Many poultry farmers complain that middlemen involved in the marketing of poultry products make it difficult for them to make optimum profit from their products. Yet they do nothing about it. This is because most poultry farmers feel helpless against the domineering influence of the middlemen. However, this needs not be so. With careful planning, a smart farmer can counterbalance the powers of the middlemen, and even when he has to deal with them, it is from a position of strength.
What are the strengths of the middlemen?
*They are aware that your products are perishable, so if they can hold you to ransom by delaying a little, you will be forced to sell.
*They often have cash to pay, and they know that you desperately need the cash in their wallets.
*They are the ones who KNOW who the consumers are, where they are, what they buy, when they buy, why they buy (or will not buy), and how they prefer to buy. So they are convinced that without their help, your products will perish on the farm.
So, what do you need to do? You need to stop romancing with the idea that you are a producer, and not a marketer. Of what use is your production if it does not get to the market, and bring back value to you in form of profitable returns? If we agree that production is useless in the absence of marketing and sales, then we should all get interested in the marketing end of our respective vocations. Even if we are not going to be actively INVOLVED, we must at least be actively INFORMED about marketing trends, and the factors that impinge upon the marketability and profitability of our products. I suggest just a few thought starters:
- Adopt production and storage practices that elongate the shelf life of your poultry products. This implies that the feeding, the drinking water, the biosecurity protocol, and egg collection practices must be such that contribute to longer shelf life of your eggs. The same token applies to broiler farmers. In fact, flock hygiene is extremely important for carcass quality and shelf life in broilers, and we can only neglect it to our financial peril. Then, we come to storage. Optimum ventilation, maintaining appropriate temperatures, avoiding contaminants, and getting rid of pests are some of the ways to do this during storage.
- Don’t Get Broke. Adopt cash flow policies and practices that enable you to have reserve cash all the time. Do not depend on today’s inflow for tomorrow’s recurrent expenditure – you may not be able to hide your desperation for cash from a smart middleman. This loops back to farm capacity. Limit your farm size to a capacity that you can run efficiently with available working capital. Stocking way above your available capital and relying on “faith” to meet up with recurrent expenditure will compromise your bargaining power. Don’t do it!
- Get to know the market intimately. In your area, get to know who the consumers of your farm products are. Where are they? Are they clustered or diffuse? Knowing where they are may in fact inform your decision to boycott middlemen and reach out to your consumers by yourself (i.e. become a retailer, especially if your farm is small / moderate sized), or to select your middlemen with greater precision. What do they buy? Do they prefer medium sized eggs or large eggs? When will they buy? When will they not buy? (so that you can adjust your expectations, and avoid planning important expense outlays for low seasons). Are there other factors that could make them better inclined to buy your products (e.g. will more buyers come if someone is standing by to help them cut the chicken into pieces for free? Will more buyers come if we open on Sunday evenings and public holidays?). Etc.
These are a few of the things that you can do to get a grip on your market. The point being made is this – do not surrender to the middleman. The middleman is primarily a knowledge worker – not a “labourer”. You can get acquainted with what he does by seeking to become equally knowledgeable about the market. As a producer who is knowledgeable about the market, even if you choose to work with the middleman, he can no longer hoodwink you; because you know.
For optimum profit therefore, please get to know your market intimately.