Are We Too Zoomed Out with Our Definition of Success in Ag?

What does success look like in Agriculture?

Over the last decade or so, success has been defined as bigger – more land, more animals, more yield. The goal has been to get bigger and develop more efficient enterprises. The message to producers in any sector of agriculture has been – buy this thing and you’ll get more with less. But at what cost? What is actual success?

Are we too zoomed out with our definition of success? Have we unintentionally forced thousands of farmers out of business – which also happens to be a way of life? Have we lost sight of what products are meaningful to the farmer and agriculture in general?

I think so. A mentor of mine has been saying a lot lately – we have lost the ability to do an on-farm enterprise analysis. And in part, I think that is because when nothing makes money, why keep doing an enterprise analysis. It will always look terrible.

Ok, a quick business 101 lesson. There are two ways to compete in a marketplace: low cost versus differentiation. What we’ve done to Agriculture is told them that EVERYONE must be low cost. That doesn’t work economically. If everyone is low cost then no one is making money. And let me be clear - NO ONE IN AGRICUTLURE IS MAKING MONEY.

And how have we inadvertently forced an entire industry into thinking they MUST be low cost? Not an easy answer, but one factor that I think is often overlooked is that our innovation efforts have been focused on efficiency. Can we run our production centers as efficiently as possible?

We have sold the idea that farmers MUST do more with less – essentially the definition of efficiency. Efficiency as the number one focus of an operation only occurs when wanting to remain a low-cost supplier of a good. But when differentiation is the strategy, other focus factors become more important.

So, what does this look like in agriculture? Technologies to make high-end cheese, soaps, farm to fork beef. It also looks like producing food for immigrants and their cultural traditions that they don’t otherwise have access to. It looks like doing market research in your community to find what’s missing and filling that niche. I believe that if more operations turned away from economies of scale and focused on a niche, they would make a whole hell of a lot more money than they are currently.

Now with that being said, I do need to acknowledge that our supply chain infrastructure isn’t set up to handle differentiation.  Which could be, and probably will be, another whole article.  I’m not sure how a dairy farmer can successfully switch from economies of scale to differentiation without a hell of a lot of capital to do so. Capital no one has. So, this is where innovation comes into play.

I believe it’s governments and corporation’s role in our agriculture ecosystem to look outside of the standard economies of scale ‘efficiency’ principles to develop next generation products. We don’t need more with less, we need products that can be adopted at relatively low cost and get money into the pockets right now.

We need common sense, farmer-first innovation. One definition of innovation that I particularly like is this: "innovation is crucial to the continuing success of any organization." And what’s critical to the success of an organization – profit. We can efficiency all day, but if those efficiency innovations don’t actually produce profit, then that is by definition unsuccessful.

So how do we do this? We go back to basics. We talk enterprise analysis from the beginning of any corporate project. We get governments to put money into the agriculture infrastructure to give producers more options. We funnel more resources into extension to develop community ready options for differentiation and NOT economies of scale. We stop putting everything under patents, especially at the land grant institution level, and start getting knowledge and options into the hands of the farmer. We create new supply chains for things like data, part-time labor pools, marketplaces, and low-carbon grain and meat. We bring big food and beverage companies to the farm and get them to pay premiums for practices that only benefit their shareholders not the farmers.  

I’m optimistic that there will be shift soon – honestly there has to be. What does your innovation pipeline look like? Do you have any farmers consulting on your projects? Or are you just bringing to market ‘a really great product’ without having put any thought into market fit?

If you answered yes to any of those questions, contact me. Let’s chat. I can help you develop clear priorities, go-to-market strategies, and how to develop farmer-first products with common sense go-to-market strategies.