The Farmer Farm Segments Chapter 6 The Farmer

The Farmer & Farm Segments Chapter 6

The Farmer • The avg. age of farm operators in 2002 was 58 • Many have accumulated/consolidate d their operations over time • Many have multiple generations involved in the farm • Avg. age of farmers has stabilized after a 50 year increase

The Farmer Cont. • Technology development and rapid adoption of new practices has: – Shrunk the number of commercial farm units – Increased the total output • Experience and knowledge of the farmer is what’s required to remain viable in the 21 st century

Farming Over the Years 1930’s- Great Depression 1940’s- post WWII boom 1950’s & 60’s- Stress 1970’s- Inflation of land values & commodity prices • 1980’s- Sharp deflation values • 1990’s- Improvement in the economic health of production agriculture & the loan deficiency payment (LDP) years • •

Farms • No longer a typical or average “farm” • By the numbers: – 6. 8 million farms in 1932 – 2. 2 million farms in 1990 – 1. 9 million farms in 1997 – 2. 1 million farms in 2001

Income Classes • Drastic changes in income classes over the century • Number of small farms (less than $40, 000 gross farm income) increased greatest • Number of large farms (in the $250, 000+ income category) also had a large increase

Changes in Farms • Profit margin from farming has been under continual pressure • Many farm operators have opted for “off farm” income for support • Others have expanded with the adoption of new technologies in crop/livestock production that grow production units without additional labor

Beginning Farmers • Farmers rarely relocate • The capital requirement to enter farming inhibits a young person from simply starting up • To enter the full time commercial farmer group & generate household income may require min. $2 million of capital investment

Farm Structure • Generally ag producers earn less than a 5 % average return capital investment • Farm structures are changing to meet financial needs • Many farms are made up of multiple households and average 2. 8 decision makers per farm • Farm broadcasting serves and targets this demographic

Farms by the Numbers • 2001 USDA revised Census counts 2, 157, 780 total farms • A farm is defined by a min. of $1, 000 in gross sales of agricultural production • Only 157, 000 farms with more than $250, 000 in gross sales • 1. 6 million farms gross less than $100, 000 per year

Farm Segment- Large Commercial Farm Operations (more than $500, 000 gross income) Early adopters of new technologies Capital intensive Utilizes outside consultants for accounting, crop scouting and marketing services • Utilizes equipment leases and financing • Heavy consumers of information and media • Utilizes Internet for in depth information and product price information • •

Farm Segment- Commercial Farms ($100, 000 -$500, 000 gross income) Diversified in crops and or livestock Traditional media consumption of radio, print and television Values relationship with dealers and suppliers Adopts technology to reduce labor requirement Uses Internet for e-mail and information gathering Does not use price as the only consideration in making a purchase • Values community relationships • May be nearing retirement (over age 65) • May be a young farmer beginning his farming quest (age 2135) • •

Farm Segment- Lifestyle Farms • (under $100, 000 gross farm income) • Represents a very powerful buying group • The most diverse and largest number of people in the agricultural community. • Many have supplemental income • Likely to raise livestock, especially cattle, sheep or horses • Often produces specialty niche crops or contract production of livestock • Values family, community and heritage • Uses the services of veterinarians and custom applicators • Willing to pay for time saving equipment or services • Less reliant on media for risk management information