Supply Chain Basics: Niche Agricultural Marketing, The Logistics

Many small and mid-size farm operators compete successfully in today’s agricultural marketplace by supplying specialty farm products. Growing numbers of consumers and commercial buyers are interested in purchasing farm products with specific qualities. These customer preferences may be as simple as a request for a specific volume of product, such as requiring a 20-metric-ton container of grain rather than a 40,000-metric-ton bulk vessel—the typical size of an overseas grain shipment—or it may be as complex as a set of specific practices for growing, processing, packaging, and merchandising a farm item, as is the case with organically labeled farm products. Other characteristics that differentiate “niche” farm products from mainstream farm products are: (1) Specific physical characteristics, such as food-grade soybeans compared with standard feed-grain soybeans, and high-oil sunflower seeds compared with standard sunflower seed varieties. (2) Physical properties proved by testing, such as foods confirmed to be free of genetically modified organisms (GMOs). (3) A farm product’s point of origin, especially local origin. In recent years, U.S. consumers have exhibited a growing interest in purchasing farm products from local sources, with the result that the value of farm goods sold directly from producers to consumers through farmers markets, roadside stands, community-supported agriculture arrangements, and other outlets increased 37 percent between 1997 and 2002. The local food movement is being buoyed by a host of social, economic, and environmental trends, including a desire to obtain fresher, higher quality food in season; to know exactly where one’s food comes from and how it was produced; to reduce fossil fuel usage in food transport; and to support the continued economic viability of local agriculture.