Niche markets may yield answers for regional farmers

ON THE FARM

June 01, 2008|By TED SHELSBY

Although prices continue to rise at the supermarket, the farmer's share of the American food dollar has declined 35 percent over the past 27 years, and the farmers are looking for ways to reverse this trend.

Niche marketing may be the answer, particularly for farmers in the Mid-Atlantic region, one of the most populous sections of the country.

Niche marketing or direct marketing involves farmers selling directly to the consumer, and it can boost their share of the food dollar by providing them with a higher return per unit sold.

This is a conclusion of a recent report, "Niche Marketing Outside of the Box, but in the Black," by Ginger S. Myers, a regional extension marketing specialist with the University of Maryland Cooperative Extension.

Maryland's farmers are facing increased pressures that threaten the viability of their industry, according to Myers.

These include land fragmentation and high land prices. Maryland has the sixth most expensive farmland in the country, with an average price approaching $10,000 an acre, according to the U.S. Department of Agriculture.

Farmers are also fighting diminishing profit margins due to increased production costs.

From a national perspective, the USDA census of agriculture shows that the value of agricultural products sold directly by farmers to consumers in the U.S. increased from $591.8 million in 1997 to $812.2 million in 2002, an increase of 37.2 percent.

Over the same period, the number of farmers selling directly to consumers increased by 5.5 percent.

Farmers' markets are a popular form of direct marketing. Across the country, the number of farmers' markets more than doubled between 1994 and 2004, from 1,755 to 3,706.

In Maryland, the number of farmers' markets has increased steadily in recent years. According to the state Department of Agriculture, there are 83 farmers' markets in Maryland this year. This is six more than last year.

In a message to farmers, Myers says that "direct marketing requires you, the producer, to change your marketing mind-set."

"No longer can you just produce and sell the product. You must be willing to become a marketer. Product-driven marketing requires you focus all your marketing efforts on selling more of a particular product to as many customers as possible."

She says that niche marketing allows a farmer's business to be a big fish in a small pond.

"Commodity marketing, selling at the livestock auction, or selling through a cooperative does not differentiate your product from the mass market," she writes.

She says that niche marketing requires farmers to focus on a targeted segment of the population, such as a specific geographic region, a particular demographic group or a group of people with shared interests.

As examples, she listed consumers who want to purchase pasture-raised meats, organic vegetables and antibiotic-free beef or chicken.

"Smaller specialized markets are often overlooked by mainstream companies and can provide a profitable, targeted customer base," she said.

She added that successful marketing niches must be large enough to be profitable, but not large enough to attract competition from other mainstream companies.

Myers warned, however, that "while niche marketing can be very successful, remember that they are by nature short-term markets that tend to disappear after a while. You must remain vigilant for new niche marketing opportunities and be flexible enough to adjust your products or delivery system to consumer demands."

Agriculture is the state's largest commercial industry. It contributes more than $1.5 billion in revenue annually and 14 percent of the state's work force is involved in the production of food and fiber.

A survey done this year by the University of Baltimore's Schaefer Center for Public Policy showed that 76 percent of Maryland consumers are more likely to buy produce that is identified as having been grown by a state farmer.

The survey also found that 42 percent of consumers would be willing to dig deeper in their pockets and pay 1 percent to 20 percent more for local produce.

Another finding was that 82 percent of the state residents had shopped at farmers' markets during the past year.

Health benefits

Scientists at the U.S. Department of Agriculture's Agricultural Research Service say that the consumption of fruits and vegetables can help preserve muscle mass in older men and women.

A three-year study of nearly 400 male and female volunteers ages 65 or older showed that those with diets rich in potassium could expect to have 3.6 more pounds of lean tissue mass than volunteers with half the higher potassium intake.

That was enough to nearly offset the 4.4 pounds of lean tissue that is typically lost in a decade in healthy men and women 65 or older.

Father's Day at Fiore

Fiore Winery, an award-winning vineyard in the Pylesville section of Harford County, will stage a Father's Day Italian celebration June 15, from 1 p.m. to 4 p.m.

The charge of $10 includes a wine glass and wine tasting. There will be a variety of Italian foods available for purchase and live music provided by the Mario Manoldi Italian band.

For additional information, call the winery at 410-879-4007.

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