John Nalivka: Consumer education – it’s time to be proactive!
July 30, 2015
As business owners, ranchers control their destiny – right? There are probably many responses, but for the most part, ranchers and farmers would probably say yes, at least regarding lifestyle, working with livestock, and production decisions. The biggest obstacles to achieving your business goals have generally been weather and bankers and if you graze cattle on Federal lands in the western U.S., you likely added the BLM and Forest Service to that list. But, all in all, ranchers have dealt head-on with the uncertainties and those things that concerned them directly and built a sustainable (long-term profitable) business. But over the last few years, the impediments to building and maintaining that sustainable business have only increased. Ultimately, as that list of impediments driven by legislation, regulation, and taxation grows, so does your ability as a business owner to control your destiny.
One part of your business that has always been under your control is the marketing of your product – cattle or beef. Sure, to some extent, you have been a price-taker, but you had the control of most of the production and marketing variables leading to the time you actually marketed your cattle. To some extent, you controlled the price you received by managing those variables, i.e. breed of cattle you raise, genetics, when to sell, what weight to sell at, what market to sell through. In fact, buyers began paying premiums if you were willing to comply with various marketing protocol – source verified, natural, organic, best practices, quality assurance, humane handling, etc. Consumers want something, you are willing and able to comply, and consequently, you receive a premium. The competitive market works – get paid for what you do and become more efficient.
Now, let's think outside of the box for a minute (I don't necessarily like that phrase, but I couldn't think of a better one). The beef industry is becoming increasingly defined by the market protocol that I just listed in the previous paragraph and controlled by others. In fact, the protocol can now be expressed with one all-encompassing term – sustainable. What happens if those marketing protocol defining something that you have always done as a "good business practice" and in fact were paid a premium for, suddenly becomes mandatory? Simply put, the game changes. Voluntary oversight becomes mandatory oversight. Does that sound familiar? The best strategy to avoid this scenario is to actively educate customers and advocate what you do and how you do it. Keep the ball in your court.