NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665

December 17, 1998

Producers Encouraged to Capitalize on Negotiation Skills, Plan

Agricultural producers are accustomed to negotiating with input suppliers, but trends within the agriculture industry are creating new opportunities to use these skills, says an agricultural economist with the North Dakota State University Extension Service. Instead of being price takers, farmers and ranchers can engage in marketing strategies that allow them to be price negotiators, using their skills to deal with buyers.

"Farmers and ranchers are already skilled negotiators, but they need a plan in order to capitalize on their skills if they intend to market value-added products," says David Kraenzel, agribusiness development specialist at NDSU.

The move toward integrating the food-supply chain is what is driving value-added opportunities, Kraenzel says. In its most basic form, the value-added food supply chain has five levels: producers, commodity processors, food manufacturers, retailers and consumers. However, the value-added chain for many commodities grown is this region is considerably more complex.

Using wheat as an example, Kraenzel says there are at least 17 points along the value-added chain that offer producers the opportunity to receive a greater return than they would receive by simply selling grain to a local elevator. Similar opportunities exist for cow-calf producers.

Identifying the point or points along the value-added chain that an individual producer may fit requires planning. And planning requires thoughtful analysis, a lot of writing and answering many questions. Kraenzel identifies 10 questions that producers need to answer when drafting a farm business plan:

• What is the current status of my business?
• What are my interests and skills?
• What are my expectations about the future?
• What do I need to accomplish?
• What opportunities exist for my farm?
• How do I select the farm plan that is best for me?
• Is my plan feasible?
• What might prevent me from implementing my plan?
• How do I monitor progress over time?
• How should I prepare to document, share and revise my plan?

The NDSU Extension Service has produced a series of materials dealing with farm business planning and compiled this information in a manual. The cost of the manual is $25, delivered. To receive a copy of the planning manual, call (701) 231-7393 and ask for Paulann, or stop by the nearest county office of the NDSU Extension Service.

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Source: David Kraenzel (701) 231-7374

Editor: Dean Hulse (701) 231-6136