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How are you
handling all the new food safety and
traceability expectations?
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It’s the dawn of a new era...
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VGN is expanding its presence in the online realm. Thus, we introduce you to eVGN, a monthly newsletter with exclusive content you won’t find anywhere else – not even in our print publication or on our Web site. It’s one more way for us to give you the information you need.
Each newsletter will include a Question & Answer session with someone in the produce industry. It could be a grower, researcher, Extension educator, seed company representative – you name it. Heck, it could be you. Let me know if you’re interested.
Our first Q&A is with Marco Palma, an assistant professor and economist with the Texas AgriLife Extension Service of Texas A&M University. I saw him speak at the 54th New Jersey Annual Vegetable Meeting in Atlantic City a couple weeks ago. He had a few things to say about marketing and pricing.
So anyway, enjoy our first newsletter. It truly is the dawn of a new era...
And by the way, did you hear we have a new president?
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Marco A. Palma
Assistant Professor and Extension Economist
Texas AgriLife Extension Service, Texas A&M University
What are the biggest challenges facing the horticultural industry today?
The industry is facing many challenges, such as stronger competition from less expensive imports, increasing consumer concerns about the safety of horticultural products, increasing input and energy costs and availability and cost of labor. On the other hand, consumers are looking for healthier lifestyles, which drives the “green” movement – and that represents an opportunity for growers to exploit environmentally friendly, pesticide free, local, organic, etc.
What are some of the marketing options available to U.S. fruit and vegetable growers who want to sell fresh produce?
Consumers are willing to pay more for those products that are different. Direct marketing, or selling directly to consumers, is gaining more attention because it increases grower margins and is an excellent way to promote and sell “green” products. There has been a substantial growth in the number of markets and products sold through direct marketing approaches, including pick-your-own operations, roadside stands, and especially farmers’ markets. Community Supported Agriculture, or CSA, is also getting a lot of attention.
What are the latest consumer trends growers can take advantage of?
Growers should look into some of the trends described above to see which opportunities they can identify in their regions. Perhaps some of these marketing strategies can be modified a little to be adapted to specific market conditions in their areas.
Deciding how much to charge for your product can be tricky. What factors should a grower consider before making that decision?
There are many factors to consider. The first should be the customers. It is easier to sell customers what they want than growing what we like and then trying to sell it. The production costs are different to each firm because of the location of the farm, management practices, size of the operation, etc. Growers need to calculate their per-unit cost of production for each product. Once they know their cost, they can identify those products with larger margins and grow them. They can also compare with their competitors and see which products they can grow better (competitive advantage).
Is it better to overcharge or undercharge?
It depends on the operation. As long as we are selling above our costs, we are still making money. There are certain situations where growers might produce one or two products to attract consumers and, once they come to buy, they will buy other products as well.
What factors determine the optimal product mix for a grower?
The key is identifying those products that we can grow and be more cost efficient than our competitors. In order to do so, we need to keep a good cost accounting system and also be open to try new products and new varieties.
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Events Calendar
January 31, 2009
Iowa Farmers’ Market Workshop
Sheraton Hotel, West Des Moines, Iowa
Barbara Lovitt, 515-281-8232, barbara.lovitt@iowaagriculture.gov
February 1-7, 2009
North American Farmers’ Direct Marketing Association
Annual Convention, Savannah, Ga.
www.nafdma.com
February 3-5, 2009
Mid-Atlantic Fruit and Vegetable Convention
Hershey Lodge and Convention Center, Hershey, Pa.
717-694-3596, pvga@pvga.org, www.mafvc.org/html/
Click here to view more calendar listings...
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