Are Alternative Agricultural Markets Right for You?
Posted February 2000
The year 2000 began with some of the lowest commodity prices we’ve seen in decades. These depressed prices are making for difficult times in Wisconsin agriculture, and many farmers are re-examining their goals for their operations.
Increasingly, growers are looking at alternative crops, farm enterprises such as bed and breakfasts and tourism, and other business diversification strategies to improve their farm profits and the quality of their lives.
Alternate crops have received a lot of attention lately. Goldenseal, Echinacea (coneflower), garlic, shiitake mushrooms, and aquaculture are a few alternatives that have been in the spotlight the past few months because of the decline in commodity prices.
This attention has provided valuable information for farmers, and also a great deal of hype. It is important to look at whether or not these alternatives will work for your farm and family.
“Are these crops, and all crops like these, something that could generate positive returns? We’d have to answer that with an astounding ‘maybe!'” says Don Schuster, project economist for the Center for Integrated Agricultural Systems at the University of Wisconsin-Madison.
“For those just getting in to alternative markets, it is important to recognize that a lot of information out there is little more than hype. It is your job as a potential grower to learn how to distinguish between meaningful information and what is just trying to lure you into an alternative crop,” says John Hendrickson, outreach specialist for CIAS.
Mike Drilias, tobacco and ginseng specialist at the UW-Madison, advises farmers to know their markets. Drilias has looked at goldenseal as an alternative to ginseng. He points out that buyers for goldenseal and other herbal medicinal crops often demand organic certification, which might require major changes for ginseng growers.
Do as much research as possible before starting an alternative enterprise. “A few hundred dollars spent researching an alternative crop will pay for itself. This research can also save you from deciding to pursue something that isn’t worth your time and investment,” says Hendrickson. This research should include contacting growers and buyers of potential alternative crops for your operation.
“Some markets can become saturated very quickly,” Schuster points out. Growers should know where their buyers are and how much product is needed.
Farmers need to carefully consider the price volatility of many alternative crops. This volatility can be handled in a number of ways. Farmers can carve out a unique market niche, or diversify with other crops so that low prices for one crop can be offset by high prices for another crop.
Despite the need for caution, many farmers are successfully growing and marketing alternative crops. Before making this switch, you should be able to answer several important questions:
- Does the crop meet my long-term goals for my farm and family?
- Do I have the research and marketing skills to sell the crop?
- Does my farm have the right type of soil and climate to meet growing requirements?
- Can I meet standards for this crop, such as organic certification?
- Can I provide the required labor management?
- Do I have, or can I afford, the facilities and equipment requirements for the crop?
- Does this crop fit in well with my other farming enterprises?
- Does this crop have a strong potential to meet my financial goals, including level and timing of returns?
Grower networks can take some of the risk out of alternative crops. Together, farmers can quickly work the kinks out of production systems and, in some cases, secure markets through a cooperative marketing arrangement.
Some very good sources of information on specific alternative crops include Appropriate Technology Transfer for Rural Areas: (800) 346-9140; DATCP Farm Center: (800) 942-2474; the Center for Integrated Agricultural Systems: (608) 262-5200; and the UW-Extension Emerging Ag Markets web page: www.uwex.edu/ces/agmarkets
Alternative crops can be very profitable for some farmers. For other farmers, the alternative markets can prove time-consuming and costly. Do your homework before jumping into any of these new crops. Alternative markets can provide profits and excitement if a person does not go to them blindly.
For more information about alternative crops, please call CIAS, (608) 262-5200; or e-mail Don Schuster at email@example.com