Navigating relationships with processors and brands

Who should farmers be connected with to help bridge the gap between processors and brands?  We’re joined by CEO of Edge Dairy Farmer Cooperative, Tim Trotter, as we discuss the ins and outs of the important relationships and connections that farmers need to successfully market their products. Does a relationship with processors and brands improve a farmer’s future success?  And why act now?

Learn about these topics and more now!

Transcript

Joanna (00:00): For farmers to successfully market their products, they must weave a web of connections between their direct customer, the processor, and the end consumer to help us better understand the ins and outs of these connections and their importance is Tim Trotter, CEO of Edge Dairy Farmer Cooperative. Tim, who should farmers be connected with to help bridge between processors and brands

Tim (00:22): In the dairy industry, we talk to our processors, really have a relationship where it's more strategic than just transactional. I think farmers now are really looking to know more about where their products are going, what is that product mix? What is it potential for those products in the marketplace? Because let's be honest, we are in a time when there's a lot of interest in food. People want to know where their food comes from, and for the most part, that's a positive for American agriculture. Just to have that connection to your consumers is really interesting. But the problem we've had in almost all industries is where one or two people removed from that transactional sale. So I think to the processors, really talking about them and what their business model is, and making sure that your voice is being heard through your processor.

Joanna (01:10): So you say not transactional. So what does an active role with your processor and brand look like?

Tim (01:17): I think it comes back to the product mix that they're selling. What type of milk are they looking for? What is the requirements for that marketplace? I think it's really knowing more details. And I think a lot of our members are very sophisticated. They ask a lot of hard questions. They ask those questions that maybe they wouldn't have asked 20 years ago. I mean, all they cared about was that the bill cut picked up and they got a reasonable value. Now, I think, that in many ways, the stakes are higher for farms. In some cases, especially starting farms, are highly leveraged. You know, bankers and lending institutions want to know that they have a viable market. So I think it's just really asking those questions of your processor and many of the processors, what we've seen is they're having the conversations with the farmers as well. It's a two-way street where they know what some of the demands or requirements I would like to call it, are of the marketplace. Then how do they, between the two of  them, figure out how they're going to serve that market? It's more than just, this is my price and this is what I'm gonna do today. No, it's, you know, where are we at today and where are we going in the future? And I think most farms feel better about that, and why wouldn't they?

Joanna (02:27): And let's simplify this even more. What are the steps farmers should take to be more connected with their processor?

Tim (02:35): Well, I think it's understanding what market you're selling to and understanding, you know, again, doing your homework on what that market is, you know, what are the things that are being said online about it? What are some of the things that brands are saying very publicly about where they wanna be? Especially when you look at the carbon markets, you're looking at sustainability. There's a lot of information out there on the people you're selling to, but it's important that you have that relationship with the processor. So they'll tell you what brands are selling to. So I think it's doing your homework and being informed, uh, no differently than what the brands are doing with the, like in the dairy industry, they're, they want to know what dairy farmers are doing. They want more transparency in the transaction, right? Mm-hmm. <affirmative>, I mean, these, these, uh, brands really wanna know more data and more about the farm. So it's really, I think it's, it's on both parties to really do their homework and understand, you know, and that transparency with your processor to know who you're serving the products to.

Joanna (03:32): Where can farmers develop relationships with processors and brands? Is it still in that in-person space, or is it online?

Tim (03:40): I think it's in person for the most part. I think it really comes back to, you know, leaning into that conversation. You know, what does that look like? But again, I think there's just a lot of opportunities and I think US farmers and ranchers in  Action actually is another segue into forming those opinions. You know, people who are involved in organizations like that, that have the whole gamut of the food value chain at the table. I mean, that is a really good resource to understand, you know, at a high level, very strategic level. Where is everybody at? It's not that hard to do the, the math once you know, those equations. So, like I say, USFRA has always been a great resource, and I think trade associations like that are awesome. Within the dairy industry. We have the Dairy Innovation Center, DMI, they do a lot of work with the brands here in the state of Wisconsin. We have Dairy farmers of Wisconsin, all of them have direct resources to the brands and to the products that we're selling to. So there's a lot of, there's a lot of information out there. You just gotta know where to look for it.

Joanna (04:39): Tim, I always love your optimism. You make it sound like it's so easy to be developing these relationships. What's kind of that timeline, you know, if a farmer starts to reach out with their processor, are they gonna see instant results or what is that timeline I timeline on developing a relationship?

