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COVID-19 Updates: Taking steps to return to normal.
A study of northeast Nebraska farms found that historically 80% of producers consistently received prices in the bottom one-third of the yearly price range for their crops. The same northeast Nebraska study found that 75% of the increased profit on study farms could be made through improved marketing efficiency, while profit increases of only 25% could be made through increased production.
The Nebraska study results, though not directly applicable to Alberta, give an idea of the improvement that can be made in farm incomes without counting on farm product price increases or increasing farm inputs. Marketing clubs offer a good way for producers to improve their marketing skills. Very successful clubs in the United States and western Canada rely on the idea of exchanging help with neighbours, much like in the old days of barn raisings and threshing crews. It is the pooling and sharing of this marketing talent through planned activities that results in better farm income.
Successful clubs talk over member's marketing problems and look for solutions. Members compare strategies and learn about various marketing techniques, tips and ‘lingo’ discovered through personal experience. Many people have picked up useful marketing ideas from the school of hard knocks.
Successful clubs invite guest speakers or specialists from the grain or livestock industry, commodity markets or banks to help understand more complicated subjects. Making use of conference calls or webinars saves time and money for presenters and the club members.
A survey in 1998 of 170 members of 13 marketing clubs in Alberta found that the main benefits of belonging to a marketing club, in decreasing order of importance were:
Clubs may either be formally organized with a chairperson, executive and club dues, or operate informally with no structure to keep things on track. Experience shows that more formal clubs with a chairperson and small executive last longer and take the subject more seriously.
Successful clubs are often made up of more than farmers. They often include agricultural lenders and other agribusiness people.
Successful clubs meet regularly. Many meet for breakfast meetings, sometimes as often as twice a month, year around, especially in the first year or two. They feel that marketing is a year round activity and they cannot afford to get behind in knowing what is happening.
Nebraska and Alberta clubs have found that without specified goals and organization, a club doesn't last long.
Successful clubs usually set 6 goals:
Nebraska and Alberta experience show that marketing clubs usually follow 4 stages over roughly 4 years.
Year 1: watching the markets
Year 2: learning when to pull the marketing trigger
Year 3: sharpening skills
Year 4: new goals and tasks
These stages are suggestions and each club may take an entirely different approach.
The first Nebraska marketing club drew up a list of rules of membership. Other clubs have generally adopted these rules.
Members of successful marketing clubs in Alberta and Nebraska make these recommendations about prospective club members:
Membership in a serious, successful marketing club can be a way to improve farm income. Members of successful Alberta clubs have found the investment in time pays back handsomely. Club members generally make better marketing decisions. A marketing club is a long-term project that requires a time commitment to organize and remain active. Time limitations may spell doom for an otherwise useful club if the membership depends on outside persons, like grain buyers or lenders, to keep things going. Clubs that have remained active over the long term are member organized and run. For those reasons it is wise to encourage club members to run their own affairs with assistance provided by others when it is needed.
Marketing clubs can be a useful way to discuss strategies and opinions on commodity markets.
Regular meetings enable producers to exchange ideas that have been acquired through individual experiences.
Effective marketing clubs follow a list of rules in order to keep the group focused.
Participation in a marketing club can be a way to improve farm incomes.