Value-added agriculture helps recreate products
March 1, 2005
Marketing is key to selling any product.
This has been the driving idea behind finding an alternate way for people involved in agriculture to adopt new methods of making their products more appealing to consumers.
The marketing strategy, value-added agriculture, has been helping farmers deal with rising daily expenses associated with modern agriculture.
“Value-added agriculture is recreating a product in a new way,” said Craig Tordsen, extension specialist for value-added agriculture.
Tordsen said farmers struggling to pay bills who look for other methods of income on their farm may decide to begin producing value-added products.
“There are a lot of opportunities for people to get into to be extremely profitable,” Tordsen.
Ethanol plants, biodiesel fuel, wineries and power candy bars are all forms of value-added products, Tordsen said.
He also said Subway uses value-added products, like turkey meat, which comes from a state-of-the-art plant in Mount Pleasant. Employees at the plant must take a food safety course supervised by Iowa State.
Tordsen said value-added agriculture is a different train of thought for farmers, who are used to a commodity system of marketing.
He said farmers need to find what the needs are for consumers who purchase these niche-market products.
Apple cinnamon ice cream and creamline milk are two value-added products sold by Picket Fence Creamery, which offers fresh products locally and makes a larger profit than it was as a traditional dairy farm.
“Our goal was to provide customers in the area with fresh and wholesome milk products,” said Jill Burkhart, co-owner of Picket Fence Creamery in Woodward.
Picket Fence Creamery was established in October 2003, after the Burkharts decided they needed to either sell their dairy herd or try something new to make their dairy farm profitable.
Burkhart said they started reading articles and consulted Iowa State about possible alternatives to commodity milk prices. She said after she and her husband, Jeff, visited an on-farm milk bottling plant near Fairfield, they developed a strong interest in starting their own creamery.
“It looked like something that we wanted to try,” she said. “We drove away and talked about it the whole way home.”
Today, the Burkharts produce value-added dairy products and meat. They sell products in their on-farm store and numerous other stores and restaurants in the Des Moines and Ames communities. Hy-Vee and Aunt Maude’s, 547 Main St., are two businesses in Ames that carry Picket Fence Creamery products.
Burkhart said customers purchase milk at Picket Fence Creamery because the milk is 100 percent natural, with no artificial hormones.
Tordsen said because of the fear of products not being natural, a share of the market is for products not genetically modified.
Another reason consumers purchase value-added products is the desire to support locally grown products.
“People like to support your local people,” said Scott Pederson, dairy manager of Hy-Vee, 3800 W. Lincoln Way, which carries Picket Fence Creamery products.
He said Hy-Vee sells Picket Fence Creamery milk because it is a local item and it likes supporting local producers.
“You know exactly where the products are coming from,” said Pederson.
Emily Miller, junior in dairy science, helps Picket Fence Creamery along with other students in her Marketing 491X, Marketing Experiential Learning, class. The class focuses on marketing locally grown agricultural products.
Burkhart said many people buy her products because they are not homogenized and they are looking for less processed foods. She also said there are challenges that come along with the production of value-added products.
“You have to reach the consumer that’s interested,” she said. “It has different characteristics of commodity milk.”
She said the target audience for value-added milk products is only 1 to 4 percent of the consumers in the area.
Tordsen said attracting the first customers and getting them to repeat is a struggle.
The higher price of value-added products has been a challenge for marketers. Miller said college students are not always willing to pay more for natural products.
College students are pressed for time and are more likely to purchase the cheaper, commodity food products, Tordsen said.