Forming an Agriculture Alliance
One of the newest trends in marketing agriculture is called alliances.
All kinds of companies have been forming alliances whether it is the telecommunications industry or manufacturing. Agriculture has not been left out. Cattle producers now have the option to join alliances. Though with many to choose from and the uncertainty of these new partners, it can be a difficult decision for our operators.
The beef industry has a lot to gain from strategic alliances. The industry is composed of four or five levels loosely joined by markets. Traditionally, this hasn't worked too badly. But with the need to develop much improved products demanded by today's consumers, there is pressure to change the system.
Consumers are asking for new products like micro-wave ready meals. To get these products on the shelves, we have to start at the brood-cow level.
Different alliances have different targets. There are some alliances whose target is to deliver traditional, high-quality beef. Some of these are Farm Land, U.S. Premium Beef, which is a cooperative, and Certified Angus Beef, which is one of the most well-known in the country. Others have targeted consumers interested in lean and/or natural beef. Laura's Lean Beef, based here in Kentucky, has been one of the most successful in this area. The bottom line is that these alliances can help communicate needs and reward farmers too. For example, to produce beef for Laura's Lean Beef the right breed must be selected and no anti-biotics used. For U.S. Premium Beef, black cattle of certain genetics should be selected.
For the marketing person's perspective, one of the unique characteristics is the big changes from adversarial marketing, which is win/lose, to collaborative marketing, where both sides can win. This type of marketing is built on relationships.
Alliances are not for every Kentucky cattle producer. They're for the producers who are really interested in making changes. The changes needed to capture higher incomes. Fortunately, size doesn't matter. Most alliances will work with smaller producers.
Producers considering joining an alliance should learn about cost, length of commitment, help and assistance, information feedback, source of premiums. It takes all this information to come to a bottom line decision. In terms of what is best for the operation. One of the most critical aspects is feeding the information back. Can they help you improve your operation?
A great opportunity, however, is for Kentucky producers to join together and create their own group or cooperative alliance. Several of these have already gotten started. Most are focusing on group marketing and health programs.
For More Information
For additional information, please contact, Lee Meyer.