Undoubtedly, the most frequently asked question by farmers who are considering
making the transition to organic production is "How do I go about
finding a buyer for my soybeans, grains, hay or other organic crops?" While
the prices for organic soybeans shown below may be an inducement to farm
organically, they are without meaning if markets are unavailable. First
of all there is no "market" in the traditional sense of the
term,the local grain elevator does not buy nor store organic crops and
there is no commodity market established for organic crops, at least
not at the present time. This means that each individual farmer must
seek out his or her own buyer, establish a relationship with that buyer
and, hopefully, sign annual production agreements. These agreements establish
a price the buyer will pay and the acreage of a specific drop the farmer
will harvest and deliver. Some of the farmers interviewed have established
good, long-term relationships with buyers, yet others operate on a more
ad hoc basis, seeking buyers every year. Those who take it year by year
agree that the network of organic growers is extremely helpful. The telephone
has become as important a farm implement as the rotary hoe for the organic
community. (See Appendix C for a partial list of buyers of organic soybeans.)
Conventional and organic soybean prices per bushel, 1997 - 1999
Year |
Conventional |
Organic |
1997 |
$6.00 |
$17.00 |
1998 |
$5.48 |
$18.50 |
1999 |
$5.48 |
$15.50 |
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Source: Dean McIlvaine
Note: Several of the farmers interviewed reported recently
that they have signed contracts for soybeans in 2000 at $17.50 a bushel.
Steve B. When asked
about his marketing strategies, he said: I went to our local elevator
and told them I was looking for someone to buy chemical-free beans
and that I wanted a long-term relationship, someone who's going to
be there year in and year out. I got connected with Farmers Grain
Dealers. They sell to Japan, a company called Mitsuibishi, not the
car company. Farmers Grain Dealers are in Perrysburg, Ohio. They
have a cleaning facility over at Columbus Grove, state of the art.
They have been really good to us. Geoff M. He answered the marketing
question by saying: "Oh boy,...in the beginning I just sold it
down at the local mill for conventional prices. Once I got in the OCIA
chapter, you just call the other fellows and see what they're doing,
I guess. You want to see how well they (a buyer) paid at the other
end. My practice is that when I get someone who pays well and is reliable
and grades my stuff accurately, I feel, and isn't going to be in and
out of the picture...I kinda stay with those people rather than looking
for higher prices. I got $4.00 for my corn last fall to a guy who has
organic turkeys in Pennsylvania. I appreciated getting this price and
have sold him corn recently for much less, to fit his budget and to
maintain our business relationship."
Ron G. He was asked about selling his spelt and soybeans: The first
year I was certified I got soybeans in the bin but they weren't the
tofu type, they weren't anything that anybody wanted. I really didn't
have any contracts. I ended up with a bin full of beans that I didn't
have much hope of selling. I spent too much time learning about how
to grow it and not enough time learning how to sell it if I did grow
it. So, it was a learning experience. I ended up selling the beans
for chicken feed, certified organic, but I didn't get the price that
you can today. The next year I got the contracts up front and got the
marketing end of it pretty well under control. Our soybeans today go
to American Soy Products in Ann Arbor, Michigan. It was my second year
that I got linked up with them and, I don't remember how exactly, but
they have grown so maybe what I say now won't be true forever. One
year, about the 4th year, we got a letter saying that they were giving
us another dollar a bushel to add to the price they were giving us
because market conditions had improved. People don't normally do that.
That pretty much cemented my relationship with them....They're good
people to deal with. I have dealt almost exclusively with them since
then.
Dean Mc. Dean was asked how he got into the business of brokering
and hauling beans and grains: It developed out of my quest for good
markets and as I found good buyers, they seemed to always want more
than we could provide. So in order to help solidify my market with
them I've been helping source grains to keep these buyers happy. It's
not a job they like to do, to run all over looking for farmers when
they can find a good farmer who can take care of it for them. That
simplifies their work, improves your position with them. It just adds
more service and value to the commodity you produce. And I need to
do something on rainy days. Also, it's a good way to keep in touch
with the market and other farmers. It's good supplemental income, better
than getting a second job in town, which most farmers have to do.
Byron K. He sold
his spelt last year to Dean McIlvaine but in previous years sold
it to American Health and Nutrition. He has been unable to find an
organic market for his organic popcorn, so it's sold as non-organic. "Maybe I didn't look aggressively enough for a market." he
said.
Jeff D. He feels
very optimistic about the marketing opportunities for organic crops:
The first year I was worried about it. That's one of the first things
everybody asks you, what do you do for marketing? Where do you take
it? I talked to other growers and they said, "Don't
worry about it." But when I first started, I was worried. After
I got certified that fall, the phone rang off the hook. At least every
week somebody called: Do you have this? Do you have that? It was mostly
organic soybeans they were looking for. Marketing has not been a problem
at all. If I have something I don't have a contract for, I just start
calling around. A guy just called me yesterday, looking for corn. I
gave him two numbers and I'm sure he'll get two more numbers from them.
He may make five calls but he'll get what he wants. I get mine sold
that way. I've never had a problem. Dean McIlvaine takes all my spelt,
or most of it. The beans really sell, people are begging for beans.
I contracted for $19, but the quality was bad because of the drought
so I sold them for $15.50. This year we contracted for $17.50.
Nelson and Lynn W. "Marketing?...I just do a lot of telephoning," Nelson
said. Their beans are sold to the Clarkson Grain Co. and their corn
is usually sold to "brokers in the east with some going to chicken
farms&endash; seems like there's a need for it out there." And
what about the hay in their rotation? "It's not sold as organic
because I don't know where there would be a market for organic hay." He
did think that there might be a market for it in the future with the
cheese plant in Holmes county now buying organic milk from local dairies.
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