For about 150 years ranchers have been branding their cattle. First, to distinguish them from other ranchers’ cattle and second, to establish and identify a quality product. Modern corporations are also identified by a brand that says to their customers that they offer the quality their customers have come to expect. Many brands can command a premium price because the quality is assured and consistent.
This is evident in corporations from premium food suppliers like Kraft to fast food suppliers like McDonald’s, Pizza Hut or Burger King, or other product suppliers like Coors or Budweiser and, okay, Molson’s. As individuals we may prefer one brand to another but generally we are assured that the quality of the brand will be consistent.
A very significant issue for grain buyers is quality. Not only are there price differentials in quality it also has an effect on the way grain handles manage their facilities and sell to their buyers. Their businesses are based on throughput — a delivery that does not meet their shipping needs can tie up space or place the company at considerable risk of a missed-shipment or having discounts applied to the whole shipment.
However, not all end users want or need top quality. They may have built their own operations around lower quality feed stocks, and built a particular brand that is accepted by the shoppers that eventually consume their products. Other end users have built their brand and processes around top quality feed stocks. These users can command a premium price for their brand and are willing to pay a premium to suppliers who consistently and uniformly supply a premium feed stock. Both processors supply a demand. Though they’re on different ends of the spectrum, it is quality that establishes demand for each brand.
Good business people know that whether they are supplying a product or service or both, they must differentiate themselves from their competition. Their brand may be a level of service, their product quality or their business knowledge, but somehow they have branded themselves; they survive or prosper because their brand is in demand.
Now, let’s apply these principle to your farm. Is your brand in demand by your consumers — the buyers of your production? If not, why not?
Is it because you accidently or intentionally misrepresent the quality of your product? Do you consistently fail to deliver within the terms of the agreement? Do you treat your customer with disdain and disrespect? Have your previous dealings fostered an atmosphere of distrust? Do you consistently feel you are getting less for your product than you deserve? Are you selling into the right market? In other words, does your product match your customers’ demands?
From the Country Guide website: Fearless financing
If you have answered (now be honest) yes to one or more of the questions in the previous paragraph your brand is probably not in high demand and you’re sitting on your production waiting for a better grade, or warmer weather, or you have other things more important than providing quality assurance and service to your customer.
“My customer?” Yes, your customer. Over the past, elevator companies and grain buyers have claimed you as a customer. They’ve bought you hats, taken you out for lunch and bent over backwards to retain your business. Have you noticed a change?
The post-CWB grain trade is not as it was, and it never will be again. Grain companies can no longer charge a guaranteed fee to the Canadian Wheat Board for every tonne of grain they handle. While they may still refer to elevation as a line item charge, it should more accurately be referred to as profit margin.
No longer can you expect a quota or contract call to be announced, assuring you of a delivery opportunity. As Dorothy once said “You’re not in Kansas anymore, Toto” Actually, that is exactly where you are. With the exception of being considerably colder, we have the Kansas model. The grain trade has adopted the U.S. grain trade practices, and why not? With a few exceptions the companies are all U.S. based. Cargill, ADM, Bunge, Louis Dreyfus or owned by other off shore corporations as in, Viterra. The two most prominent Canadian companies are family owned. As farmer-owned terminals are sold off, it is very difficult to even own shares in one of our grain handlers.
Back to branding. You are a farmer, a family business or corporation whose business is to supply agricultural production to consumers. Families who sit down to breakfasts of cheerios or puffed wheat or corn flakes, or cook french fries with canola oil in their deep fryers. Your production is found in breads and baking worldwide, but to get it there you need the services of one of our Prairie grain handlers who clean and blend to provide a consistent product demanded by consumers. These guys, my friends, are really your customers. If your brand is to be accepted and demanded you may want to re-think your relationships. What is your brand? Is it in demand? Why or why not?
Think it over.