Discover What Your Customer Thinks. A snapshot of the Large Commercial Producer Project
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1 Discover What Your Customer Thinks A snapshot of the Large Commercial Producer Project
2 Today s Presentation Producers Business Strategies Producers Perceptions of Risk How Do Your Customers Buy? Producers Sources of Information What Do Producers Value?
3 Introduction 2017 Large Commercial Producer (LCP) Survey to understand the buying preferences of large-scale producers when interacting with agricultural salespeople, retailers, lenders and manufacturers. Mail, Phone, Web 1,300+ total respondents 6 commodities: Corn/Soybean, Wheat/Barley, Fruits/Vegetables, Dairy, Cattle, Swine
4 Farm Size 2012 Census of Agriculture - Farm Classifications Farm Sales Categories Small farms Low sales < $150,000 Moderate sales $150,000 - $349,999 Mid-size farms $350,000 - $999,999 Large-scale farms LCP Farm Size Categories Mid-size Large $1,000,000 - $4,999,999 Commercial Very large > $5,000,000 Large
5 ME 4
6 Today s Presentation Producers Business Strategies Producers Perceptions of Risk How Do Your Customers Buy? Producers Sources of Information What Do Producers Value?
7 Management Factors to Farmer Success People 19% 14% 14% 14% 39% Production 34% 26% 22% 13% 5% Costs 36% 28% 20% 11% 5% Output Prices 9% 16% 20% 26% 29% Land, Equipment, and Facilities 13% 16% 23% 31% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Ranking: (1 is the most important)
8 Managing Cost (36%) Number one Followed by Managing Production (34%) Decision-making focus on managing economic productivity From a crop perspective - managing cost per bushel
9 Managing Output Prices (9%) Not designed their farms to be successful based on the hope that they would receive consistently from high prices SUCCESS is based on factors they can control
10 Younger generation (18-39) see people management as a critical part of their farms success People 31% Costs 29% Production 23% Prices 10% Capital 8%
11 Today s Presentation Producers Business Strategies Producers Perceptions of Risk How Do Your Customers Buy? Producers Sources of Information What Do Producers Value?
12 General Areas of Risk in Today s Agriculture Production Risk (e.g., weather, pests, diseases, and technology) Marketing Risk Financial Risk Human Risk Legal Risk (e.g., commodity price volatility) (e.g., cost & availability of credit, meeting cash flow needs, and short term financial shocks (e.g., health and well-being, family and business relationships, and employee management) (e.g., contractual agreements, business organization, regulations, and public policy)
13 Preference shares representing the relative ranking of importance among the five risk categories
14 Today s Presentation Producers Business Strategies Producers Perceptions of Risk How Do Your Customers Buy? Producers Sources of Information What Do Producers Value?
15 Are All Options Compared When Making Business Decisions Marketing Production No (61%) Yes (39%) 11% 15% 9% 7% 15% 20% 10% 14% One Two Three Four or More One Two Three Four or More
16 Are All Options Compared When Making Business Decisions Obtaining Financing No (69%) Yes (31%) 6% 2% 6% 2% 11% 31% 30% 12% One Two Three Four or More One Two Three Four or More
17 Have you changed a major supplier in the past 5 years? 53% 47% Changing Suppliers No Major Supplier Changes
18 Reasons for Changing Suppliers Prices 29.1% Service Problems 21.6% Change of Staff or Salesperson Bought, Merged, or Closed Inadequate Product Selection Lack of Knowledge Product Quality or Charachteristics Billing Problems 14.0% 11.4% 9.9% 9.7% 8.9% 7.3% Other 3.6% 0% 5% 10% 15% 20% 25% 30% 35% 40%
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20 Today s Presentation Producers Business Strategies Producers Perceptions of Risk How Do Your Customers Buy? Producers Sources of Information What Do Producers Value?
21 7 Importance of Information Sources Mean Value Personal Communication Traditional Media Online Media Social Media
22 Importance of Information Sources Mean Value Personal Communication General Farm Magazines Dealer/Retailer Meetings Farm Shows Traditional Media General Farm Magazines Dealer/Retailer Meetings Farm Shows Personal Communication Traditional Media Online Media 1.98 Social Media
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27 Today s Presentation Producers Business Strategies Producers Perceptions of Risk How Do Your Customers Buy? Producers Sources of Information What Do Producers Value?
28 Price Product Performance Supplier Relationship
29 60% Animal Nutrition 50% 40% 41.1% 30% 20% 10% 20.0% 22.3% 0% 5.0% 5.4% 6.3% Perf. Price Relat. Perf. Relat. Price Price Perf. Relat. Price Relat. Perf. Relat. Perf. Price Relat. Price Perf.
30 60% Animal Nutrition 50% 40% 39% 46% 47% 30% 20% 10% 21% 22% 22% 18% 17% 15% 0% PERF. PRICE RELAT. PRICE PERF. RELAT. RELAT. PRICE PERF. Midsize Commercial Large
31 60% Seed 50% 55.5% 40% 30% 20% 24.0% 10% 0% 11.8% Perf. Price Relat. Perf. Relat. Price Price Perf. Relat. Price Relat. Perf. Relat. Perf. Price Relat. Price Perf. 4.9%
32 70% Seed 60% 50% 53% 58% 64% 40% 30% 20% 10% 0% 24% 22% 20% 14% 14% 9% PERF. PRICE RELAT. PRICE PERF. RELAT. RELAT. PRICE PERF. Midsize Commercial Large
33 Recap LCP objective: understand the buying preferences of largescale producers Consolidation and evolving strategies are shifting our business relationships National Conference objective: exploring implications of shifting buying preferences on your business
34 Program Dates November 7-8, 2017 Location Purdue University West Lafayette, Ind. Educational Credit You can earn CEU and CCA credit at this program. Discount Code ($100) WEBINAR For more information and group rates, please contact: Masi Keshavarz
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