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What Will You Pay For?

January 11, 2012

As a small and growing operation we ask this question on a regular basis. Can we offer something more than we do? Can we do something different or better than we do? What will you the customer be willing to pay for?

It’s been our experience that many people say they want organic or more holistic or better but either can’t say what that is or aren’t able/willing to pay more for it. Although we’ve expressed that, we’ve been told it’s wrong and that people *would* pay for choices, 10% or sometimes 25% more than they are now. I’m skeptical.

At the same time we never stop learning. We’re serious about combining tradition with technology, using what fits to allow us to take better care of our animals, while having a traditional view of what that is in many ways. We’re active in social media but enjoy the face to face interaction of shows and fairs.Entire conferences, from the AgChat Conference to individual sections of the agriculture industry, are focused on what you, the consumer, want.

So it was with interest I read an article in a poultry production magazine about social media and some comments from a panel that included Harry Balzer, a food industry analyst.

There are issues from antibiotics to food safety to how chickens are raised and it is market driven. “But don’t buy into the idea that they will pay 10% more for it. That is not true. Consumers say do I want an environmentally friendly product? Absolutely. Do I want organically produced products? Absolutely. Do I want animal welfare concerns [to be addressed]? Absolutely. What I don’t want is for you to charge me for it. In fact, that’s the opportunity. If you can do that and not charge me for it, I’ll be at your front door.”

Another panel member told of his markets offering new packaging – compostable expanded polystyrene packaging, but “people haven’t noticed. There’s been very little consumer comment on it.” Is it taken for granted? Or do people pay attention to these things as much as is claimed?
We aim to please our customers, but also seek to fairly represent agriculture as a small spoke in the wheel. We cannot supply the masses, but can supply food choices for select people. At the same time it means being aware of what those customers want…not what they say they want but what is important enough to pay for. If, like the bigger industries have found, ‘going green’ isn’t a big issue to even mention then does it really matter? All businesses need feedback. With a small situation we have considerably more communication than many, but it is an effort!
Likewise, when improvements cost those things need to be figured in, resulting in higher costs. If our costs are slightly higher per bird than Tyson’s and people aren’t willing to pay it, then there isn’t a real incentive to compete with Tyson’s and there isn’t a sincere effort to finance competition to corporations. We can’t compete on volume and price – we can compete on service!
Donnie Smith of Tyson’s notes ““It costs more per pound to produce a small bird versus a large bird, and consumers are going to tend to buy the product that is cheapest per pound. Those are the facts of doing business and providing food for people. Our industry has to find all the efficiency available to produce food that is affordable.”

What will you pay for? That drives the market, agriculture and food production more than “just consumers” can fathom. Talk to us. Employ us. The choices are many but, you Mr. & Ms. Consumer, must make them. We look forward to hearing from you.


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