Types of Markets
What Markets Are Out There?
There are a number of market options out there and it is important to understand the pros and cons that are associated with each before you commit yourself and your family to a market. Knowing what kind of market will work best for you is important because each NTFC behaves differently in each market type. Following is a brief overview of the various markets available to you as an NTFC producer. While reviewing this information, reflect on your own goals and consider which of these markets is most likely to help you reach them.
Jim Ochterski in his publication Marketing Special Forest Products in New York State helps answer this question by providing examples from research that he conducted with forest owners and entrepreneurs in 2004-2005. We highlight some of these below, and encourage you to consult this useful document to learn about other possibilities.
Niche vs. Traditional Markets
An important aspect of developing your agroforestry business is to determine what type of commodity you plan on selling. The two main choices include producing a product to fill a niche or unique market, or producing a more traditional product.
Developing a unique product translates to less competition and therefore higher, more sustainable rewards. However, as more producers enter niche markets, your product may become more mainstream. This eventually translates to lower rewards. Therefore, it is strategic for you, as an agroforestry business owner, to continue to find and fill niche markets . It should be your goal to find and create innovative products.
Farmerís Market Stand: www.wfbf.com
Seasonal vs. Year Round Markets
Production of seasonal specialty forest products has the advantage of providing higher income during the season in which the product is readily available. However, as a producer of a seasonal product, you will need to plan how to make that income last throughout the year so that you can continue to support your business. Production of seasonal products such as fruit, maple syrup, and nuts can also increase the price volatility of that product. Additionally, you need to consider the time constraints of a production intense season. Do you have the flexibility to devote a large amount of time to your agroforestry business during the production season?
Production of a year-round product such as decoratives, flavorings, and weaving materials has several advantages. First, this type of product market has demand year-round, thereby providing income throughout the year. Additionally, with year-round products, you may be able to avoid a ďbusyĒ season which increases demands on your time during that season. Instead, you can establish a steady production system.
Value Added vs. Raw Material Markets
The markets and demands for raw and value added materials vary substantially.
Selling a value-added forest product has several advantages:
Before you decide to produce a value-added product, however, you need to consider a few additional factors:
Selling raw products also has advantages:
Other factors to consider in selling raw product are:
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