Canadian farmers need to understand their customers better
By Laura Rance
Farmers attending this year’s AgEx conference received what some would consider odd advice: when you are building a marketing plan, don’t focus so much on the market.
“The market doesn’t always take care of farmers,” Nicole Rogers, founder and CEO of Agriprocity, a Dubai-based company linking farmers to international buyers, told about 200 participants in the annual event put on by Farm Management Canada.
Rogers said many farm operations, including her own family’s, have fallen victim to the notion that marketing is about simply selling to the highest bidder.
She grew up in Ontario during the 1970s and 1980s on what was once the largest beef feedlot in Canada. The business no longer exists and she believes it is because its managers had a false sense that they could continue to do what they had always done and the market would eventually come around.
“My grandfather just believed that if he waited another two years there would be a market correction, but market corrections don’t always come.”
Farmers have to think of themselves as a brand. – Nicole Rogers
Today, Rogers operates a company focused on linking farm suppliers in Canada, Argentina, Russia, Australia to buyers in long-term supply relationships that benefit both sides. It’s a concept that may not pay the highest market price, but it offers farmers marketing stability at prices that respect their costs of production. It often also entails investments by the buyers in infrastructure that supports the supply chain.
“For me, marketing is so active. Selling is not active. Selling is just passing some of the product into the market,” she said.
Participating in these marketing networks requires farmers to focus on the “who” and the “where” and less about the “how,” she said. Once they have a buyer and a partnership in place, the ‘how’ tends to fall into place.
It’s a transition in thinking that Canadian farmers find difficult — and it’s costing them valuable opportunities in the global marketplace, she said.
Rogers said she was flabbergasted to be reading about the spat between Alberta beef farmers and Earl’s restaurants in Dubai earlier this year after that company’s decided to source beef in the U.S. when it couldn’t find enough product in Canada that met its specifications.
Ranchers needed to be on the phone to that company offering to solve its supply problem because “markets like that one don’t go away, “ she said. “Earls is never going to stop buying beef.”
Whereas farmers in competing countries have demonstrated a willingness to adjust their production and marketing to meet emerging market demands such as organics, Canadian farmers are reluctant to change — even it it means making more money.
“They say I am not an organic farmer, I am not a spelt farmer — that’s like a hippy farm,” she said. Or, “I don’t want to grow organics, I don’t believe in organics — but it shouldn’t be personal.”
“I see organics as a business,” she said. “I’m actually not very altruistic, I don’t see it as a ‘feed the world’ thing. What I see is is an opportunity to fight the market consolidation in the organic story.”
Rogers said it is about branding.
Farmers “have to think of themselves as a brand, and then look to the market and see a gap and use their brand to fill the gap,” Rogers said in an interview following her presentation. “So forget about the fact that they do pulses and barley because it’s a good rotation, because that’s the ‘how’.”
She acknowledged the current configuration of Canada’s grain handling and transportation system makes it harder for farmers to work directly with buyers. But she anticipates buyers choosing to make strategic investments in grain loading infrastructure located on rail lines to enable direct sourcing.
“Forget the $100-million dollar asset and build 100 million-dollar assets, it’s like a little tertiary supply chain,” she said.
Rogers said Canadian farmers can’t outcompete their competitors in many parts of the world on production efficiency.
Farmers in countries such as Kenya, Argentina, Nigeria, Kazakhstan and the United States can either produce similar products at lower costs of production or they can produce higher-value crops that don’t grow here.
For example, those who say organic farming systems are less efficient and therefore too costly, ignore the fact that much of the world’s agricultural production is organic by default. Farmers in countries such as Kenya and Nigeria don’t use pesticides because they can’t afford them.
“Everything in Nigeria is organic, it’s just nobody has marketed it that way. Cashew guys just started calling it organic and they get 40 per cent more,’ she noted.
However, Canadian farmers do have an advantage they don’t appreciate — more taxes and regulations.
While farmers view government oversight as increasing their cost of doing business, it offers international investors the stability they need to make long-term investments and strategic alliances.
“If you are talking a five-year-contract in Nigeria, I don’t know what’s happening next month,” she said.