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 21st
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