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market-farming - RE: [Market-farming] charging what the market will bear

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Subject: Market Farming

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Chronological Thread  
  • From: "jay gee" <jgj23 AT mindspring.com>
  • To: "market-farming AT lists.ibiblio.org" <market-farming AT lists.ibiblio.org>
  • Subject: RE: [Market-farming] charging what the market will bear
  • Date: Tue, 04 Feb 2003 13:55:59 -0800 (PST)

Rick Williams wrote:

>Which goes to show that niche markets are no different than "conventional"
>markets in that the lowest price does dilute the overall price. Hopefully
>not too much;)

The lowest price only dilutes the average price when
all prices are studied after the fact.

One example does the job. AUTOS.

When Yugo introduced their vehicles into
the U.S., Mercedes Benz did not lower prices,
nor did Lexus, Cadillac and other luxury makes.

If you grow tomatoes, you can grow the best
tomatoes in the county, but, unless you market
them as "The Best Tomatoes in the County"
and give out free samples to demonstrate you
are telling the truth, you probably can't charge
much more than the farmer in the next stand
with equally attractive tomatoes.

>We definitely see this with beef producers. Most of the beef in the U.S. is
>initially raised on small farms. The typical beef operation is perhaps 50
>cows.

When beef is sold at auction, all prices are lowered.
Beef is a commodity and the buyers have the best
information (they know what they are willing to pay).

When there are few buyers in the marketplace
(as there are now with giant packing plants) the
ability of a farmer to get more for quality is reduced.

High quality is more easily sold directly to an end
user than to a wholesaler, especially when that
wholesaler has no real market for "quality."

If you want to sell your beef for a higher price,
find customer who need and want high quality
because it provides them with a competitive
advantage in the market(s) where they compete.

Examples are restaurants, specialty meat packers,
processed food producers, etc.


Jay Gee
not a farmer - but interested in farming





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