This Palouse farmer turned direct-marketer relies on local consumer preferences to help guide his family’s grain and cattle operation.
Consumers shape farm business
Prehistoric volcanoes, glaciers and flooding all came together in a unique way to shape the topography of eastern Washington and north central Idaho. As much as 200 feet of fertile soil was deposited after these events, resulting in a "sea of wind dunes" that we know today as the Palouse. The hilly terrain now plays host to some of the country’s best wheat producers.
Read Smith is one of these farmers. He grows a variety of crops, including hard red winter wheat, soft white winter wheat, oats, barley, millet, sunflower, safflower, peas, lentils and camelina (an oilseed similar to canola).
"Every year is different," Smith says. "We’ll plant specialty crops such as safflower if the market signals are right. They aren’t in our normal rotation, but we can grow most anything."
Smith doesn’t limit himself to marketing crops he can raise on his farm. In the course of his farming career, he has taken on multiple business ventures that hone in on direct marketing opportunities.
This consumer-oriented farmer doesn’t mind thinking outside of the box or even outside of the Palouse.
The newest product he’s developing depends upon a traditional Southern crop—a rice-based pasta.
"Our idea is to bring rice flour to the market," says Smith, who farms nearly 4,000 acres near St. John, Wash. "We look at what the public is asking for but can’t find. We’re trying to position ourselves to get ahead of these trends. It’s a good fit and a unique marketing opportunity."
Smith began honing his direct-to-consumer mindset in 1999. He was among the first of about 60 farmers to join Shepherd’s Grain—a co-op that markets flour to area bakeries and grocery stores across the Pacific Northwest. The co-op brings several benefits to Smith’s farm.
Buyers’ Best. Shepherd’s Grain helps link Pacific Northwest wheat farmers with a growing local customer base. Twenty years ago, the bulk of Smith’s crop was shipped overseas. Today, the majority stays in the Pacific Northwest.
"Each year, we take our growers’ production costs and average those acres," explains Karl Kupers, founder of Shepherd’s Grain. "Then we look at marketing opportunities from both the producers and the buyers."
Building strong partnerships with buyers is just as important as grabbing the best price, Kupers says. "Over time, the relationship benefits from stability, if nothing else," he says.
It’s a win-win situation for bakers and the producers. "We’re going for the varieties the bakers around here like," Smith says. "That drives a premium because the bakers know they’re getting the best flour available."
New Markets, New Ventures. This means of marketing led Smith to his next business venture: Season’s Peak grass-finishedbeef.
"Shepherd’s Grain was our first experience with direct marketing, and that gave us the confidence to move in other directions," Smith says. "With our livestock, we used to do what every cowboy did. Now we’re marketing differently."
To help him get Season’s Peak off the ground, Smith brought in Brian Brown, a young rancher from southern Idaho. Taking a page from Shepherd’s Grain, Brown and other area family operations use Season’s Peak to raise beef sustainably and market it locally.
"We’ve put a lot of emphasis on animal welfare and well-being," Brown says. "It’s profitable for us, and it’s what the consumer wants."
Instead of shipping cattle to be finished, they are fed out on grass, Brown says. Then, the animals are shipped to an Oregon processing facility, and meat makes it to area supermarkets within the week.
"We’re basically producing a finished product," Brown says.
Smith can’t look at his crops without envisioning the finished food products they will someday become. That’s what steered him to his next business venture. Smith co-owns Pasta Mama’s, which produces and markets a variety of gourmet pasta products. Smith started as a supplier, but the relationship has since grown into a 50/50 ownership.
Each venture requires a different amount of time and financial commitment, Smith says.
Season’s Peak is largely a turnkey operation, although the cattle require additional time, feed and exposure to reach finishing weights. Shepherd’s Grain requires additional crop management from planning through delivery to ADM for processing. Pasta Mama’s is the most time-intensive, keeping Smith actively involved in promotion, sales, finances and physical plant decisions.
Smith says each venture is carefully considered on its individual risks and rewards. "Clearly, there can be dis-advantages involving an ag entity in direct marketing," he says. "The two major concerns are the time commitment and the risk involved with value-added marketing. Not every venture will be worth the effort."
For farmers interested in direct marketing, Smith advises them to closely examine each potential enterprise and set reasonable expectations within realistic potential markets. Start slow and grow after successful outcomes, he says.
Preserve the Palouse
With many of the Palouse hills being at 30° and 40° angles, Read Smith has seen area farms lose as much as 200 tons of topsoil per acre in a year. Some of the highest documented rates of soil erosion in the U.S. have been in the Palouse. Shepherd’s Grain co-op members deploy practices to keep their rich topsoil intact, including no-till, direct seeding and fallow ground strategies.
Get a closer look at a one-of-a-kind agriculture production region in this photo essay at www.TopProducer-Online.com/The_Palouse.
- October 2013