Alliances to Remain Profitable
Clark County Home
One Day, Produce May Bear Your Name
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I'm a "name brand" kind of guy. When I was born my Dad owned a grocery store. He would tell me what the best brand of canned foods was. If it was soup, it had to be Campbell's. I never have bought a can of soup that wasn't "M'm! M'm! Good!" I love pineapple, but it better be Dole's. And if my wife brings home toilet paper that is not Charmin; I'm fighting mad!
For some strange reason my philosophy on "name brands" does not hold true for pharmaceuticals. Maybe it's the cost of prescription drugs that causes me to ask for a generic brand. You would think prescription drugs would be more important to me than toilet paper, but for some reason generic drugs is acceptable. By now you have to be asking "What has this go to do with agriculture?" The answer is everything. Agriculture is engulfed by a tidal wave of rapid change. One hundred year old companies like Purina have been bought by others. There are no more tractor dealerships in Greene County. Clark Landmark, Inc. is no longer Clark Landmark. 1743 county dairies now number only five and 240 acres no longer supports a farm family like it used to. Like it or not, agriculture has evolved into two entirely different segments: generic and value added (name brand). This polarization has been occurring for some time, but South American giants, Argentina and Brazil, have accelerated the process. In 1997, Argentina and Brazil have surpassed the United States in exports of soybeans and soy products. The USDA is projecting in 2002 that Brazil alone will produce more soybeans than the U.S. The huge expansion in South America has caused U.S. commodity prices for corn and soybeans to drop to unprofitable levels for many farmers. As a result it takes many more acres to net enough money to support a farm family. The USDA projects that this will not change in the near future (next six years). The above is why I believe that one must decide which agriculture they can compete in: high volume-low price commodities or small volume-high price value added agriculture. Many of our producers are not big enough to produce low price commodities and survive. Brazil and Smithfield will see to that. However, the future in agriculture can be very bright for those who recognize this and decide to produce for value added markets. It's time to quit growing something for nothing. 
The greatest satisfaction I have received in my career as an Agricultural Extension Agent is to have assisted many farm entrepreneurs to research, establish and expand a new very profitable enterprise. To have seen these farms not only keep mom and dad "down on the farm", but to bring son and/or daughter back in to the farming operation has been very rewarding. Value added has a wealth of opportunities for farm families that are willing to change and have the vision to capture a new market. Value added is many things. It may be selling produce directly to consumers. It may be growing a specific crop for an end product and getting a premium for it. It might be raising dairy heifers and capturing a premium on my crops going through livestock. It may be processing my own field crops. Profitability for most farmers in the future will mean value added. The competition for land in the midwest will not allow many producers to be big enough to net enough small margins per acre to feed a family. Your goal should be to net several hundred dollars per acre not $25.00. There are producers in Illinois netting several hundred dollars per acre grazing livestock! There is help coming for all producers in identifying value added markets. Heartland Agdeavor Association was unveiled at the Farm Science Review last fall. It is the brainchild of The Ohio State University, Ohio Farm Bureau and the Ohio Rural Development Partnership. Its mission is to: serve as an incubator for new value added ideas; perform feasibility studies; assist producers in putting together business plans; and do research and development for producers and investors. I am optimistic for the future of agriculture for those who are willing to embrace change as an opportunity to improve their livelihood. A changing agriculture always creates new opportunities. It will for large producers and it will for small ones as well. In my next article I will discuss the latest emerging opportunity for farmers: Alliances. Will it be generic or value added (name brand) agriculture for you? Who knows - maybe one day your product will have your name on it. It feels good when that occurs. Just ask the Waymires. Keith L. Smith, Associate Vice President for Ag. Admin. and Director, OSU Extension TDD No. 800-589-8292 (Ohio only) or 614-292-1868 Updated: March 2002 |