LETTERS
Friendly juice
Various studies shed light on why consumers' stated commitment to
buying
"green" products don't translate into actual sales (Consumers say
no to
eco-friendly juice, Dec. 7). Among them are availability of
product, choice
and access to product.
Allen's Ecological Apple Juice was conceived and developed to
break these
barriers by offering a name-brand, ecological product (especially
one so
important in childrens' diets) at an affordable price. Based on
market
research World Wildlife Fund Canada and SweetRipe jointly
conducted prior
to launching the product, the price should have been 10 to 15 per
cent
above the going market price. This would still bring in a better
margin for
Allen's and the retailer, and more than compensate for the 10 per
cent
premium paid to farmers for apples that complied with the
integrated pest
management protocol developed and verified by WWF.
Unfortunately, SweetRipe positioned the product head-to-head with
organic
at a 55 per cent premium. Who was going to either list or buy
apple juice -
even a great-tasting and value-added product - at $2.79? As a
result,
Allen's Ecological never made it to the shelf and consumers
couldn't buy it
where they usually shop. A perfect example of the three barriers.
Allen's Ecological was marketed from a positive point of view,
emphasizing
natural pest control, tree nutrition, reduced use of chemical
pesticides,
and protection of the natural environment. Rather than
interpreting this as
a slur on apple production, the Apple Marketing Commission should
be
pleased that Ontario growers have an opportunity to receive a
premium price
and that ecological growing practices are in demand and being
adopted
voluntarily.
Julia Langer
Director, wildlife toxicology program, WWF Canada
Thanks, Farm & Country
I want to thank Farm & Country for sponsoring the bursary I've
been
awarded. This assistance is greatly appreciated and encourages me
in the
pursuit of my career and studies at Kemptville College.
Karley Lovat-Fraser,
Kemptville
Pork support
Pork producers are deeply concerned about their future in the
industry.
Good and lively discussions are being held on issues such as
producer
marketing systems and increased involvement in the processing
industry to
achieve more competition and control.
Some people wonder where the Ontario Federation of Agriculture
stands on
these matters. The OFA is of the firm belief that producers
should decide
among themselves how they want to market their commodity. Farmers
know
their industry in detail, and what alternatives are available to
them.
General farm organizations such as the OFA are not in a position
to tell
commodity groups, including pork producers, how best to market
their
product. The commodity groups must decide among themselves which
approach
is in the best, long-term interests of their members.
The OFA is not in a position to dictate to the Ontario Pork
Producers
Marketing Board and its members how their hogs should be
marketed. But once
that decision is made, pork producers can be assured that the OFA
will
stand four-square with them to see that the chosen approach has
an
opportunity to work on their behalf.
In addition, we are here to lobby for other policies and programs
that can
contribute to the future viability of pork and other producers.
The food industry is undergoing massive change as processors and
retailers
consolidate to gain ever-increasing power in the marketplace. In
the war to
maintain farmers' fair share of the food dollar, the last thing
needed is
division among our ranks. Let's settle any internal differences
quickly,
because the bigger battle is yet to come.
Ed Segsworth, President
Ontario Federation of Agriculture
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AGRI-BUSINESS
Nuts & bolts
"Horrible" equipment market ahead
There will be fewer deals at the dealership for tractor shoppers
in 1999,
says a Boston-based iron man.
The days of company discounts on tractors are gone, Credit Suisse-First Boston Bank managing director John McGinty said in an in-your-face machinery sales forecast at the Canadian International Farm Equipment Show late January. His remarks left some Canadian farm machinery makers choking on their after-dinner coffees.
McGinty, who tracks the iron industry and has brokered corporate mergers such as Ford-New Holland in 1986, harked back to 1987, when a major equipment company slashed tractor prices to move machines. While the number of tractors sold tripled, red ink flowed, and corporate heads were soon to follow.
With the iron market currently "tanking like crazy," the industry won't repeat the mistake, he said: "Companies have realized that discounts get you nothing. All you are doing is buying future sales."
Despite positive farm balance sheets and lower grain stocks, the farm equipment market is "horrible," McGinty said. "It's about as bad as I've ever seen it....Whatever your forecast is, quadruple the downside," he told the annual meeting of the Canadian Farm and Industrial Equipment Institute.
U.S. tractor sales plummeted 42 per cent in the last five months of 1998, "and show absolutely no sign of not going down another 45 per cent" in 1999, he said.
McGinty said U.S. machinery markets will slump this year, but should pick up in 2000 if the livestock cycle improves, and there's bad weather: "It's a pretty ugly market when you have to be bailed out by weather or politicians."
As well as the usual suspects - commodity price collapse, Asian flu and the strong U.S. dollar - McGinty blames "the psychology of the farmer," and the US$56-billion Freedom to Farm bill, supposed to wean U.S. farmers off subsidies. Farmers, he said, are "scared" at the moment and not in a buying mood.
With the government backing out of the farm support business, they are also unlikely to cut production: "Farmers have no choice but to go fencerow to fencerow."
While the top third of farms in the U.S. and the bottom third with off-farm income are surviving, "the small family farm in the middle is sucking wind," he said.
Also affecting sales is the vast fleet of used tractors still in use from the '70s boom years, when 450,000 were sold.
The farm equipment industry will undergo further consolidation, McGinty predicted: Of 11 players today, five will remain in five years, and three in 10 years.
Farmer customers, however, look at service, not colour, McGinty
said:
"There is no brand loyalty in this business - it's dealer
loyalty." - John Muggeridge
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