Traditional commodity markets no longer transfer enough information among producers, processors and end users to ensure that grain and oilseed content is aligned with end-use applications. "Our present market coordinated structure needs to respond to a shift from trading containers to trading content," says Frank Beurskens, an agricultural consultant.
Different organizational structures emerge in response to economic changes, Beurskens told USDA’s ag forum. The poultry and pork industries "migrated toward vertical integration in response to consumer demands for safe, consistent and low-cost products."
Row crop agriculture "will gravitate toward vertical forms of control unless producers can integrate new technologies and form new relationships," he adds.
Genomics, bioinformatics, precision measurement and the Internet have changed the world of information. "Price discovery and risk transfer, the foundation of market exchange, are being replaced by value discovery and information transfer," he adds.
New relationships based on organizations such as horizontal alliances combined with investments in biotechnology and information technology results in "a dynamic, responsive and balanced agricultural system capable of meeting consumer food demands for the 21st century," says Beurskens.