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Farming Without Chemicals in Ohio
A Case Study Report

Author: Keith Dix
Innovative Farmers of Ohio
in cooperation with the Citizens Policy Center

3. How do I market organic crops?

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
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.