As the ag economy continues to struggle under the weight of low commodity prices and decreasing land values, farmers are looking to find ways to cut expenses and to weather the current downturn. One concern for ag retailers is that farmers will cut costs by choosing cheaper seed and by reducing how much fertilizer and crop protection products they purchase this growing season.
As ag retailers look to plan for their financial future, new research conducted by Millennium Research and commissioned J.L. Farmakis, Inc., could help them prepare for the extent to which growers are reacting to low commodity prices.
In the study conducted in February, farmers shared what strategies they plan to employ to survive the downturn in 2016.
Among the findings of the Farmer Speaks Study are:
- Half of the farmers surveyed are seeking off-farm employment
- 74 percent will switch to generics or change brands of crop protection products
- No new equipment purchases will be made by 37 percent of the farmers
- Reduced traits in seeds and changes in fertilizer practices were significant.
- Increased attention to marketing aims to raise revenue through better prices
The findings represent a significant change in how farmers have been doing business. Bill Farmakis, president of J.L. Farmakis, Inc. said that shifts of this magnitude have not been seen since the 1980s.
"There are a few of us who are around who recall those difficult times. We invested this year in the study to discover what farmers are doing today to adapt to the present reality," Farmakis said. "Our goal was to help better understand what farmers are thinking, so that our media partners, their advertisers and growers can work together to address the changes as they happen."
The initial study was conducted with 160 growers primarily in the Midwest, but also with farmers from other agriculture areas around the county. A follow-up Farmer Speaks study is being planned with Millennium Research with an expanded farmer panel later this year.