Farmers Must Strengthen Ties with Consumers

Knowing what consumers want and responding to market signals is tricky, say competition panelists

Published on: Dec 9, 2010

From local to organic to humanely-raised, consumers today want a dizzying array of attributes in the food they buy. Acting on those market signals is increasingly difficult for ranchers and farmers, despite new technology that allows for more trace back and documentation.

That was one conclusion reached during a panel discussion at the final workshop on competition in agriculture, held yesterday in Washington, D.C. The workshops, which began in Iowa last March and covered an array of competition issues, were sponsored by the Department of Justice and USDA.

"How consumers make choices has changed," says Dan Vincent, CEO at Pacific Coast Producers. "It's not just price; it now involves quality and safety."

Consumers are more and more interested in where their food comes from, said Chris Waldrop, director of Food Policy Institute, Consumer Federation of America. "They want more information - where it comes from, if it's nutritious, safe, the ingredients – they really need a lot more information about their food, not less."

But those market signals aren't always clear said Vaughn Meyer, a cattle producer from South Dakota. "We do recognize that there's been a 20% increase in branded products, but it's tough to follow," he said. "Producers are having trouble understanding what consumers want. Cattle cycles are usually 10 years, but those cycles are not there any more. I'm not really sure producers know where they should be."

Demand for branded, organic food will continue to grow, and that dynamic dictates a need for a better relationship from the consumer back to the producer through the food chain. What has to happen to get that done?

"We have to look to long term relationships that create value," said Barry Carpenter, CEO at the National Meat Association. "Producers need to know they will have a mechanism for capturing profit for that added value, such as ranchers who add beef on grassland production."

Vaughn says there is increased demand for niche products in beef, which means producers must ramp up communications at all levels over the next ten years. "That means we have to be there, and it's a struggle – we're losing 1,000 producers a month," he says. "That's alarming. We have to have fairness in markets and parity for our product if we're going to be there."

Waldrop predicts increased demand for healthy food and information about food nutrition. "Convenience will continue to be a driver, as we all lead busy lives," he adds. "As consumers become more educated, there is increased demand for more variety."