Thinking outside the product

The opportunities for farmers in Australia are only bound by imagination, will and capacity

THE times are changing in agriculture - around the world, not just in Australia - and our farming practices have to keep up with that changing culture if we're to successfully adapt our businesses.

“Our farming business has never been so close to the consumer as it is now, we find most of the decisions we’re making are with them in mind.”

I heard this from two different farmers at Sheepvention in Victoria a fortnight ago, one was a lamb producer and the other a wool grower. The wool grower went so far as to say: “If I was sitting at a café in Paris wearing a beautiful jacket made from Australian wool, and someone showed me a picture of freshly mulesed lamb and said, ‘to wear that jacket you have to be ok with this’, I wouldn’t be impressed - and I’m not expecting consumers to condone that anymore.” He dropped the practice years ago and is having great success after changing his management along with his thinking.

One thing these two farmers and many others have in common, is that they’ve hopped off that rickety road of commodity production and have found great fulfillment, success and influence through shifting their minds, businesses and produce.

They’ve realized there's really "no such thing as a commodity product, only commodity thinking".

It’s a phrase that may raise the hairs on the necks of many in Australian agriculture, but one that is universal across many sectors around the world. That "commodity" quote comes from Tom Asacker, a US-based writer, author and innovator who also said: “We all become the stories we tell ourselves,” which is far more broad but addresses the same causation.

Commodity thinking may be likened to a narrowing of the business mind and clouding strategic focus. When coupled with high production costs it makes for a rather frustrating place to be in, but it’s a result that comes from choice, indirectly no doubt, but chosen all the same.

Characteristics of a commodity thinker would include gaining a competitive advantage through a low cost of production. Desired margins are created by lowering inputs and there’s a huge focus on maximising output through production efficiencies that may come at any cost. There’s also minimal links between them and the end consumer along with little to no collaboration at other levels of the supply chain. The spicy bit comes as we add animals into this equation and can start to see where external concern is being raised and breeches in transparency are costly.

The compromise to business, returns, morale - not to mention the industry - because of this thinking is be huge, you don’t have to look too far to see how it’s affecting us now.

Australia is blessed with an environment, image, location and demographic that affords a great opportunity to ditch commodity thinking and allows the choice to think differently. Call it what you will - value adding, vertical integration or value chain thinking - the opportunities for farmers and those in Australian agriculture are only bound by imagination, willingness and capacity.

“Value chain thinkers” are able to produce and create additional value for their customers and consumers fed by a detailed understanding of the end needs. It also means that being actively involved in the supply chain gives an increased understanding of cost structures, profit margins and other components associated with their product. Characteristics of value chain thinking may include closer links between them and their end consumer, co-ordination of systems between farmgate and plate or shop. These thinkers develop products that meet demand, solve issues creatively and view consumers almost as colleagues.

It’s not everyone’s cup of tea, but choosing to think differently and enjoy the rewards that can follow does sound sweeter than being stuck in between those proverbial rocks and hard places.

Sam Trethewey

Sam Trethewey

grew up farming down south and now commentates on agriculture across Australia
Date: Newest first | Oldest first


19/08/2014 7:04:45 AM

Their will always be niches, and anyone who can find one will do well. (adding value usually means adding cost, so you have to very careful you don't add more cost then value) However not everyone can be in the same niche (because then it's no longer a niche) When everyone is super.... no one is super. Fact is the bulk of farming is commodity production, and that's not going to change, simply because the world needs vast quantise of cheap food.
19/08/2014 7:52:57 AM

Very good point Qlander.
Bushie Bill
19/08/2014 8:22:19 AM

No RARA with an IQ greater than the size of his work boots could disagree with this logic. Australian agriculture has to learn to leave medieval mindsets behind and move into a world which has no particular appreciation of farmers being special people. They are either successful or failed business operators. Which group farmers choose to be in is entirely up to them, exactly as it is with all business operators.
19/08/2014 10:06:05 AM

Nice article Sam. 'The world needs feeding argument’ is at heart of commodity thinking and will never deliver a decent income for Australian farmers. Look at real farm incomes vs population growth, it’s an inverse relationship. Economic growth on the other hand gives consumers' choice, and choice means market segmentation and an opportunity to innovative and apply customer oriented marketing to target the more profitable segments.
Get MuddyTo think clearly in farming and about farming, you need to get muddy - commit, roll up your sleeves and get involved. SAM TRETHEWEY gets stuck into some of the issues facing those on the land.


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