Building a Bigger Commodities Industry through Marketing

This week, on October 12, the U.S. celebrated an unofficial holiday called National Farmers Day. Previously known as Old Farmers Day, many companies and towns use this day to celebrate the hard-working farmers that grow the food found in our grocery stories.

Agriculture is a large part of American history. Automaker Dodge captured our agricultural roots and nostalgic feelings toward the industry in a 2013 Superbowl commercial for its Ram trucks. Farming remains an important industry in our economy today, especially throughout middle America. Agriculture and agriculture-related industries contributed $789 billion to the U.S. gross domestic product (GDP) in 2013. In the same year, 16.9 million full- and part-time jobs were related to agriculture, which equates to 9.2% of total U.S. employment. Direct farm employment alone accounted for 2.6 million jobs in America. That’s a lot of people involved in helping put food on your plate!

Agriculture is no longer simply a means of keeping the population alive. It’s turned into a commodities market. Before, farmers were at the whim of the customer, who set the price of the product. Now, it’s a production-driven market and farmers/producers have more control over the price of their product. We’ve evolved from a price-taking to a price-making agricultural model. How? Marketing.

Marketing has been a game-changer for the agricultural industry. Consider organic produce, for example. As more information reaches the public through media, advertising and other marketing channels, more consumers are becoming aware of the benefits of organic products. This creates a collective brand image that organic is a premium product. In turn, consumers are willing to pay more for an organic product than a conventionally grown one. The producer, then, is able to set a higher price for the organic product.

Another way to understand how good marketing can drive a price of a commodities is to take a look at the jewelry market. A diamond of high quality may be worth a certain price anywhere. But when it comes in a special blue box with a white satin ribbon, Tiffany’s is able to ask an even higher price for that same diamond.

As the commodities industry grows, and consumers continue to seek more information on the items they purchase and consume, marketing will play an even more important role to individual brands. Produce companies need to continue to work to set themselves apart from other commodities. Agriculture is a booming business, especially considering the world’s population will rise to 9 billion by 2050.

Oster and Associates has long had a niche in marketing commodities. Grapes, gooseberries, tomatoes, strawberries, bananas, peppers and more, we’ve had a hand in all sorts of produce brands and growers. We understand the myriad of ways to gain a share of and grow your presence within the commodity market. This week, our hats are off to the hardworking farmers in the United States and globally. And, whether you’re selling produce, popcorn, poultry or any other product, we’re here to help market your commodity.