Producing commodities for new biotech-driven markets may be the last chance for farmers
hoping to grab a stronger link in the value-added food chain, says Don Senechal, of Senechal, Jorgenson, Hale & Company, Danvers, MA.Many producers in the 1990s have taken steps
to capture more of the food dollar, and realize a better profit. Particularly in the Northern Plains, where a harsher agricultural environment has forced
producers to experiment and adapt. Still, he says, "it is just flat criminal how little participation there is of Midwest producers in value-added."
With food processing blending with the life science and biotechnological industry, evolving into an amalgamation of food, agribusiness, chemicals,
and pharmaceutical sectors, there will be new profit opportunities for farmers in the next decade to produce differentiated, market-specific products, Senachal says.
"We see huge growth in ag biotech products," he says, despite opposition now of consumers in Europe and other countries about genetically-modified organisms. Many of the same consumers who are
wary of GMO foods are purchasing GMO pharmaceuticals. When GMO crops and foods are developed that serve a specific health function— to reduce the risk of a specific disease, for example—consumers will become
more accepting.
Monsanto and other companies are already developing crops with high beta-carotene oils, targeted at developing nations to reduce vision
problems. Other crops are being aimed at improving cardiovascular health, lowering cholesterol, even reducing attention deficit disorder in children.
The best food processing mechanism for delivering these crop attributes to the consumer has yet to be sorted out.
"Some of these products are 3, 5, 10 years away," says Senachal.
"Planning for their arrival needs to start now." To that end, several questions need to be addressed: How readily are farmers likely to adapt these emerging technologies? What are their reasons to do so, and what
are their concerns? How does the farmer become linked to the evolving system?
The grains handling infrastructure will also need to be reinvented. "There
will be a need to put together a new system. It will require investment, commitment, a link to producers, and the ability to be profitable."
Senachal says producers can gain an edge by establishing the information and organization needed to tie the new "nutriceutical" delivery system together— and the sooner the better.
"Companies will work with providers who have that system in place. Five years from now, significant products will be ready for production. If a
system's not in place by then, they'll find their own," says Senachal. "Can growers put organizations together to retain more value at the farm level,
but still make it cost effective for companies to buy? I think these opportunities exist, but only for so long. I will argue strongly that there is a
role for growers. It will take investment and a lot of smart people working together, but it can work."
Senachal says formative lessons learned from new generation
farmer-owned cooperatives can be a stepping stone to building new biotech-based marketing opportunities. However, buyers are more comfortable working with cooperatives that are farmer-owned, not so
much farmer-controlled. People well-versed in corporate business need to be involved in management, even serving on the boards of farmer-owned businesses.
Producing commodities for new biotech-driven markets may be the last chance for farmers
hoping to grab a stronger link in the value-added food chain, says Don Senechal, of Senechal, Jorgenson, Hale & Company, Danvers, MA.