The world of farming has taken a bit of a beating recently. Demand for food is still there, obviously. But we’ve seen serious issues with the supply chain and even a shortage of labor in some cases. The pandemic has disrupted the industry in a way that few imagined was possible at the start of 2020.
What’s happened has happened. And now it’s time for entrepreneurs in the sector to rethink the way they do business to make it more robust.
But what strategies are there that could help?
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Let’s take a look.
Diversify Supply Relationships
The first step is to diversify your supply relationships with other businesses. Thanks to various lockdown measures, demand for restaurant food is down massively, while supermarkets are seeing a surge in sales.
Agricultural businesses selling to the correct wholesalers are, therefore, putting themselves at a distinct advantage. Being at the top of the supply chain means that they can filter their food through multiple channels, seeking out individual profit-generating opportunities.
Remember, not all distributors will have stable relationships with lots of clients from across the food industry. So selling to several of them can help to hedge your bets.
Bring More Of Your Processing In-House
Many farmers never dreamed of having to bring their processing in-house before COVID-19. But, again, supply chain issues mean that many are having to. They’re discovering that it’s better to miss out on the middleman and go straight from the farm gate to the retailer, avoiding the troublesome intermediate steps.
Nobody is suggesting that farms should bring all their processing in-house. But having some capacity is certainly a bonus in times like these.
If you click here, you can learn more about the equipment that some agricultural companies are using to improve their offerings. High-quality parts and engines can transform the way your business operates.
Promote Healthier Eating
The world is currently facing a diet and health crisis. As more people move over to refined, meat-filled diets, all-cause mortality is rising. And it’s worrying.
There’s a lot that the average agribusiness can do to help push back against this trend. One idea is to build a business model around healthier products that don’t compromise on taste. We’re already seeing some farmers exploiting ancient grains. But there’s still a lot of room for improvement.
Remember also that this is a growing market. People want healthier food these days more than ever before. But they also want products to be more affordable. Therefore, growing healthy food en masse could help to push costs down and encourage consumer adoption.
Diversify Your Product Offerings
The last technique that you can use is to diversify your product offerings.
Farmers have been using this strategy to protect themselves financially for thousands of years. However, because the world was so stable before COVID-19, many agribusinesses simply grew the most profitable foods, without thinking about the risks that they faced.
Always grow a range of products that can help you adjust to supply and demand shocks. It’s the best way to keep your cash flow healthy.
Photo by Julian Hochgesang