Download Overview of the Department of Agricultural Economics Organic Project

Department of
Agricultural
Economics Organic
Marketing Study
Overview
By Simon Weseen
Purpose and Objectives
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Purpose
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Profile 4 commodities as they move from producer to end
consumer (wheat, lentils, oats, flax)
Objectives
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Provide a description of the vertical supply chain
Identify issues and opportunities for the marketing of these
commodities
Determine if there are opportunities for the gov’t to facilitate
industry development (e.g. provide information)
Provide new producers with basic marketing information
Identify opportunities for further research
Need for Marketing Study
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Few studies in the area of organic marketing
Thompson (2001) examined feed markets in Europe
and the US
 Alberta Food and Rural Development (2001)
profiled an organic grain and oilseed enterprise
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Neither study attempted to understand the
entire supply chain for non-feed commodities
Need for Study cont’d
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The organic industry is rapidly expanding and is
now entering mainstream markets
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New marketing information required
New entrants into the industry may require
information about organic markets
Examples of Issues/Opportunities
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Why does Saskatchewan export raw
commodities and import finished goods?
How can local processors develop relationships
with local retailers?
Is there a lack of marketing information
available to producers?
Are producers, marketers, processors and
certifiers satisfied with the relationships that
they have with each other?
Issues and Opportunities Cont’d
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What types of end products are produced from
commodities grown on the Prairies?
How do producers and other industry groups
perceive regulation?
How can producers maximize their returns?
Approach to Study
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Survey’s conducted on 4 major groups
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Producers, marketers, processors, and
wholesaler/retailers
“Mirror Image” approach
Interviewees are asked the same questions
 Can determine if all industry participants perceive
the same problems and opportunities
 Can make recommendations to industry based on
results
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Approach
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Example
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Marketers indicate that they are providing producers with all
information required to sell a crop
In contrast, producers indicate that they need more
information to sell e.g. time to sell, what to grow, etc
Result:
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Marketer loses producer as potential client
Producer loses potentially valuable marketing opportunity
Potential Recommendation:
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Marketers can keep producers happy by providing additional
information
Lobby gov’t to provide additional marketing information
Preliminary Results
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Results will be presented in a series of short
industry papers
Current Results are based only on producer
survey
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Analysis of Organic Wheat Buyers in
Saskatchewan: A Vertical Coordination
Approach
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Examines the type of marketing arrangements that
offer producers the highest return on wheat
Conclusions
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There are significant differences in farm price and
marketing costs under alternative marketing arrangements
Producer owned marketing firms were found to generate
the highest profit per tonne for producers
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Organic Producers’ Perceptions of Their
Marketers
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Examines the perceived importance of various
functions performed by marketers
Examines the effectiveness of marketers at carrying
out these functions
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E.g. advice on timing of sale, what to grow, future market
prospects
Conclusions:
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Producers were generally pleased with service
Young producers and very large producers were less
satisfied with marketing services
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Organic Producers’ Perceptions of Market
Information Availability
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Examines specific problems that producers may
have with marketing their wheat
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E.g. Contracts not honoured, quality and price disputes,
can’t find buyers, no market info
Conclusions:
Producers feel that they have much less market
information than buyers
 There may be a role for public or private market
information organization
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Organic Producers’ Perceptions of the Role of
CBs
Examines the importance of various functions
performed by certifiers
 Examines the effectiveness of certifiers at
performing these functions
 Conclusions
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Producers are divided on the importance, appropriateness
and effectiveness of services provided by CBs (e.g.
connecting with buyers, research)
 Less experienced and larger producers are less satisfied
with services performed by certifiers
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Organic Producers’ Perceptions of Organic
Regulation in Canada
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Examines producers opinions on regulating the
organic industry in Canada
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E.g. How would regulation affect market access? What are
the main marketing challenges for the organic industry?
Conclusions:
Producers support regulation that provides market access
 Developing a mandatory standard is deemed more
important than educating and promoting organics to
consumers
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Timeline
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Near completion of survey stage
Next Stages:
Data Analysis
 Writing of Industry Papers
 Marketing Guide?
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Industry papers available at our tradeshow
booth - come visit!
Questions or Comments?