Choosing Your Market -- A Direct Marketing Decision Tool

Farmers capture a much higher share of the consumer food dollar when they market their produce directly to consumers. Direct marketing offers several benefits for farmers. Cash payment, premium pricing, and elimination of the middleman wholesaler draws farmers to these avenues of marketing.

Direct marketing makes sense for farmers who are producing low volumes of a variety of crops. Farmers who produce large volumes of a particular crop will usually find wholesale marketing more profitable. USDA and other producer surveys indicate that organic farmers market directly much more frequently than do conventional farmers. Farms of less than 20 acres account for the majority of the direct marketing in Georgia. In 2002 only 3.3% of the sale of agriculture products was sold directly to individuals for human consumption in Georgia. Therefore, there is much opportunity for growth of direct marketing of fruits and vegetables in Georgia.

The types of direct markets considered in this tool are farmers' markets, on-farm markets, community supported agriculture (CSA) and Internet markets. There is background information on each of these types of markets and stories about various Southern farmers using these strategies of marketing on this website.

The Direct Marketing Decision Tool will help you evaluate your farm on five of the factors that are barriers to entering a market. These factors are: location of the farm, special expertise, transportation, physical resources, and regulatory constraints. Information will be presented to help you determine your ability to jump the barriers these markets present. You will compare your ability to jump with the height of the barriers for a particular market in order to identify the best markets for your farm products. Once you have these markets identified, you must also consider perishability, value of the market, your personality and other unique personal factors to come to a final decision on your best marketing strategies. Many if not most farmers use a combination of marketing strategies to enhance their profitability.

One of the basic factors to consider is perishability, or how long a product is edible. Internet marketing presents a special challenge, as the product will generally be shipped. The cost of shipping a perishable crop may make that marketing strategy cost-prohibitive, whereas, with a product that is nonperishable or with a low perishability, it may be feasible. A list of some common farm products and a ranking of their perishability can be found on this website.

Another factor to consider is the value of a market. All markets have limiting factors that determine the maximum profit one can make. These factors tend to be unique for a particular farmers' market, CSA, onfarm market or Internet sales program. Many times the limits are set by the size of the customer base, location, or time. A table discussing the potential values of the markets can be found on this website.

One of the reasons people like to buy direct is that they can interact with the farmer, the person who grows the food they are buying. If the farmer enjoys this interaction and is helpful and friendly, it will increase the chance of success in the market. If this type of interaction is not enjoyed by the farmer, farmers' markets, on-farm markets and CSAs will probably not be satisfactory, unless there is a partner to perform these functions. Consider your personality when weighing types of markets to enter.

One way a farmer can enhance the viability of their operation is by producing an array of value-added products - foods processed from their farm products - to sell directly to the consumer in addition to fresh fruits and vegetables. Some examples of value-added products are salsa, syrup, cider, pickles, preserves, jelly, dried and canned fruits and vegetables, butter, yogurt, cheese, milled flour, meat products, and wine. These products command a much higher price than the fresh products and can help diversify a farm's product line. More information on value-added products can be found on this website.

Click Here to return to the table of contents.