If marketing has you seriously confused, consider yourself normal. It’s no small task to understand what prices mean, learn how to use the various contracting and risk management tools available, and then to craft it all into a strategy that works to maximize profits for the farm. In addition, research suggests that marketing is a hard job for many farmers to begin with.
An article in the November 2005 issue of Country Guide, entitled “Are You Hardwired for Marketing?” suggests the frustration farmers feel is due to an imbalance between marketing goals and personal risk tolerance. Author Edward Clark refers to research done with farmers by Paul Tieger and Barbara Baron-Tieger using the Myers-Briggs personality test.
Tiegers’ book, Do What You Are, identifies the personality well-suited to the production side of farming as a ‘sensor’: one who is pragmatic and accurate; who prefers the real and the concrete; and who works diligently on projects that absorb his or her interest. According to Tiegers’ research, many farmers are ‘extreme sensors’. On the opposite end of the spectrum is an ‘intuitive’ personality, one who likes thinking in conceptual rather than in concrete ways; and is prone to analysis. Marketing is said to be a natural profession for intuitive personalities because they enjoy fast-paced, charged environments and thrive on change.
Perhaps this is why many western Canadian farmers look for external solutions or a ‘quick fix’ to optimizing their marketing performance. A survey of producers released in the spring of 2006 by the Canadian Wheat Board (CWB) reported 63% want wheat marketing to remain the sole responsibility of the CWB, while 40% feel that private grain marketers get better prices. Reading between the lines, it seems everyone wants either the government, or the private trade, to take the responsibility for marketing their crops.
But the fact is, neither type of organization actually bears the same risk as grain producers, making it unrealistic to expect either to always be acting in farmers’ best interest. This is why taking more control over marketing the farm’s crops, rather than less, is so important these days. The personalities of the various buyers of crops are almost as important to incorporate into a marketing plan as a farm manager’s own personality.
No matter their size or structure, no business is immune to the realities of the marketplace. No buyer, whether it be a multinational, a former pool elevator, or a government organization that sells on behalf of all farmers, will willingly pay a farmer more than the crop is worth, based on the price in its next-use market less the cost to move it there. Furthermore, most buyers position vis-à-vis farmer sellers has changed in recent years, and appears likely to continue to do so in the years ahead.
Clarifying the positions of the players in the markets for your crops is an important part of bridging the farm’s internal financial situation to the external marketplace, which is the essence of marketing planning. Having realistic expectations of the parties on the other side of marketing transactions can go a long ways to responding most appropriately to the price signals they send, and executing your marketing plan successfully.