Top Management Challenges in the Next 5 Years Profitability 9% 9% 0% Management 23% 32% Marketing 42% 19% 1998 2003 2008 7% 10% 12% 9% 5% 5% 5% 6% 7% 15% 3 Price vs. Convenience Relative to price, the value of convenience has climbed in importance for producers. One of the most significant findings of the 2008 survey, the Purdue economists say, is that producers gener-ally place less emphasis on price in relation to conve-nience, which in some cases may mean they choose the 50% supplier that is “easiest to do business with,” Boehlje and Gray surmise. The larger their businesses, the more produc-ers place almost equal weight on price, product performance and convenience/location, followed closely by customer service. Environment Labor 9% Succession 0% 25% Percentage of respondents corn and soybean growers expected growth, and in 2003, 34 percent expected to grow their opera-tions, but in 2008, only 16 percent were looking to expand. Purdue ag economists Allan Gray, Ph.D., and Michael Boehlje, Ph.D., say this could be due to a combination of factors, including satisfaction with current size and profitability, capital and manage-ment constraints, and overvalued land. The exception to the growth trend, the econo-mists add, is an indication by the largest producers that they are still looking to grow. Their responses indicate farmland consolidation will continue, but at a slower pace than in the recent past. 4 Loyalty Generally, producers consider themselves to be loyal to their primary local suppliers of expend-able ag inputs — a finding that was stronger than the Purdue team expected. More producers than in the past said they consider themselves loyal to input brands, although that preference is still trumped by loyalty to suppliers. When considering the opinions of retailers on these topics, producers and retailers generally agree on the level of loyalty to crop nutrients suppliers, say the economists, as well as the perception of loyalty to seed brands. Producers feel more loyal to crop protection brands than retailers tend to believe, they add. 2 Marketing and Management Needs Producers, particularly those with larger opera-tions, expressed a greater need than ever for marketing and management advice, according to the survey results. When asked about their top management challenges in the next five years, producers indicated profitability continues to lead the list, although less so in 2008 than in 2003. But marketing and management needs drew more than double the response from five years earlier. “Agronomics — planting, harvesting, crop protection — that’s the fun, easy part,” one survey respondent said. “The tough part is the strategic part of the business.” Large producers also indicated they are em-ploying more of all types of risk management tools and are using them more frequently. “Miti-gating risk is all I think about and read about,” commented one participant. •• WEIGH IN •• Read more about the producer survey and provide your own input at www.chsinc.com/c. 5 Quality All size, enterprise and age groups surveyed reported they prefer supplier salespeople to be honest and technically competent over other possible attributes. Producers look for the sales personnel to provide relevant, timely information and good follow-up service. About 60 percent of the producers agreed there are significant differences in quality of services from one local supplier to another, but that makes less of a difference in buying decisions than in the past, particularly for large producers. WWW.CHSINC.COM 24 March/April 2009