Marketing

Demand of and production for organic products has been growing rapidly since the late 1990s. In spite of the rapid growth marketing remains an obstacle for many new organic farmers. Organic producers rarely market their commodities through the local elevator. Successful organic marketing requires producers to actively seek and research buyers, negotiate contracts, and build relationships with wholesalers, retailers and consumers.

Just as most organic farms raise a diversity of crops and livestock, organic farmers often use a diversity of marketing channels. Organic markets range from international to direct local markets.

Commodity Markets

• Organic markets can be quite unpredictable. The demand for organic grains can vary considerably depending on the variety, quality and available supply. This poses a challenge for inexperienced producers trying to market organic grains.
• Marketing organically produced grains is quite different from marketing conventional grains. Organic producers often contract their production with a specific buyer prior to planting. However, there are markets for well established commodities that do not require contracts. Either way, it is very important to research potential buyers prior to making any sales to ensure they are reputable. Ask other farmers about their experience with the buyer. Check the Better Business Bureau in the state where the buyer is located. Do a check of the company's credit.
• For food-grade products, most buyers will want a sample and an assurance that the entire shipment will be of the same quality. There is more flexibility on quality in the feed markets. It is very important for producers to use proper sampling techniques to produce representative samples. See this NDSU publication for helpful information on sampling equipment and techniques.
• Read all contracts carefully. Important questions to ask might be
  • What are the quality specifications?
  • Is the contract for the production of a certain number of acres or bushels?
  • Is there an "act of God" clause?
  • Where will any disputes be settled?
  • When will you be paid?
• Learn more about contracts. Check out the Farmers Legal Action Group or the Organic Trade Association's list of resources about negotiating contracts or talk to your own lawyer.

Direct Marketing

Direct marketing requires the producer to develop relationships directly with consumers, retailers, restaurants and/or wholesalers and are most often used by fruit, vegetable and livestock producers.

• Farmers Markets. Farmers markets nationally have multiplied from 1,755 in 1994 to more than 4,385 in 2006. The growth of farmers markets continues to be fed by increased consumer interest in fresh, local and organic food. More and more farmers are finding this form of sales to be an important part of their marketing plan. Farmers markets provide education to consumers through direct contact with the people who grow what they eat. Local communities benefit from access to fresh produce as well as boosting the local economy. Farmers markets may have rules and bylaws which govern sales and membership. Successfully selling at farmers markets requires learning how to package, display, price and sell a product as well as being sure you have met all health and food safety requirements. A list of farmers markets in North Dakota can be found on the North Dakota Farmers Market and Growers Association web site.
• Farm Direct Sales. Some farmers sell directly to customers either by making home deliveries or having customers pick up products at the farm. This form of direct marketing requires the farmer to develop a customer list and to communicate with those customers on a regular basis. Producers should know what food safety rules apply. Asking customers to come to the farm to pick up products may create additional liability issues. Consider what your operation looks like to your customers. Direct sales not only require that you sell a quality product, but that you sell your farm's story as well.
• Internet Sales. Producers can sell directly from a web site, shipping products anywhere. Things to consider might be time to maintain an e-commerce web site, shipping availability and cost, consistent availability and quality of product. Some producers use the internet as a tool to advertise their home delivery or on-farms sales through their own web site or sites such as Local Harvest.
• Community Supported Agriculture (CSA). In a CSA, a farmer sells a share or subscription to individual consumers for the year’s crop of vegetables, eggs, honey, or other products. The shares are sold in the spring and then boxes of produce are delivered to or picked up by subscriber consumers. The customer shares the risks of weather, crop failure and too many zucchini. Since the shares are paid for at the beginning of the growing season, the farmer knows how many customers he/she will have and has cash available for operating costs. The consumer has a steady supply of a variety of fresh farm produce. For more information on operating a CSA see our Links page.