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Evaluate Your Organic Grain Marketing Opportunities
By Darcy Maulsby

First, let’s get one thing straight—marketing and selling are two different things.
That’s 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, you’ll get what farmers have always gotten—bottom 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, Wis.

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 to customers.
-- 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 what’s 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 Minnesota’s Twin Cities area.

Research your market

Take the time to understand your product and view it from the buyer’s 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 located?
-- 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 USDA’s 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. “It’s 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 money—and 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 farm.”