Latest articles

Seeing the value of your farm beyond beef and grain

There may not be an immediate cash market for tranquility, but the day is coming

It is definitely catalogue season. Based on past purchases and connections through work I generally receive around 150 to 200 bull sale catalogues each year, as well as lots of general farm supply and auction catalogues.

All of this glossiness has spurred a lot of thinking about the products we sell from our farms and ranches. Most of us are well aware of our calves or bulls or bred heifers that are for sale. Some of our farms are also well aware of the bin of canola or wheat that is ready to go to town. These are all products that may generate cash in a direct way and it is important to pay attention to them.

These traditional items are not the only things that our farms and ranches produce and interest in nontraditional products is growing, as well as the willingness of members of the public to pay. Probably the best-known example at present is the carbon credit market. This market makes payment to farmers who use no-till technology to sequester carbon — a major component in greenhouse gases — from the air into the soil profile. While the carbon marketplace has a way to go in terms of paying for grassland and its highly effective carbon sink, this is an emerging trend. Carbon sequestration is a nontraditional product with a lot of public awareness. It is even possible for travellers to buy offsetting carbon credits when they book a flight.

Nontraditional products

The example of the carbon market is actually a component of a larger group of services that farmers and ranchers can provide with their land base, ecological goods and services (EG&S) — things that are produced on the landscape through co-operation with nature that benefit the public. Traditionally these products have a huge monetary impact (think trillions of dollars) and a limited marketplace. For example, there is no cash market for clean water or filtering of runoff into rivers that provide drinking water for cities, yet this has a huge impact on the public at large. Another good example is wildlife habitat. There is not a large or easily accessible cash market for creating habitat and encouraging wildlife but there are tremendous benefits to the public including maintaining biodiversity, benefits to the tourism industry and pollination among others.

There are a lot of ways to sell these nontraditional products. As previously mentioned the carbon credit market is perhaps the easiest example as it has an established trading system although it lacks a real grassland component. Some enterprising folks market food that commands a premium using these environmental attributes to extract value out of the marketplace. Indirectly this is marketing EG&S and the public is paying for it, whether they are aware of it or not. Probably the most famous example of this would be the Whole Foods marketplace, a chain of upscale groceries that has seen tremendous market growth in the last decade or so. Smaller examples could include the local food movement and the growth in farmer’s markets.

Other ways that producers are marketing nontraditional products are through experiential tourism. This is the fastest growing trend in tourism and it has evolved because people want the real experience of the place they are visiting. Examples could be on-farm bed and breakfasts, working vacations, guided hunting and artist retreats. While not for everyone, this is a way that farms and ranches are selling values, solitude, scenery and experiences to the public. These are definitely not traditional products for a farm and ranch and yet nearly 100 per cent of the farms and ranches I have ever visited have at least some or even a multitude of these products.

Be part of the discussion

There are several efforts ongoing at the moment to develop a formal marketplace for some of these nontraditional products, particularly in the arena of environmental goods and services. This is important to be aware of for a couple of reasons.

One reason is that EG&S are generally considered “green” under our World Trade Organization rules. Many of our global competitors provide funding to farmers to provide EG&S in place of subsidies for production and this is allowed under the rules of trade. This affects pricing and production on a global scale. Another, and I believe more important reason, is that the public is demanding these types of products. Politicians and businesses alike are well aware of this and are currently struggling with how to go about providing and marketing services and products produced by the farmers and ranchers across the landscape. If we are not engaged in the conversation as producers we run the risk of having our product and production dictated to us as well as having no say in how that marketplace is designed. This has the possibility of turning a potentially massive marketable product into a liability.

Another prime reason for awareness in this era with “sustainability” as a buzzword is that our ability to verify our practices and engage in the marketplace could be a major financial boost to a farm’s bottom line. As larger players become involved many of these markets may be formalized similar to the way that the carbon market has been developed. We need to stay on top of this as producers and also work to verify our own production practices.

One of the primary rules of marketing is to know your product. The next time you are out walking around your farm or driving through your country neighbourhood, take a deep breath of fresh air, look at the scenery, the individual plants and animals and consider all of the products you produce on your farm. You may find some stuff for sale that you never knew was there.

About the author

Contributor

Sean McGrath is a rancher and consultant from Vermilion, Alta. He can be reached at [email protected] or (780) 853- 9673. For additional information visit www.ranchingsystems.com.

explore

Stories from our other publications

Comments