1. Department of Agricultural Economics Organic Marketing Study Overview By Simon Weseen

2. Purpose and Objectives Purpose Purpose Profile 4 commodities as they move from producer to end consumer (wheat, lentils, oats, flax) Profile 4 commodities as they move from producer to end consumer (wheat, lentils, oats, flax) Objectives Objectives Provide a description of the vertical supply chain Provide a description of the vertical supply chain Identify issues and opportunities for the marketing of these commodities Identify issues and opportunities for the marketing of these commodities Determine if there are opportunities for the gov’t to facilitate industry development (e.g. provide information) Determine if there are opportunities for the gov’t to facilitate industry development (e.g. provide information) Provide new producers with basic marketing information Provide new producers with basic marketing information Identify opportunities for further research Identify opportunities for further research

3. Need for Marketing Study Few studies in the area of organic marketing Few studies in the area of organic marketing Thompson (2001) examined feed markets in Europe and the US Thompson (2001) examined feed markets in Europe and the US Alberta Food and Rural Development (2001) profiled an organic grain and oilseed enterprise Alberta Food and Rural Development (2001) profiled an organic grain and oilseed enterprise Neither study attempted to understand the entire supply chain for non-feed commodities Neither study attempted to understand the entire supply chain for non-feed commodities

4. Need for Study cont’d The organic industry is rapidly expanding and is now entering mainstream markets The organic industry is rapidly expanding and is now entering mainstream markets New marketing information required New marketing information required New entrants into the industry may require information about organic markets New entrants into the industry may require information about organic markets

5. Examples of Issues/Opportunities Why does Saskatchewan export raw commodities and import finished goods? Why does Saskatchewan export raw commodities and import finished goods? How can local processors develop relationships with local retailers? How can local processors develop relationships with local retailers? Is there a lack of marketing information available to producers? Is there a lack of marketing information available to producers? Are producers, marketers, processors and certifiers satisfied with the relationships that they have with each other? Are producers, marketers, processors and certifiers satisfied with the relationships that they have with each other?

6. Issues and Opportunities Cont’d What types of end products are produced from commodities grown on the Prairies? What types of end products are produced from commodities grown on the Prairies? How do producers and other industry groups perceive regulation? How do producers and other industry groups perceive regulation? How can producers maximize their returns? How can producers maximize their returns?

7. Approach to Study Survey’s conducted on 4 major groups Survey’s conducted on 4 major groups Producers, marketers, processors, and wholesaler/retailers Producers, marketers, processors, and wholesaler/retailers “Mirror Image” approach “Mirror Image” approach Interviewees are asked the same questions Interviewees are asked the same questions Can determine if all industry participants perceive the same problems and opportunities Can determine if all industry participants perceive the same problems and opportunities Can make recommendations to industry based on results Can make recommendations to industry based on results

8. Approach Example Example Marketers indicate that they are providing producers with all information required to sell a crop Marketers indicate that they are providing producers with all information required to sell a crop In contrast, producers indicate that they need more information to sell e.g. time to sell, what to grow, etc In contrast, producers indicate that they need more information to sell e.g. time to sell, what to grow, etc Result: Result: Marketer loses producer as potential client Marketer loses producer as potential client Producer loses potentially valuable marketing opportunity Producer loses potentially valuable marketing opportunity Potential Recommendation: Potential Recommendation: Marketers can keep producers happy by providing additional information Marketers can keep producers happy by providing additional information Lobby gov’t to provide additional marketing information Lobby gov’t to provide additional marketing information

9. Preliminary Results Results will be presented in a series of short industry papers Results will be presented in a series of short industry papers Current Results are based only on producer survey Current Results are based only on producer survey

10. Analysis of Organic Wheat Buyers in Saskatchewan: A Vertical Coordination Approach Analysis of Organic Wheat Buyers in Saskatchewan: A Vertical Coordination Approach  Examines the type of marketing arrangements that offer producers the highest return on wheat  Conclusions  There are significant differences in farm price and marketing costs under alternative marketing arrangements  Producer owned marketing firms were found to generate the highest profit per tonne for producers

11. Organic Producers’ Perceptions of Their Marketers Organic Producers’ Perceptions of Their Marketers  Examines the perceived importance of various functions performed by marketers  Examines the effectiveness of marketers at carrying out these functions  E.g. advice on timing of sale, what to grow, future market prospects  Conclusions:  Producers were generally pleased with service  Young producers and very large producers were less satisfied with marketing services

12. Organic Producers’ Perceptions of Market Information Availability Organic Producers’ Perceptions of Market Information Availability Examines specific problems that producers may have with marketing their wheat Examines specific problems that producers may have with marketing their wheat E.g. Contracts not honoured, quality and price disputes, can’t find buyers, no market info E.g. Contracts not honoured, quality and price disputes, can’t find buyers, no market info Conclusions: Conclusions: Producers feel that they have much less market information than buyers Producers feel that they have much less market information than buyers There may be a role for public or private market information organization There may be a role for public or private market information organization

13. Organic Producers’ Perceptions of the Role of CBs Organic Producers’ Perceptions of the Role of CBs Examines the importance of various functions performed by certifiers Examines the importance of various functions performed by certifiers Examines the effectiveness of certifiers at performing these functions Examines the effectiveness of certifiers at performing these functions Conclusions Conclusions Producers are divided on the importance, appropriateness and effectiveness of services provided by CBs (e.g. connecting with buyers, research) Producers are divided on the importance, appropriateness and effectiveness of services provided by CBs (e.g. connecting with buyers, research) Less experienced and larger producers are less satisfied with services performed by certifiers Less experienced and larger producers are less satisfied with services performed by certifiers

14. Organic Producers’ Perceptions of Organic Regulation in Canada Organic Producers’ Perceptions of Organic Regulation in Canada Examines producers opinions on regulating the organic industry in Canada Examines producers opinions on regulating the organic industry in Canada E.g. How would regulation affect market access? What are the main marketing challenges for the organic industry? E.g. How would regulation affect market access? What are the main marketing challenges for the organic industry? Conclusions: Conclusions: Producers support regulation that provides market access Producers support regulation that provides market access Developing a mandatory standard is deemed more important than educating and promoting organics to consumers Developing a mandatory standard is deemed more important than educating and promoting organics to consumers

15. Timeline Near completion of survey stage Near completion of survey stage Next Stages: Next Stages: Data Analysis Data Analysis Writing of Industry Papers Writing of Industry Papers Marketing Guide? Marketing Guide? Industry papers available at our tradeshow booth - come visit! Industry papers available at our tradeshow booth - come visit!

16. Questions or Comments?