down.
-- Pricing. Determine the existing price, then decide where
will you establish your prices.
-- Promoting. Discern how to let potential buyers know you
exist and what you have to offer?
-- Distributing. Decide how you will deliver your product
-- Executing. Take action to reach your goals.
Think of grain marketing as a circle. You come up with
an idea, and you research that idea to find out whats
going on in the market. Then you plan, take action, evaluate
and refine, said Bergh, who also produces and markets
pasture-raised beef and pork to consumers and restaurants
in Minnesotas Twin Cities area.
Research your market
Take the time to understand your product and view it from
the buyers standpoint, he added. What are the
products your grains are going into? If you raise natto soybeans,
have you tasted them? I would go into a Japanese market, buy
some products and see what they are like.
As part of your background research, also investigate:
-- Where will your product be used? What nations buy the product,
what industries need the product, and where are the main manufacturers
-- Who or what will be the competition? Where are they located?
Does this include other growers, other regions, other nations,
or other products that can be substituted?
-- How is the product usually traded? Is it a specialty product
or a global commodity? On what kind of scale is the grain
traded? Is it shipped in train cars or in containers? Find
out about cleaning, conditioning, milling, distribution, and
other necessary logistical details.
Check the USDAs Web site (www.usda.gov) to see
what buyers of a particular crop want, Bergh said. To
learn more, use Internet searches, state departments of agriculture,
your personal contacts, local manufacturers, trade associations
and trade shows. Also, follow online publications like The
Economist (www.economist.com) to keep up with current trends.
Commodity groups and university food science departments
can be sources of valuable information, Bergh noted.
Iowa State University has one of the best on-site tofu
manufacturing facilities and soy processing labs around. If
you want to sell to White Wave, talk to Iowa State first and
learn as much as you can about the end product. Also, think
beyond groups like the Minnesota Corn Growers. Think about
the Minnesota Milling Association and the Minnesota Bakers
Association. [These people are] your market, and you need
to understand their needs.
Remember that pricing in the organic grain market is very
specific to the crop variety you raise. Choosing varieties
with distinct traits is one way to create leverage.
Build your marketing network
During your research, intentionally build your marketing
network with all your food industry contacts. Make sure buyers
know that you are focused on food quality and that you can
meet their needs. Its a broader network than most
farmers have had in the past, Bergh said.
Sort out your research findings to develop your marketing
profile based on your interests, abilities and resources.
What sections of the supply chain do you want to take on yourself?
What skills and resources, like land and capital, do you have
access to? How do you want to add value? Will you do it through
processing, marketing, or storing? Are you going to compete
on the basis of price and volume, or quality and service?
Identify which groups in your target market are best
suited to your situation, Bergh said. Then prioritize
your prospects. Who is your ideal target customer?
Pay attention to the laws that regulate your part of the
industry, and ask some basic questions about companies you
want sell to, Bergh said. The more you know about potential
customers, the better. Check their reputation, trade associations
and company history.
Approach your top potential customers with a variety of cold-selling
techniques, such as phone calls, letters, e-mails, trade shows
and specification sheets, Bergh added. Before you offer to
sell grain, however, lock in on what you can promise to deliver.
(See sidebar: Grain Grower, know thy stuff.)
Plan for success
Finally, think creatively about unusual ways to market grain.
If you raise corn, buy a fryer and sell fresh corn
chips at local county fairs, Bergh said. If you
raise wheat, install a small mill in local grocery stores,
or put one in the back of your pickup, and sell bags of freshly-ground
grain at area farmers markets or stores.
While it takes time to understand the differences between
marketing and selling and develop an action plan, the results
are worth the effort, Bergh concluded.
You make your moneyand your ultimate success
in life through planning. Doing this work is labor intensive
and seems like downtime, but it pays off, he said. Take
these general principles and find creative options for your