Sunday, September 26, 2010

New Markets??

As I look forward to the long hours and near madness of seeding wheat starting this week, I also think about how to market it. With much debate and interest in local/regional food the question I find myself asking is, "How can I take advantage of marketing it to bakeries and restaurants in Kansas City and Wichita as flour?"

Normally we sell all of it, except for a small portion that's kept for seed, as a commodity to either our local grain elevator, which in turns markets it to a multinational grain company, or we haul it directly to the multinational ourselves. Multinational companies offer many advantages such as a variety of forward contracts that allow us to capture potentially favorable prices and peace of mind of getting paid timely .

On the other hand a small flour mill offers the opportunity to market the grain as a finished product to bakeries, restaurants, and the public that want closer contact to the farmers that produced it. A small flour mill is another opportunity to add a few needed jobs in rural America, it won't provide enough jobs to stop the out migration though. The potential downside is a small mill could be slow paying and lack the economies of scale for longevity even when charging a premium price.

Shepard's Grain is an excellent example of a group of farmers in the Pacific Northwest working with an ADM flour mill to develop flour products to their specifications and then marketing the flour to bakeries, delis and other commercial wheat flour users. Using a cost plus pricing system creates a very transparent pricing scheme and rely on farmer owners to help with promotion allowing end users to meet the farmer owners. Mid-scale food value chains case study: Shepherd’s Grain gives a detailed look at how Shepard's Grain works.


Owd Fred said...

Tom ,
I know I am the other side of “the pond” from you, (and a bit long in the tooth [old]) but you could buy a small scale stone mill to grind your own flour, that way you could market it fresh as required. Do you have Farmers Markets that sell direct to the public out in USA?.


Mel said...

Hi Tom,

I know I'm quite late to this conversation - just found you via @NYFarmer on Twitter - but I would add that I live in Kansas City and have been looking (not very hard though) for a source for local Kansas wheat. I'd really like to buy organic, not wanting pesticides and scared to death of GMO. I would definitely buy from a farmer's market, or even order ahead. I'd also buy wheat berries to make it more convenient and toss them in a Magic Mill myself. Of course, if you milled it, I'd buy that so long as I could purchase it regularly. I think restaurants would be interested too - the bugger is having to pitch each one individually. Maybe give Paris Brothers a call (KCMO) and see if they'd distribute for you?