Opportunities for Entrepreneurs in Agriculture

Building An Entrepreneur Friendly Community

The Need for Integrated Entrepreneurs in Agriculture

• Farmers historically have been production entrepreneurs producing a commodity

• Other entrepreneurs have added value to these commodities

The Need for Integrated Entrepreneurs in Agriculture

• The result has been a decrease in the amount of food expenditures which go to the farmer:

1900 – 65 cents

1960 – 40 cents

1980 – 37 cents

1992 – 23 cents

2003 – 16 cents

How Can Farmers Become Integrated Entrepreneurs?

1. Add value to commodity produced2. Market directly to consumer3. Alternative enterprises4. Niche markets5. Sell experience (the sizzle)6. Brand your product7. Sell service, management, or

convenience

Why Should Farmers Become Integrated Entrepreneurs?

1.Add value to product you produce

(Name of County) County hog producer:

-Sell fat hogs at sale barn:

260 lbs. X .50/lb = $130 gross

Why Should Farmers Become Integrated Entrepreneurs?

(Name of County) County hog producer:

-Direct market freezer pork to consumers at farmers markets

195 lbs. pork X $1.49/lb = $290.55 gross

Why Should Farmers Become Integrated Entrepreneurs?

(Name of County) County hog producer:

-Add value & sell service

Bill’s BBQ Service sells roasted pork

260 lb. hog = 75 lbs. roasted pork

75 lbs X $6 per pound = $450 gross

Which Would you Choose?

• (Name of County) County hog producer:

- $132.50

- $290.55

- $450.00

How Can Farmers Become Integrated Entrepreneurs?

2. Market directly to consumers-farmers markets-roadside and farm stands-CSA-festivals & community events-online sales-subscriptions and orders-many more!

How Can Farmers Become Integrated Entrepreneurs?

Why direct market?

Wholesale markets pay farmers 16 cents of every dollar consumer spends on food

Direct markets pay farmers more than 95 cents of every dollar consumer spends on food

How Can Farmers Become Integrated Entrepreneurs?

3. Alternative enterprises

Unlimited opportunities in a state of 11 million residents

How Can Farmers Become Integrated Entrepreneurs?

4. Niche markets

Niche doesn’t mean small

Millions of niches in a state of 11 million!

How Can Farmers Become Integrated Entrepreneurs?

5. Sell experiences-farm tours-pick-your-own-corn mazes-hay rides-vineyard/winery-farm vacation, dude ranch, etc.-lots more

How Can Farmers Become Integrated Entrepreneurs?

6. Brand your product

How Can Farmers Become Integrated Entrepreneurs?

Progression of economic value w/ branding:

Coffee grower commodity$1.25/lb

Kroger product $6.00/lb

McDonalds service $25/lb

Starbucks experience $50/lb

How Can Farmers Become Integrated Entrepreneurs?

7. Sell service, management, or convenience

-Horse boarding

-Contract raising of heifers

-Custom farming

Supporting Integrated Entrepreneurs in Agriculture

• Infrastructure• Networks• Capital• Education

Supporting Integrated Entrepreneurs in Agriculture

• Infrastructure:

-Production infrastructure

-Processing infrastructure

-Marketing infrastructure

-Infrastructure infrastructure!

Supporting Integrated Entrepreneurs in Agriculture

• Networks for production, processing, marketing:

-Co-ops

-Kitchen or business incubator

-Farmers markets

-Commodity groups

-Chambers of Commerce/trade groups

-Others

Supporting Integrated Entrepreneurs in Agriculture

• Capital:-Revolving loan funds-Low interest loans-Micro loans-Venture capital funds-Grant funds-Special programs i.e., Tobacco funds

Supporting Integrated Agricultural Entrepreneurs

• Education:

-Production topics

-Business management

Contact Information

Put your name and affiliation on this slide. Please also give credit to author and Ohio State University Extension

Adapted from an original presentation created by:Mike Hogan, Associate ProfessorOhio State University Extension

October 2008