AGRIBUSINESS TIPS

Farming should bemarket oriented. Always consider:
WHAT to produce
WHEN to Produce
WHO to produce for
HOW much to produce
HOW to combine enterprises
WHICH resource to use in
producing each commodity
Market research is therefore
important and the information
must be collected and analyzed.
Market Research is the systematic,
objective and exhaustive search for
data or study of facts in marketing.
This includes price research; in
order to do price setting; product
research; for produce quality
setting and most important
strategies for coping with
competitors.
Important determinants in
marketing of horticultural
produce
The two most important
determinants to high returns are
quality and quantity . Quantity is
basically determined by agronomic
aspects and quality is determined
at
Pre-harvest level
Harvesting
Post-harvest handling
Market Timing
This is a process whereby the
planting is done in a way such that
harvest time corresponds with the
highest demand in the market and
therefore higher profits. This entails
proper planning and effective
market research.
For the local markets, its best for
farmers to time their crops so that
they come to maturity in the dry
months of December, January,
February, March and April when
rain fed produce is scarce in the
market. Export crops fetch good
prices in summer especially in the
Middle East, Europe and America.
NOTE:
For one to succeed in horticulture,
high quality produce ensured by
observing pre-harvest intervals and
Maximum Residue Levels (MRLs) is
crucial. MRL is done to monitor
pest reside on crops. With
irrigation, farmers can time the
market in order to maximize on
profits. Formation of cohesive
marketing groups will ensure less
exploitation by the middle men.
Market research is very important
in ensuring market efficiency.
Planning for horticultural
production
When making decisions about a
new crop, a number of factors have
to be considered:
Access to technology required to
produce the crop to export
standards
Availability of a market outlet
Amount of investment required
and the initial funding available
The level of management
expertise needed including the
availability of adequate skilled
personnel
The production and marketing
costs and returns to the various
alternative crops
To be successful and make a profit,
we need to continually make good
choices between alternative crops
and alternative production
methods. A tool to help make these
choices is Gross Margin Analysis .
In calculating a gross margin, all
the costs of producing a crop are
added up to give the total cost of
production . The expected yield is
multiplied by the expected average
price to give the total revenue.
The cost of production is
subtracted from the total revenue
to show the estimated gross
margin as the total profit or loss.
In calculating the gross margin, a
series of assumptions have to be
made. The better the assumptions
are, the closer the estimates of
costs and returns will be to the
actual costs and returns. An
incomplete calculation made with
old costs and prices or over
optimistic projections of potential
yields, or future market prices is
likely to lead to bad choices,
disappointment and losses.