Digging Deeper...
/Technological developments in agriculture have been influential in driving changes in the farm sector of the U.S. economy. Innovations in animal and crop genetics, chemicals, equipment and farm organization and operation have enabled continuing output growth without adding much to inputs. As a result, even as the amount of land and labor used in farming has declined, total farm output tripled between 1948 and 2019. The latest USDA agricultural census counts 3.4 million producers or “the farmers and workers involved in making decisions on these farms – from planting to harvesting to marketing.” This category could refer to the farm’s owner, a member of the owner’s family, a manager, a tenant, a renter or a sharecropper. Indeed, there are plenty of profiles focusing on farmer and rancher age, gender, size and location of the farm, number of generations working a farm property, and analyses of their productivity, profit, loss and so on. But until just recently there has not been much investigation into farmers’ psyche and character.
Dennis McLaughlin, McLaughlin Writers LLC – Sources: USDA Economic Research Service using data from USDA National Agriculture Statistics Service (Censuses through 2017) and USDA’s Farms and Land in Farms: 2021 Survey (updated February 2022); Agricultural Retailers Association’s 2022 ARA Conference & Expo (December 2022); Aimpoint Research, Columbus, OH.
New Research Dives Deeper Into Farmer Psyches
It's time to move beyond conventional stereotyping when defining who a farmer is. That was the message coming out of the Agricultural Retailers Association’s 2022 ARA Conference & Expo (December 2022), attended by more than 600 ag retail industry professionals. “Ag retailers are expected to serve customers in new ways, be leaders in technology and find higher efficiencies in their business,” said Margy Eckelkamp, editor of Farm Journal’s The Scoop.
The job of agricultural retailers and dealers is getting tougher. It’s complex enough to deal with Business 101 matters like inventory, profit margins, supply chains, inflation and employee issues. Now, say consultants in the ag retail field, their customers are changing. As technology gets a firmer grip on agriculture operations, Future Farmers of America may be more recognizable from their wearable electronic trackers, sensors and monitors than the iconic FFA blue jackets.
ARA board chair Ian McGregor with The McGregor Company, Warden, WA, said in his keynote address, “As trends like consolidation and technological innovation continue to change the dynamics in our industry, we must be looking ahead to collect the critical tools and knowledge needed to meet the needs of farmers for years to come.”
Other ARA speakers and panelists echo similar sentiments. Farmers play a significant role in the economy, even though farms account for less than one percent of the value added to the national GDP, farm products contribute heavily to other parts of the economy – including manufacturing, restaurants, retail, notes the Bureau of Economic Analysis. “Understanding who they are and why they grow what they do is integral to understanding their role in the overall in the U.S. and global economy.”
A Different Slant
Brett Sciotto, CEO, Aimpoint Research, presented new findings on who the future farmer-customers will be and how they will drive changes in ag retail. Aimpoint, based in Columbus, OH, is a global, strategic intelligence firm that specializes in in agri-food.
U.S. farms continue to consolidate, with 15% of crop farms controlling 80% of output. Last year as it studied the situation, Aimpoint uncovered a unique perspective on farmers: Some of the most important indicators of farm financial success may not be the size of the farm, but the personality type, skill sets and ambition of the operator. “As the agriculture industry continues to transform,” Sciotto said, “we set out to answer two very important questions. Who are farmers of the future and what will they require of us?”
Sciotto explained it is important to look at both internal and external factors impacting farmers of the future because both play a role in determining future success. “Some farmers think success is dictated by external factors like commodity prices and government regulations, while others think they will succeed no matter what is thrown at them.”
Aimpoint developed five farmer profiles describing innate traits and characteristics that played a role in determining future success:
Independent Elites: Representing about 20% of the universe, they are successful, smart and financially sound. They can afford to be early adopters of technology and management practices that give them a competitive advantage. They are innovative, open to change and secure in their knowledge. They see significant opportunity in the current environment and believe success is within their control. Over half expanded their operations over the last couple of years.
Enterprising Business Builders: Representing about 21% of those surveyed, their highest priority is growth. They are sophisticated marketers, financially healthy and willing to innovate and adopt new technology. This group is confident they can make a profit in any market. They seek advice, best practices and collaboration from anyone who can help make them better operators. They are willing to leverage outside investors and borrowed money to expand their operations.
Classic Practitioners: Representing 24% of growers, they want to be successful but are struggling. They rely more on safety nets and farm bill programs. They lack the business IQ to get to the next level. They tend to save money rather than invest money. They are slower to adopt technology and management practices. They are the most loyal to their suppliers of any group. They like the practice of farming more than the business of farming.
Self-reliant Traditionalists: Representing 22%, they’ve saved money, are short-term thinkers, not planners. They are not expansion-minded, they believe they’ll survive hard times. These tend to be small owner/operators and less educated. They do not value technology or innovation.
Leveraged Lifestylers: Representing about 14%, they think their profitability is tied to markets recovering and government reducing regulations and providing more supports. They love the farming lifestyle but don’t have the business sense to navigate it. They have all the latest tech and equipment, which adds to the financial pressure. They are short-term thinkers, impulsive decision makers. They understand they could fail if they don’t change, but they don’t know how to do it.
Learn more at www.aimpointresearch.com/thought-leadership/farmer-of-the-future