Editor’s note: Jeff Caldwell is an agricultural content marketing manager for Lessing-Flynn Advertising in Des Moines, Iowa. The views expressed in this guest article are the author’s own and do not necessarily represent those of AFN.
Up until the last few months, US grain farmers have faced bearish grain markets that have strained revenue potential.
But those prices have turned around. Corn prices with a five in front of them and $13 per bushel-plus soybean prices have a lot of farmers breathing sighs of relief they’ve held in since about 2012. Optimism has returned to farm country.
Along with renewed optimism comes pent-up demand that’s been kept under wraps as farmers worked just to break even for years. Farmers are slowly starting to spend money on the things they held off on. But if you’re an agtech company ready for the market and hoping some of that spending might come your way, don’t start counting on new customers just yet.
Farmers who have been around for a while have been through these financial ups and downs before. And they’re the ones who have the most purchasing power, through accumulated business assets and equity.
The farm crisis in the US in the 1980s led to a lot of disappearing liquidity and lost farms. Memories like that don’t fade quickly, and rebounding prices don’t mean checkbooks will be flying open just yet.
You have to spend money to make money in agriculture, and technology is certainly part of that equation. But not every ag company will be the benefactor of five- or six-dollar corn. Even with continued news of fundamental strength to the market, farmers are still generally cautious and spending prudently and selectively in 2021.
If grain prices stay around where they are or move higher later in the year, that will likely remain the case.
If you’re competing for a piece of that farm technology spending pie, here are a five things to keep in mind as you work to market your products or service to generate real sales.
- Whether or not you’ve shared in the angst that bearish grain markets have caused farmers over the last few years, show that you understand the ups and downs farmers have faced and why they may still feel cautious about making new purchases – whether it’s a small new agronomic tool, or a big-ticket piece of machinery. Identify with your farmer customers.
- Even as farmers start to feel more confident about spending in 2021, that doesn’t mean they won’t be as practical as ever. Position what you sell as a solution to a problem your customers already face. Through things like thought leadership, demonstrate that your solution has real utility at the farm level. Make that connection early and often. The more frequently it resonates, the more confidence farmers will have in you and the solutions you can offer them. In the end, farmers will only become customers if they see that what you’re selling will help them be more successful.
- Corn prices are in the $5 per bushel range – not the $8 per bushel range like they were in the flood year in the US of 2008. Today’s prices are a major improvement over prices in the last few years, but they won’t create a lot of new millionaires in farm country. Recognize that farmers will likely approach new spending cautiously, and will focus it on things that will make incremental improvements to their bottom line. Set the bar in a realistic place and you’ll not only be more likely to achieve your goal, but you’ll also prevent the reaction most farmers have to ‘pie in the sky’ promises.
- For the last decade or so, many experts in agriculture have encouraged farmers to assemble their ‘farm teams.’ That group comprises trusted advisers like agronomists, accountants, attorneys, and farm managers who work with high-value information and data. Trust in that group is very important. If you’re able to demonstrate to your customers that you both understand their business and can offer them realistic, tangible tech solutions to existing problems in revenue-generating ways, it’ll go a long way to building that trust. That will contribute directly to sales as long as you can maintain that trust over time.
- Like any grain farmer knows, what goes up must come down. New expectations for a massive corn crop in 2021, for example, could send prices lower – while the outlook for lower soybean output could send those market prices higher. Either way, the grain markets will change in the future. Make sure you’re attentive to marketplace changes like these and what they mean to your customers, and be ready to adjust things like product pricing to prove you’re paying attention. The more proactive you can be on this front, the stronger the trust you’ll build with your customers.
One piece of advice I’ve heard repeated several times since the grain markets began their rebound: don’t always go it alone. The most skilled grain marketers out there often employ the help of professional analysts or brokers to maximize the returns of their marketing strategies.
I hear a lot of complaints from farm country about the expense of such services. But when the grain markets present opportunities like they are doing today, it’s usually worth the cost to capitalize on the rally while it lasts. As many farmers know, it doesn’t take much for things to turn around. If working with a broker — or for agtech companies, a marketing agency — helps you ‘make hay while the sun is shining,’ it’s a good call.
If you’re interested in having that conversation to help better connect with farmers to generate new sales, let’s talk.