Using Marketing Systems to Remain Competitive
Any industry that wants to stay competitive today needs to choose its customers and/or market base and provide a consistent quality product. This business approach applies to food production as well. During a recent district Christian Farmers Association discussion, members generally agreed that for Canadian farmers to remain successful they need to continue to focus on quality of product, not on quantity. This is interesting seeing that many farmers are moving towards volume production to give themselves an edge when it comes to marketing.
A lot of Ontario product is exported around the world because of its quality standards, such as pork, beef and horticultural products. This also makes trade agreements with other countries important for the agricultural industry in Ontario. Each commodity has determined a form of marketing to market its product, and the governments of Canada and Ontario have generally been respectful of the wishes of the commodity.
Over the years, there have been changes to the marketing systems that commodities have used. For example, the Ontario pork industry went from a single-desk selling system to an open marketing system about 10 years ago. Changes to the Canadian Wheat Board opened marketing opportunities for producers to sell independently. Sometimes it’s messy, but producers can shape systems that work for their commodity.
Many of these systems access global trade opportunities. On the other hand, we also have commodities that have identified their market and limit production to meet demand but not exceed it; these commodities generally do not deal with exports. In Canada, this is called Supply Management. The dairy and feather industries use this marketing tool and have been successful with it.
Last week, the Dairy Farmers of Ontario held their annual meeting, which the CFFO attended as well. One of the speakers was a dairy producer from Wisconsin. He suggested that the Canadian system is a good system and is not the cause for troubles in Wisconsin’s dairy sector. They recognize the advantage of controlling the supply of a perishable product.
There is a lot of optimism in the Ontario dairy industry. Supply management is not considered to be one of the stumbling blocks of the current NAFTA talks. And with new products and new processing investments, the near future looks bright for dairy farmers.
One item of discussion, however, was the fact that many farmers were not able to fill their allotted quota. Most have received an increase in the amount of quota and are wondering what their next move should be. Their barns are full, and they are not able to handle the extra animals needed to meet the extra quota.
Next week, the CFFO will hold a meeting of its members-only Supply Management Committee. The Committee will be meeting to discuss current issues for supply management across all sectors, such as ways to encourage new entrants and ways to move forward in today’s market. As the only remaining jurisdiction that uses supply management as a market control system, both the dairy and feather industries will need to adjust their system to maintain public and government support.