September 15, 2008
Survey finds large ag producers value supplier convenienceWEST LAFAYETTE, Ind. - More and more, large commercial agricultural producers are viewing their relationship with suppliers as a marriage of convenience, a Purdue University study has found.
In the 2008 Large Commercial Producer Survey, producers indicated they place greater weight on convenience and location when choosing a primary supplier than did producers who participated in previous surveys. Results from the survey, conducted by Purdue's Center for Food and Agricultural Business (CAB), will be presented during the National Conference for Agribusiness.
The conference takes place Nov. 18-19 in the Memorial Union on Purdue's West Lafayette campus. The event is intended for those who sell, service or market to agricultural producers. Conference registration is $745 per person if completed by Friday (Sept. 19), and $795 thereafter. Discounts for group registrations are available.
About 2,500 large commercial crop and livestock producers from across the country participated in the 2008 survey, said Allan Gray, a Purdue agricultural economist and interim director of CAB. The survey is conducted every five years and gauges the opinions of producers who generate $750,000 or more in annual sales in one or more of seven industry segments: corn/soybeans, wheat/barley/canola, cotton, fruit/nut/vegetable, swine, beef and dairy.
This year's survey showed a heightened interest among producers in selecting suppliers that are closer in proximity and easier to do business with, Gray said.
"Regardless of product, producers consistently gave convenience/location at least 20 to 25 points on a 100-point scale in terms of importance in their decision," Gray said. "In many cases, this factor rated higher than price and product performance."
Opinions varied when it came to supplier loyalty, Gray said.
"Generally, producers considered themselves loyal to their primary local supplier of agronomic inputs, with midsize and younger producers being more loyal than larger producers," he said. "Those producers expecting their operations to grow by more than 50 percent over the next five years are less loyal to local suppliers of agronomic products."
Producers' views on product price also were mixed.
"Farmers under 35 years old were less likely to buy at the lowest price, except for animal health products," Gray said. "High-growth producers were less inclined to buy at the lowest price for seed but more inclined for crop protection chemicals."
Other survey data revealed producer sentiment on "one-stop" shopping, quality of services/information, risk management preferences, agribusiness sales practices, crop rotation methods, organic production, hired labor and decision making, among others.
The conference's opening session will present an overview of today's large commercial producer. Subsequent sessions will address producer purchasing tendencies, what producers expect from distributors, producer brand loyalty, and how retailers and salespeople can better serve their large commercial clients.
Speakers include CAB specialists, agribusiness professionals and large-scale farmers.
Registration fees include meals and conference materials. Lodging is extra.
The Center for Food and Agricultural Business, established in 1986, provides educational opportunities for mid- to upper-level managers in the food and agribusiness sector. CAB is a center within Purdue's Department of Agricultural Economics.
Writer: Steve Leer, (765) 494-8415, firstname.lastname@example.org
Sources: Allan Gray, (765) 494-4323, email@example.com
Megan Sheridan, Center for Food and Agricultural Business, (765) 494-8151, firstname.lastname@example.org
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