Southern Spotlight: Price and Value

James Banahan

James Banahan

There’s price shopping and there’s value shopping—and there’s a difference between the two.

When we price shop, we look for the lowest price available, and what we buy when we price shop we regard as a consumable: something that we buy, use, and discard.  Then we repeat the process.  Price shopping is what big box stores, like Walmart, thrive on.

When we value shop, we, of course, still shop with price in mind, but instead of looking for the lowest price available, we consider the value as well.  This type of shopping sometimes takes a little more thought, but because of this, what we buy when we value shop we tend to regard as an investment.  Value shopping is what has allowed mom and pop stores to survive in face of the juggernaut Walmart one town over.

Where I live in rural Kansas, we have two grocery stores in the county: one in Belleville and one in Cuba.  We also have a Walmart 20 miles away.  I will tell you, the steaks are cheaper at the Walmart.  If I was a price shopper, that’s all I’d need to know.  I’d gas up my truck and make that 40 mile round trip and an hour later be back home with a few New York strips wrapped all pretty in their cellophane.  But I’m a value shopper.  I pay a little extra for the steaks from my grocer, who cuts them fresh on site and on demand and sends them home in nice white paper.  I pay a little extra to save the hour trip, because there are better ways to spend my time.  And I’ve done the math to know: when I factor in the gas money it takes me to get to Walmart, the price difference between their steaks and my grocer’s isn’t as much as the sticker numbers might first suggest.


We need to consider how, where, and why we purchase our inputs similarly.

There are many big companies in agronomy and, like Walmart, their allure is in their low prices.  What the local co-op sells for $500 per ton they sell for $480.  At first glance, it seems like a total no-brainer: save $20 per ton, shop at the big box.  That’s price shopping.

But what if we went value shopping?  So the co-op has a higher price: what benefits might come along with paying the extra money?  Well, for starters, you get access to the services that the co-op provides: assistance with marketing your grain, advice and guidance on fertility, and farm planning, just to name a few highlights.  You enter into a relationship with a business partner who is not just selling products, but actively testing them for their benefits, usefulness, and quality.  You gain a nimble partner who can adjust to meet niche needs.  And this is all tailored specifically to your community, your situation, for your convenience and for the health and prosperity of your local economy.

Which is all very nice, right?  Pay a little more, get better service and sustain your community.  But if you can’t shake the thought I’m still paying more! then read on.

As I said, when I factor in gas money, my grocer’s steaks and Walmart’s are quite a bit more evenly priced than they first appeared.  It’s oh-so-easy to suffer price blindness and just lunge at the lower number, but a step back and a 30,000 foot view reveal a different picture.  Patronage to your local co-op provides a 3% return historically, so that $500 you just spent there?  $15 is coming back to you soon.  With this one small step, the $20 difference between big box and co-op is reduced to $5.  Just as with the steaks, a little investigation into the mathematics of value reveals the initial deception in the price.

Patronage of your local co-op is an investment into your community and your operation.  Sure we sell products, but we’re also in the business of supporting our growers with additional advice, guidance, and knowledge, and in the business of sustaining the local communities that house us.  We strive to offer a fair price, but make it our mission to always provide the greatest value.