Guest Post: How Organic Farmers Can Reap Even Stronger Profits with the Specialty Markets
Investors diversify their portfolios for financial stability. Farmers can do the same by diversifying their crops and the markets they serve.
If you’re an organic farmer, you’re already off to a great start. But you can diversify even more — and boost your bottom line — by getting into the organic specialty markets.
Capture higher premiums
Organic farmers already see significant profit potential from the high premiums of organic commodities. (Note: organic corn and soybeans have averaged over $9.50 and $20 per bushel, respectively, in the last decade.)
With specialty crops like popcorn, clear-hilum soybeans and grains for food companies, the premiums are even higher.
You can conservatively expect to sell organic specialty crops for 10% above organic commodities.
Finding the right buyer
Breaking into the specialty markets depends on two things: your reputation and your network.
We recommend growers get some solid organic production experience before venturing into the specialty markets.
Even the best farmers make mistakes in their early years of organic. You don’t want a valuable learning experience to occur on an important contract.
On B&B Irlbeck Farms, we were certified organic for 5 years before we got into specialty crops. I’d advise giving it at least 3 years after transitioning to organic.
Once you’ve built up your organic experience and reputation, you can begin to seek out buyers.
Don’t be afraid to make some cold calls. Start in your own backyard. That’s how we became the organic grower for a local distillery.
How to serve the specialty markets
Scored a contract? Congrats! Now it’s time to make sure you deliver.
Naturally, specialty markets pay more because it takes a higher level of management and production.
You need to be even more on top of the weeds and fertility. And you need to make sure you’re buying the right organic seed.
But growing the crop isn’t usually the toughest part. The challenge is managing the business relationship and providing them the documents they need.
If your buyer calls up asking for information, you should be able to deliver it within 30 seconds.
You need to be organized and detail-oriented. And you need to manage risk well because a failure on your part could be detrimental to their business.
Finally, you need the proper infrastructure. Make sure you have the correct handling setup, drying setup and harvesting tools so you can manage the crop separately from your other organic and conventional crops.
What it takes to succeed
To be honest, not every organic farmer can serve the specialty markets. The time and management required to succeed may not fit with the rest of their operation.
So how do you know if you have what it takes to become a specialty grower? Talk to one. They can explain what it takes to succeed and how to determine if it’s a good move for your business.
If you don’t know any organic specialty growers, reach out to us. Our team at AgriSecure has first-hand experience with the specialty markets.
Our mission is to help farmers succeed with organics, so we’ll give you the expertise you need. Your first call with us is always free.