For decades, policymakers have tried to ensure that small and medium-sized farms have a chance to not only survive, but thrive. Yet, with labor, financial and other challenges, farms have continued to consolidate in the U.S. with 15 percent of the crop farms controlling 80 percent of the output.

Why have farms in the middle continued to decline in number? New research indicates that 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.

Over the last year, Aimpoint Research has worked to identify who will be the farmer of the future by analyzing industry trends, in-depth surveys back to 2002, in-person farmer focus groups, psychographic and attitudinal feedback and wargaming exercises.

“As the agriculture industry continues to transform, we set out to answer two very important questions with our research. Who are farmers of the future and what will they require of us?” explains Brett Sciotto, CEO of Aimpoint Research, a global marketing research and competitive intelligence firm.

Brett Sciotto

Aimpoint Research CEO Brett Sciotto

Through extensive psychographic segmentation, Aimpoint Research identified five farmer profiles that exist today, and the characteristics that set them apart.  

“We thought it was important to look at both internal and external factors impacting the farmers of the future because both play a role in determining future success,” says Sciotto. “Some farmers think success is almost entirely dictated by external factors like commodity prices and government regulations while others told us they were going to succeed no matter what was thrown at them.”

Sciotto described the 5 farmer profiles and their different characteristics:

Independent Elites:Representing about 20 percent of the grower universe, they are growth-oriented and “have largely made it to the top of the mountain.” Their growth orientation is very high, business IQ is above average and financial health is above average. They tend to be more optimistic about agriculture and they don’t see as much importance in safety nets and farm bill programs. They are long-term, business-focused planners and over half expanded their operations over the last couple of years. Nearly 51 percent have succession plans in place, while 39 percent have bachelor’s degrees. This group tends to be financially sound. They can afford and are earlier adopters of technology. They believe they can profit no matter what the commodity prices or what the government may throw at them. They tend to be pretty independent. They are consistent and reliable and at the top of their game.

Enterprising Business Builders: They represent about 21 percent of the growers surveyed and have the highest priority on growth out of all five groups. They are the least traditional and the least change-resistant. With a keen focus on growth, they are willing to try whatever it takes so they are climbing up that mountain as fast as they can. This group is highest in business IQ, they are sophisticated marketers, financially healthy and off the charts in their willingness to innovate and adopt new technology. Sixty-four percent of these operations grew over the last five years.  These operatives are highly collaborative and more willing to conduct business online.

Classic Practitioners:This group, representing 24 percent of the growers surveyed, still want to grow and be successful, but they are struggling. They have become somewhat negative. They believe success is not fully in their control. They tend to be more traditional, rely more on safety nets and farm bill programs. They lack some of 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 want to grow but they lack some of the fundamentals to adapt in a changing environment. They are the most loyal to their suppliers of any group. They like the practice of farming more  than the business of farming. This is where you start to see a real shift in mindset compared to the first two groups who believe they can be successful no matter what commodity prices are.

Self-reliant Traditionalists: This group has been through the ups and downs of the farm economy before and are just trying to hold on to what they have. Representing 22 percent of the survey sample, they’ve saved a lot of money and tend to be cash-funded. They are short-term thinkers, not planners. They’ve kind of given up on the idea of expanding their operation. They’ve been through tough times before and think they’ll survive it again. These tend to be smaller operations and the owner/operators are less educated. They do not value technology or innovation.

Leveraged Lifestylers:They think they’ve done everything right and the world is stacked against them. Representing about 14 percent of the grower universe, they are just trying to survive and think their profitability is completely tied to markets recovering and government reducing regulations and providing more supports for them. They tend to love the lifestyle of farming but not really have the business sense to navigate it. They have all the latest and greatest stuff, which adds to the financial pressure. They tend to be short-term thinkers, impulsive decisionmakers, and are skeptical of the industry. They recognize that they are likely to fail if they don’t change, but they don’t really know how to do it. This group is the most vulnerable, Sciotto adds.

Determining who is most likely to succeed in the future goes beyond simply understanding the profiles of today’s farmers, according to Sciotto.

“Aimpoint Research, along with a collaborative group of clients and ag industry leaders, looked to the future through wargaming exercises. Through the wargaming, we were able to predict the conditions most likely to define agriculture in the future, and in turn, match the farmer segments with the traits needed to successfully navigate those industry shifts,” explains Sciotto.

Family farming chartEssentially, the top two personalities out of these five are seeing the most success, Sciotto says.

“When we think about the grower segments of today, who is having the most success and the attributes that will be required in 2040, it becomes very clear who will be the farmers of the future. The differentiators really boil down to business IQ, adaptability, drive to succeed, collaboration and willingness to sacrifice some independence. When we look at the five farmer segments and the groups that embody those traits, the Enterprising Business Builders are most likely to lead the industry, with the Independent Elites continuing to find success,” says Sciotto.  

He believes that when you couple the psychological differences they identified with a look at some of the changing dynamics in food and agriculture, it’s easier to see why not only growers but their trade associations, checkoff boards and supply chains will need to change, too.

“We have to acknowledge as an industry that we are going to serve a bifurcated market. We are going to have large, sophisticated vertically-integrated operations run by high business IQ farmers and we are also going to have small, direct-to-consumer operations serving their niche.”

“From this day forward, supply chains will want to differentiate. They will cater to consumers and will ensure that the entire supply chain meets certain standards that can back up their marketing claims. This is where transparency and traceability - all the way from the farm and through the process of bringing a product to a consumer - is only going to put additional demands on agriculture,” Sciotto adds.

“We see retailers and food companies wanting to work with as few food producers as they can. They will want to work with larger operations because ultimately, it reduces their risk. And it reduces the threat to ensuring that they can make a claim in their product marketing. Farmers of the future must build a collaborative relationship with the supply chain they want to serve. 

“If you want to be a producer who can sell into these supply chains at a premium then you are going to have to adapt and grow to scale, otherwise you will be left behind.”

Sciotto says agribusinesses who serve traditional agriculture will have to move faster and add value in new ways. 

“The concept of one-size-fits-all is fading in farm channels. The farms of the future will be diverse, have different needs and will look to their vendors and suppliers to provide tailored solutions and to be constantly innovating.”

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