Iowa Farm Producer Group Competes with the Large Agribusiness Companies by Taking Iowa State University to the Marketplace

James H. Jensen, Farm & Ag Business Management Field Specialist, Southeast Area

Problem Statement
Large companies dominate the food industry and are typically located in states other than Iowa.  The raw product for these companies is often procured in Iowa and other Midwestern states.  Profits from the crops grown on Iowas soil move to other states where processing, sales, and distribution activities are located for these large companies.  Iowa needs the jobs and profits associated with the use of its rich soil resources. 
Programmatic Response
Iowa State University has struggled to maintain a state of the art soybean breeding program that is responsive to the needs of Iowa farmers.  Dr. Walt Fehr has developed varieties that fit the value added health market by offering altered fatty acid profiles that produce oil and meal with characteristics that are more healthful than normal soybean products.  These unique varieties need to be used by Iowans in Iowa.  Most large agricultural companies have their own research facilities and pretty much control what is offered to the market for consumer purchases.  These facilities are often located in other areas of the country and do not economically benefit Iowa.  Jim Jensen has worked with farm producer groups in Iowa to develop an entrepreneurial spirit directed at growing, processing, and marketing these new products into niche markets.  There has been a large learning curve for the entrepreneurial farmers to move up the value chain in processing and selling these new products.  Assistance has been provided by Iowa State University in the areas of marketing, strategic business planning, member training, manager training, and member recruitment.
One of the entrepreneurial farmer organizations developed is called Innovative Growers.  This group has developed their own label Iowa Natural and are currently marketing three new products into the health food niche markets.  The group has 40 farmer/members and is working to expand into the large health conscious markets on the two coasts.  They grew 5,000 acres of specialty varieties in 2005 and are hoping to increase that amount in 2006.  Sales generated by groups like this benefit Iowa.

March 9, 2006
121 - Adding Value and Enhancing Agricultural Products

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