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Marketing How agricultural products
are being sold is changing. The once open market is now controlled
by a small number of conglomerates. Consumers tastes are also changing.
They are becoming increasingly time conscious, health conscious, and
ethnically diverse, which is affecting food demand. That, in turn,
affects how food is produced and marketed. Farmers and ranchers are
concerned that concentrated input sellers are able to charge more
for seed and feed. Concentrated buyers may lower prices that will
leave farmers and ranchers squeezed between higher input costs and
lower commodity prices. Small producers are particularly
concerned. Contractual arrangements used by larger buyers and sellers
may limit market outlets for the smaller independent producers, reducing
their ability to compete. Another aspect is that trading on the open
spot market may become more volatile when spot market prices are based
on fewer trades. Finally, small producers may be subject to price
discrimination if quality premiums in contractual arrangements are
not made publicly available. Concentration and Structural Change in U.S. Agriculture, October 1, 1999 USDA Economic Research Service Concentration in the
market Concern is growing over
the impact of the rapid increase in market concentration in agriculture.
Agricultural markets used to be characterized by large numbers of
buyers and sellers trading commodities on the open market. Today a
smaller number of firms control a greater portion of the sales and
purchases in all aspects of agriculture. Consolidation has been happening
in the meat packing industry, grain processing, agri-chemicals, railroads,
and the seed industry. The National Small Farm Commission has recommended
USDA
Economic Research Service Alternative Markets Producers may want to consider
alternative crop and livestock market possibilities to capture additional
profit. Possibilities include:
For more information see the NDSU Extension Service article at www.ext.nodak.edu/extpubs/agecon/market/ec1140w.htm |