This is not a commodity!
I recently read an article from Ag Web titled "Make Yourself a Farmer of Choice."
I saw the title I was intrigued as this particular website is focused
on industrial agriculture and commodity products as far as I can tell.
I thought "this should be interesting, how do you become a farmer of choice with a product that is a commodity?"
The author started out saying "how you position yourself as a farmer will determine your success with suppliers and buyers."
Ah so we're talking about the relationship with our "suppliers and buyers."
What about customers?
as a commodity farmer you don't have customers. At least not a customer
as the small farmer
who sells direct has customers.
I mean you go down to negotiate your grain sales, how much negotiating power do you really have?
you take a load of cattle to the buyer, and you get what the market
says you get. Many people don't realize it but almost all commodity
cattle is bought "on the rail."
That means your cattle are slaughtered and hanging on the rail before a price is decided.
Um, what if you don't like the price? Do you load up your carcasses and take them elsewhere?
The author also said
- What do we do best?
- What is our target customer?
- What needs do we fulfill for them?
- Who is our competition?
- What makes us different from them?"
really good questions but as a commodity farmer I'm still left
wondering how you would have much of a direct impact on these issues.
I'm certain you would have some impact but not nearly what the small farmer
who is selling direct to consumers would.
article went on to say “You need to know what sets you apart from your
competitors. Your competition is anyone that farms around you.”
Maybe I'm misunderstanding the authors intent here, but how could you be in competition with your neighboring commodity farmer?
The very definition of commodity defies it.Commodity
- A basic good used in commerce that is interchangeable with other
commodities of the same type. Commodities are most often used as inputs
in the production of other goods or services. The quality of a given
commodity may differ slightly, but it is essentially uniform across
I can't figure out how you make a commodity
competitive. From where I sit the commodity farmer has the least control
over his products value in the marketplace.
The local commodity
buyer doesn't care about how you raised your cattle on grass and never
gave them hormones etc. They want to look at carcass quality and that's
the end of the story. They are looking to get the price down not find
ways to pay you more.
And grain? What kind of story can you tell
the grain elevator and get a better price? They look at a few factors of
quality and test weight and it is what it is...take it or leave it.
best advice I can think of for a commodity farmer is start
transitioning away from commodity sales with the intention of moving as
much of your products to direct sales as you can.
Until next time....
Posted by David
@ 06:58 AM EST