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Implications of Demographic Change: who will be your future customer. 10 th Annual Crop Insurance Conference. Cole Gustafson & Richard Rathge Dept. of Agribusiness & Applied Economics. January 2003. Traditional Family farm customers are disappearing Consolidation of Ag - PowerPoint PPT Presentation
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10th Annual Crop Insurance ConferenceJanuary 2003
Traditional Family farm customers are disappearing
Consolidation of AgNumber of farms in ND is declining
Center for the Study of Rural America, FRBKCThe Twin Challenges in Farm CountryHalf of farm-dependent counties lost population in the 1990s.Three-fourths of farm counties have sub-par economic growth.Mark DrabenstottCenter for the Study of Rural America
Figure 2. Percent Change in Total Population for the U.S. by County: 1990 to 2000
Figure 13. Percent Change in Persons Ages 20 to 24 for the U.S. by County: 1990 to 2000
North Dakota Population Pyramids by State and County:
1980, 1990, and 2000
Farms and Farm Size in North DakotaSource: USDA, National Agricultural Statistics Service, Census of Agriculture.North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - Fax: (701) 231-9730 - URL: http://www.ndsu.edu/sdc
Where Farmers Live in North DakotaSource: USDA, National Agricultural Statistics Service, Census of Agriculture.North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - Fax: (701) 231-9730 - URL: http://www.ndsu.edu/sdc
Working off the Farm in North DakotaSource: USDA, National Agricultural Statistics Service, Census of Agriculture.North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - Fax: (701) 231-9730 - URL: http://www.ndsu.edu/sdc
Who Are Your Future Customers?Segmentation of markets is occurringLending
Who Are Your Future Customers?How do lenders tailer products?Profiling (scoring/screening)Obtaining more info about youSelling is key part of job
Who Are Your Future Customers?Goal is to sell up
Rural Residence FarmsLimited-resource. Any small farm with gross sales less than $100,000, total farm assets less than $150,000, and total operator household income less than $20,000. Limited-resource farmers may report farming, a nonfarm occupation, or retirement as their major occupation
Retirement. Small farms whose operators report they are retired (excludes limited-resource farms operated by retired farmers). Residential/lifestyle. Small farms whose operators report a major occupation other than farming (excludes limited-resource farms with operators reporting a nonfarm major occupation).
Intermediate FarmsFarming occupation/lower-sales. Small farms with sales less than $100,000 whose operators report farming as their major occupation (excludes limited-resource farms whose operators report farming as their major occupation).
Farming occupation/higher-sales. Small farms with sales between $100,000 and $249,000 whose operators report farming as their major occupation.
Commercial FarmsLarge family. Farms with sales between $250,000 and $499,999.
Very large family. Farms with sales of $500,000 or more.
Nonfamily. Farms organized as nonfamily corporations or cooperatives, as well as farms operated by hired managers. In analyzing the farm operator household, this group is excluded.
Share of farms, land operated, and value of production by typology groupFarmsLand OperatedValue of ProductionSource: 2000 ARMS, USDAIntermediateCommercialRural residence
Sources of operator household income by farm typology, 2001-02Source: ARMS/USDA20012002200120022001200220012002-20020406080100120140Off-farm incomeFarm incomeRural residenceIntermediateCommercialAll farms
Who are Your Future Customers?Are you insuring acres or households?
Who Are Your Future Customers?Who is your customer?Many work off-farm, do not have time for details, paperworkConsumers shop onlineYour customers are shopping alsoWeather, crop, and livestock insurance online
Farmers Use of Internet
Types of products sold through electronic commerce
Who Are Your Future Customers?RMA and private sector provides you with a range of products, need to see where they fit!
Who Are Your Future Customers?Bundling of services becoming importantLess concerned about competing with other agentsMore concerned with agribusiness concentration