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Marketing Strategies and Profit Potential
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On the 300-acre Bryant Ranch
in south central Idaho, manager Fred Brossy’s profits
are firmly grounded in his marketing strategy. Almost every
one of his organic crops – potatoes, dry beans, wheat,
hay and seed crops – “has a home – and a price
– before we even plant it.”
– Photo courtesy of the Brossys |
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Marketing is probably the most important consideration when contemplating
new crops. While conventional grain producers tend to use the relatively
straightforward route of taking the harvested crop to the local
grain elevator, diversified growers should not expect convenient
delivery with new or alternative crops.
Instead, you should consider:
 Researching
the market before planting.
Developing
a marketing plan with information on prices, delivery points and
sales contracts. (For help, consider Building
a Sustainable Business.)
Creating
long-distance sales channels, such as the Internet.
Establishing
relationships with buyers.
Asking
retailers or wholesalers who handle similar food, feed or fiber
products if they are willing to test a small quantity of a new
product in the marketplace. Many growers also sell successfully
to consumers; this approach may involve more cleaning, processing
and packaging but often brings a higher profit.
Receiving
endorsement by a third-party verifier that advertises sustainable
production systems. The Food Alliance of Portland, Ore., helped
Kupers gain access to markets. “Today’s consumer desires
more knowledge of how his or her food was produced,” he
said. “My strategy is to market my production system.”
Kupers spends most of his time identifying trends and tracking down the opportunities
they present. He describes his marketing strategy as “listening, reading,
going to the marketplaces, understanding what today’s consumer is looking
for and then trying to develop a product the consumer will desire.” Visits
to national pet store chains and discount supermarts convinced him that backyard
wildlife feeding was taking off. Kupers now sells his safflower and sunflower
seed to a national bird feed manufacturer-distributor in nearby Spokane, rather
than paying the freight to ship it 300 miles to a processor.
In South Dakota, Rick Heintzman direct markets his golden flaxseed under the
trademarked “Dakota Flax Gold” label. The healthful properties of
flaxseed oil – it is high in omega-3 fatty acid, which is believed to
help lower heart attack risks – and demand for linen clothing have renewed
interest in flax. Heintzman manufactures, stores and distributes the product
himself. By selling 1- to 50-pound packages directly to consumers, clinics,
hospitals and health food stores, Heintzman boosts his crop’s value to
$168 per bushel. That’s almost 50 times what his flax would bring at the
local grain elevator.
In general, carefully written contracts are advantageous for sellers of alternative
crops, said Myers. “First and foremost, farmers know they have a market.
They also have a price up front, so they can better determine if they can make
a profit.”
Buckwheat, crambe and sesame typically are grown under contract while canola,
sunflowers and nuts normally are not. Contracts are sometimes available for
safflower, amaranth, millets and alternative legumes.
Some marketing contracts require delivery of a certain amount of
product. If growers fail to produce that much, they may have to
purchase the difference, at high cost, from another source to fulfill
the contract. For more information, consult Agricultural Production
Contracts from the University of Minnesota. (See “Resources”)
In Regent, N.D., Vern Mayer sells all of his buckwheat, most of his flax and
half of his sunflowers under contract. His buckwheat prices go up and down with
the price of wheat and his sunflower prices follow soybeans, but his flax prices
ripple mildly and more independently.
Compared to conventional growers, Mayer said he is “as profitable –
not more – from a strictly cash standpoint. But what encourages me is
that I know that what I’m doing is building my soil and reversing the
decline in organic matter. There’s a certain sense of pride and a certain
sense of stewardship that goes along with knowing that every year your land
is becoming more productive than it was before.”
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