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Agrimarketing : September 2008
Sales and Marketing Insights from Purdue University AGRI-MARKETERS TO PROFIT FROM COMMERCIAL PRODUCER SURVEY by Dr. Allan Gray A gri-marketers can better under- stand the changes occurring with large commercial produc- ers’ businesses and what they want from their agricultural input suppli- ers by exploring results from the 2008 Large Commercial Producer Survey. Conducted by Purdue University/Farm Progress Companies every five years, about 2,500 producers from across the U.S. participated in the survey. The pro- ject targets farmers with $750,000 in annual gross sales in a particular enterprise and delves into seven segments — corn/soybeans, wheat/ barley/canola, cotton, fruit/nut/ vegetable, swine, beef and dairy. Researchers at Purdue’s Center for Food and Agricultural Business are analyzing the data and finding useful information for agri-marketers. SLOW GROWTH EXPECTATIONS Despite the record profit potential for row crop and small-grain farmers, respondents are surprisingly conserv- ative about their plans for growth. In past surveys, corn/bean producers have anticipated 30% to 40% growth over a five year period. This year, these producers indicate plans to only grow by about 18% over the next five years. Obviously, pork producers anticipate the slowest growth, but interestingly, the largest pork opera- tions expect the fastest growth rates of any segment in the survey. Figure 1. Average Producer Rating for the question “I Consider Myself Loyal to My Primary Local Supplier of [Expendable Product].” Figure 2. Average Producer Rating for the question “Rate the Following Characteristics for the Best Agricultural Salesperson You Know.” WHO THE INFLUENCERS ARE Local dealers and other farmers con- tinue to emerge as the most impor- tant off-farm influencers of input purchase decisions. Local dealers were the most important off-farm influencers for capital inputs, seed and crop protection chemicals. This ranking is similar to the 1998 and 2003 results, which testifies to the strength of the agri-marketing chan- nel’s role in serving these producers. DESIRE FOR CONVENIENCE Survey results suggest a substantial increase in the weight producers place on convenience/location when choos- ing their primary supplier. Regardless of product, producers consistently gave convenience/location at least 20 to 25 points on a 100-point scale in terms of importance in their decision. In many cases, this factor rated higher than price and product performance. National Conference for Agribusiness November 18-19, 2008 Featuring the 2008 Large Commercial Producer Survey Contact Aissa Good, 765/496-3884 or firstname.lastname@example.org. Center for Food and Agricultural Business 52 AgriMarketing ¦ September 2008 MIXED PRODUCER LOYALTY More than half of producers consider themselves loyal to their primary local supplier of seed and crop pro- tection chemicals (see figure 1). However, 57% of corn/bean and 51% of cotton producers consider them- selves loyal to their primary brand of seeds. And, only 38% of corn/bean and 40% of cotton producers con- sider themselves loyal to their brand of crop protection chemicals. TRUST AND HONESTY RANK HIGH Commercial producers ranked trust at a 3.5 on a five-point scale and honesty at 3.45 when asked about the charac- teristics of the best agricultural sales- person they know (see figure 2). These two stand out as the most highly ranked characteristics in the list. COMPLETE RESULTS UNVEILED Agri-marketers can hear complete survey results at the National Con- ference for Agribusiness, set for November 18-19 at Purdue Univer- sity in West Lafayette, IN. Faculty and industry experts will explore topics such as the changing charac- teristics of commercial producers, serving multiple market segments, branding, building value, channel management, servicing producers operating above the $750,000 mark,key account management and innovative customer solutions. AM Allan Gray is the interim director of the Center for Food and Agricultural Business at Purdue University and a pro- fessor of agricultural economics.
CAMA 2008 Canada