Tim (04:58): Yeah, I think it depends, Joanna, on the processor, I mean, some of these processors do round tables. They talk with some of their key producers and they'll have discussions about what they're hearing from the value chain. So I think it a lot depends on the processor and the sophistication and the openness of that processor. But keep in mind, you know, for Edge Dairy Farmer Cooperative, the number one priority of our members is having a stronger relationship with the processor of everything else that a farmer could pick that is the highest, that's the highest value item that they want edge to deliver. So that's why I'm so enthusiastic about this, because this is what our farmers are asking for. And if you would've said 20 or 30 years ago, farmers wanted to know about where their cheese went to and what kind of strategic alignment they can have within the value chain. That would've been like, why would you wanna do that? But today, I think today's farmers and our members in our organization are really looking to be more strategic in how they grow their business. And I think it's really, really important that we take that opportunity because I think it's a win for the consumer when they have that direct relationship with the farm.

Joanna (06:08): And we all want everyone to win. So when you're connected with your processor and they're winning and selling a product that just go back, goes back to the farmer's bottom line.

Tim (06:19): We would sure hope so. And I think with, you know, recently Edge was very blessed to be able to get one of the Climate Smart grants. And that is really one of the key things in the Climate Smart Grant is connecting the farmer to the market to try to get a higher value. So not only is that a strategy, just to know your processor better, but actively, one of our major projects is aligning the market and aligning the values of what we're producing on our farm, especially in sustainability and trying to get a higher reward, a higher value for that for our farms. So, I mean, everything's kind of aligning really well. And I know there's some people that are afraid, like for an example, if you're in a project like that, you have to be willing to share some data on your farm. You have to be willing to show them what your scores are.  I keep coming back to, most dairy farmers have nothing to hide. They have everything to promote. And I think this is just another opportunity to take your numbers and leverage them in the marketplace. Again, farmers have nothing to be ashamed of. They have everything to be very hopeful for, but also we want to always continuously improve. And the only way you're going to have value for that is linking yourself in the marketplace.

Joanna (07:30): And with this Climate Smart grant that you mentioned, do you have processors that are working with the farmers in that situation?

Tim (07:37): Absolutely. Actually, one of our sub-awards was Agri Pure, probably one of our biggest markets for the 32 processors that we sell milk to, or our farmer sell milk to. Agri Pure is most definitely our largest single milk supplier. They actually were one of the sub-awards within our grant. So they're actually developing a label, developing a market for climate smart commodities. And that's going to be predicated on a strong relationship with individual farms. So it's all aligning Joanna, and I think it's just a matter of scale. How do we get all of our processors doing this? And it's just not for dairy. I mean, it's throughout the whole value chain. I know that a lot of the commodities are working really, really hard to get away from the commodity mentality and more into a specialty mentality of,  I have the grains that you need worldwide, and I want to link up with those people who see those attributes and the stuff that I'm producing.

Joanna (08:31): Two more questions for you, Tim. How does a relationship with our processors and brands improve our future success?

Tim (08:38): If you're aligned with your consumer, if you're aligned with the future thinking of your consumer, you're going to be spot on. It's when we're naive and we're re really relaxed and we're almost complacent with the marketplace, that's when we're vulnerable right now globally, I think American agriculture and American dairy has a tremendous opportunity, but we have to seize that opportunity and we have to do it every day. And we should never get complacent and comfortable. We have to make sure that we're connected with the marketplace, connected with the consumers, because we know when we are not communicating and we are not advocating the right things about our business, others will and others aren't always a good source of information. It comes back to US farmers and ranchers in Action and all the work that they do. Telling our story and working with the brands internationally is really, really valuable. So I think it's, everybody has a shared responsibility in this, but we have to be proactive and consistent and, and do this every day as a part of just developing our business.

Joanna (09:38): Right? It should be a part of our strategic plan. And last question for you, Tim. Why ACT Now? Aren't steps already being taken through the checkoffs and some of these, you know, USFRA to better these relationships?

Tim (09:52): I think all those activities are setting the table for change, but it's up to the farmers being involved. That's the key point. USFRA, DMI, all these organizations can do a lot of wonderful things, but if they don't have engagement from farmers, they have nothing. It comes back to that follow through at the farm level. That interaction, making sure that your checkoff dollars are leveraging to help the products you're selling is vital. So again, it all comes back to engagement and, and just following through with doing your best due diligence. It's no different than if you were in herd management, you'd be looking for all the tools that better your herd health. Why wouldn't you do that in the marketplace too, with your products and how you're selling your products? So I think it's really, really important that we take this opportunity.

Joanna (10:44): Involvement and engagement is key. And we're fortunate to have organizations like Edge Dairy Farmer Cooperative that help us understand the ins and outs of these relationships with processors and brands. We thank you for your time in learning more about agriculture. If there is something you'd like to learn more about, you can send me an email directly to podcast@usfraonline.org. Until next time, I'm Joanna Guza for Farm Food Facts.