November 2004 -- In recent years, traditional commodity marketing channels have not provided sufficient returns for many small- and medium-sized farmers to maintain a viable livelihood through only farm activities. The latest Agricultural Census reveals that the value of agricultural products sold directly by farmers and ranchers to consumers increased from $591.8 million in 1997 to $812.2 million in 2002 or by 37.2 percent. Over this period the number of farms selling directly to consumers increased by 5.5 percent.
While marketing directly to consumers has seen growth, not every operation can do it successfully. What are some of the key ingredients and ideas that enable some producers to successfully market their products directly to consumers? A publication of Western Profiles of Innovative Agricultural Marketing was recently published by the Western Extension Marketing Committee to highlight and examine some of the key ingredients of how several operations in the West have migrated from a traditional commodity focused business into a successful direct-marketing enterprise.
Even though direct marketing allows farmers to retain a much higher share of consumer food expenditures, the elements needed to make this production-marketing strategy a success are often not well understood. In part, this is because of their increased complexity as compared to commodity production-marketing systems. Traditionally, commodity producers have set goals for high yields and low costs of production in order to be a ?low cost? producer. However, personality skills, relationships, superb quality and service, willingness to change, and general business savvy were also found to be key for the direct farm marketing and agri-tourism enterprises examined in this publication.
The publication is not intended to be a step-by-step guide on how to start a direct farm marketing or agri-tourism enterprise, but rather identify the more subtle and unique factors behind the failures and successes of the enterprises examined and determine their strategies for meeting future challenges and risks. Direct marketing has proven to be a successful and sustainable alternative to traditional commodity markets for many agricultural producers in the western United States. As the enterprises considered in this publication have shown, direct marketing requires knowledge of long-term goals, substantial planning, flexibility and adaptation.
An example of one innovative enterprise covered in this publication is Love Family Farms. Kona coffee and exotic fruits are products the Loves market directly to consumers. To set apart their market niche they do several things. First, they custom make hundreds of coffee labels for events that range from company parties to weddings and Holiday festivities. Ken Love designs all his own labels and uses a relatively inexpensive desktop printer to print on foil paper a high quality looking label. Ken also speaks Japanese and has a fascination with their culture and social trends so he targets Japanese-owned resorts in Kona, Hawaii, to visit his farm. Some of these Japanese tourists become some of his most loyal coffee customers. One of Love?s more interesting enterprises is a ?coffee tree rental program.? Individuals can participate in the growing and harvesting activities of the tree if they so desire and Ken also has a location on their farm?s Web site where the consumer can go to see an updated picture of how the tree they have rented is progressing. To help minimize coffee processing costs, Ken shares processing facilities with neighboring producers through a local marketing cooperative.
A 122-page color publication with photos of the 17 enterprises studied is available at the Western Extension Marketing Committee?s Web site of http://ag.arizona.edu/arec/wemc/wemc.html. It can also be ordered online from http://pubs1.cals.arizona.edu/sales/index.cfmor from the College of Agriculture and Life Sciences; The University of Arizona; 4042 N. Campbell Avenue; Tucson, AZ 85719; Phone: (520) 318-7275, Fax: (520) 795-8508, Toll-free: 877-763-5315. The cost is $10 per single full-color copy.