6.5 Economic Considerations

Economics of organic production

The organic movement gained traction in the mid-1900s and has continued growing. Data from the 2019 Certified Organic Survey show that sales of certified organic products continued to increase from 2016. U.S. farms and ranches produced and sold $9.9 billion in certified organic commodities in 2019, up 31% from 2016. During the same year, the number of organic farms in the country increased by 17% to 16,585, and the number of certified acres increased by 9% to 5.5 million—results include those certified organic and those transitioning to organic.

The 2022 NASS Census Survey found 2,578 certified organic dairy farms with 328,000 milk cows, 1,170 organic egg farms producing over 544.5 million cartons of eggs, and 2,000 transitioning to certified organic production.

Economics of livestock veterinary services

It is no secret that there is a large and growing demand for veterinary specialties. Despite agricultural demand, the percentage of livestock veterinarians in practice has decreased over the past century, and new veterinarians are more likely to go into small animal medicine (AVMA, Covetrus). Many factors contribute to this, including student loan debt, location, weather, specialty salaries, etc. As a result, the supply of livestock veterinarians is not enough to keep up with the demand, and there is a marketable need for services. The supply of veterinarians with O/A education and training is even smaller. The lack of an O/A veterinary curriculum is commonly reported in North America, so most vets with O/A experience are self-taught and have learned from their clients. This creates potential for a niche practice with a higher demand for livestock veterinarians with O/A training, understanding, and willingness to work with these producers.

Adding services for these clients requires time, but veterinarians are not starting from scratch. They are building on their knowledge and skills and providing value-added veterinary services while filling a gap. The concept of value-added services means increasing the value of the service provided. This can be done in many ways depending on the market sector, for example, by adding a maintenance package to the sale of a car. Another example would be offering brand-name products versus generic products. There is perceived additional value in the brand name, so some customers are willing to pay more. The products are also more recognizable in their associated markets. Examples of this in veterinary medicine include providing clients a monthly newsletter on livestock health topics. Similarly, collecting and reviewing herd health data to discuss management changes with producers provides added value to what veterinarians do for their clients beyond diagnostic and treatment suggestions. A value-added approach can increase revenue and is particularly successful in niche markets.

This chapter has discussed some areas where veterinarians can play a role on O/A farms. Some of these services are likely already provided for current clients. Expanding these services to include the O/A “market” adds value to the veterinary practice.  For example, services like herd health consultations, pregnancy checks, and site visits to review disease prevention strategies are needed on O/A farms, just as on conventional farms.

The co-director of the Missouri Value-Added Development Center provides a list of the 10 key lessons in value-added agriculture. The first lesson highlights, “Value-added businesses are more successful if you identify the customers (or niche market) and find out what they desire. Then produce the products or quality characteristics they want and are willing to pay for” (Iowa Extension). Veterinarians with O/A knowledge and experience are a niche market. With one foot in the door, finding and speaking with those producers to determine their wants is the next step. Some general products and services O/A producers want and described in recent studies are listed below and in the Additional Resources section at the end of the chapter. Adding and marketing these services to those clients is a good start. However, to provide the most value to your clients, you should speak with them directly to determine their needs in your practice area. Moreover, be upfront and transparent with your clients regarding invoicing for your services. Your time is valuable, and transparent communication will help them better understand what they are being billed for and better appreciate your services and skills.

For more ideas on services needed, visit the following resources:

• Organic Livestock Systems: Views of Veterinarians and Organic Producers
• How can veterinarians be interesting partners for organic dairy farmers?
• Farm Progress value-added veterinary services

Now that we’ve identified a veterinarian role and a market, how does a veterinarian find these clients? Several strategies can improve your ability to reach these producers wherever you are in this process.

There are two ways to grow a client base. Find the client, or the client finds you. The following suggestions offer ways to find and reach out to O/A producers in your area and ways in which O/A producers may be more likely to see you and your services. A number of these strategies go hand-in-hand.