3 ways to add value to the ag industry
Adding value, whether to an individual operation or an entire industry, is a hot topic.
Recent presentations at the CAES annual Ag Policy conference and a Choices article highlight the new opportunities to add value in agriculture. Commentators point out that, traditionally, adding value was simply seen as processing raw commodities. But now, there are so many more options.
Canadian and U.S. agriculture industries are working hard to define the new value-add opportunities to help:
- Individual producers and industries connect with consumers
- Lenders evaluate business plans
- Policy makers develop relevant policy and
- Researchers push innovation
How you can add value to the ag industry
In a changing landscape that’s shaped by consumer preferences and their influence over the supply chain, adding value isn’t any easier now than it was in the past. But there are more ways to do it.
1. Transforming an agricultural product’s form, time and space characteristics (this includes the traditional definition)
Recent examples of this include canola, pulses and wheat: These Canadian successes allow for the marketing of canola as a healthy alternative; the development of flours from pulses offering higher protein and fibre content; marketing of wheat as an input to make traditional foods around the world, and helping grow its consumption in emerging markets.
2. Vertical integration into a supply chain, or coordination among farmers, to bypass steps in the supply chain to better connect with consumers
Example: The ProAction Initiative, headed by the Dairy Farmers of Canada is a prime example of a response aimed to exceed regulatory requirements. Gaining consumer trust about the quality of dairy products and the traceability of the entire Canadian dairy herd is one way for the sector to succeed in this changing landscape. The newly developed Canadian Dairy Network’s website, CDN.ca allows anyone access to evaluations of every Canadian dairy cow.
3. Altering activity or production practices at the growing stage to produce foods consumers value at a premium
The labeling and segregation of organic products and the identification of a product’s origin as a value-add differentiator are just two examples.
Is the time right to think about value-add activities?
If you haven’t already started thinking about value-add activities, now is the time!
Canada’s population is changing. We’re getting older and more ethnically diverse with a greater range of demands for healthy/local/humanely produced/environmentally sustainable food. We’re also getting choosy about who gets our food dollars and why. Global consumers are also changing as new markets emerge.
A good business plan identifies unique ways to respond to consumer demands, so you can enhance competitiveness and build a customer base. It’s a great way to keep current and competitive in this changing market.