Although final yield forecasts have decreased in recent weeks, farmers this fall are pulling in bumper crops – and higher profits.
When the combine dust settles, 2022 net farm income is forecast to be up approximately 5 percent compared with last year. In fact, adjusted for inflation, U.S. net farm is expected to be more than 40 percent above its 20-year average (2002–21). Consequently, this past year price – and brand loyalty – were not as important to growers as being able to get what they needed when they needed it.
Preparing for what’s next
Agriculture is – and always will be – a cyclical business. Commodity prices this year were fueled by comparatively tight global supplies, adverse weather, strong global demand and disruptions in food supplies stemming from Russia’s war in Ukraine.
Despite today’s profitability, though, challenges lie beyond the horizon. The Congressional Budget Office and USDA forecast above-average commodity prices through next year, followed by lower average prices down the road. Farmers who weather the cycle will be those who strive for efficiency and keep an eye on production costs. As an ag marketer, how can you prepare for what’s ahead?
It begins with your brand
Successful marketing requires that we understand, anticipate and meet our customer’s needs better than anyone else. According to the Harvard Business Review, strong brands deliver fundamental elements of value that address four kinds of needs: functional; emotional; life changing; and social impact. Generally speaking, brands that address more of these needs than their competitors earn higher customer loyalty – and see increased revenue growth.
To articulate the value your brand provides, we believe it’s important to develop messaging that uses grower-speak to answer three fundamental questions:
- What does your product (or service) deliver that will help the grower be more successful?
- Why does (or should) that matter to the grower?
- How does it work (for the grower)?
Informed by our 50+ years of experience in ag, we believe that understanding how to market to farmers across the cycle includes understanding evolving grower buying patterns and fine-tuning strategies accordingly. When commodity prices decline, farmers set stricter priorities and reduce their spending. Today, while commodity prices are high, is the perfect time to develop fresh, reputation-building communications of how your brand can help farmers be more successful in 2023, and beyond.
Learn more about how to adapt and thrive in a changing agricultural landscape from our Reshaping the Future series.