How, When, and Why of Forest Farming

Unit 7 : Marketing Specialty Forest Crops
Section: 3.2

Market Chains

What is a Market Chain and Why Do I Need One?

Forest farmers in North America often are on their own to access markets. Producers are already selling these crops to buyers, but there is little information about how these arrangements are made. Until agroforestry markets are better characterized, it is up to individual producers to forge their own channels, contacts, and marketing practices.

The concept of a "market chain" can exemplify different types of special forest product markets. A market chain is the linked entities that bring a specific product from production to consumer sales. Longer market chains often result in a lower share of revenue generated by the product as the work, and reward, is spread out among many.

Direct marketing of forest crops implies a very short chain producer sells to consumer. Indirect marketing often has an additional link. - producer sells to a retailer or restaurant. Very few, if any, forest-based products have a market chain of more than three links. This makes forest cropping more profitable so long as production costs are kept reasonable.

Longer market chains often diffuse marketing responsibilities to links beyond the producer and result in a greater number of customers, and volume of sales.

Examples of Market Chains in Forest Farming

A basic market chain model is provided below in order to simplify the marketing linkages. This is followed by two real world examples of market chains.