ORIGINALLY WRITTEN BRADLEY GOERING
During the past several weeks, I have had the opportunity to go out and meet with farmers as well meet with them in the office. Discussion leads to frustrations about the market place, what the new farm bill will look like, will we see the end of the five year slump, and is there a way out?
That is a semi-load of quality questions.
These type of comments or questions get me thinking about the catch phrase “value added” production. We in agriculture have the mindset of producing and marketing in large quantities.
“Can we still operate under this same concept and catch a premium in the value-added market?” asked one producer.
If we could, it would be for one year or maybe two years. Everyone would catch on and farmers would be back to square one.
There have been attempts to do this with food processing, the white wheat, ethanol, soy-diesel and soy-ink, various meat-product programs, and so on. Some work, some don’t.
Farmers need security to know that there is a good market and there will be a good market for particular commodities for several years.
Sometimes we are our own worst enemies. We may see our neighbors market a particular product for profit and then others think, “Hey, I can do that, and produce it for a nickel cheaper.”
Let the price wars and competition begin.
Value-added also carries a risk factor. If we know one thing about farming, it’s that farming is one of the riskiest occupations. Give it one more boost with another risk, then we can jump into the mega-risk factor. It is another unknown, this value-added concept.
What I am seeing is more contracts being written and implemented. A farmer agrees to provide a certain product for a certain price, and is therefore rewarded with a small profit per animal or per bushel produced. This may be in a specialty livestock area or special crop that they are proficient at growing.
I have seen some value-added cooperatives or ventures succeed and some fail miserably. You need to have all your ducks in a row to succeed in that market.
But, know matter how well it is planned, the consumer still may not have a need for it at that time. The result? Money was lost, and you’ll be back to square one. However, I believe it can be done. When we stop dreaming, we stop progressing.
Bradley Goering can be reached by e-mail at www.thecsb.com, or by telephone at (620) 327-4941.