1. Channel Challenges: Redefining Roles and Structure? Dr. Maria Marshall Dr. Jay Akridge Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

2. Channel Challenges: Redefining Roles and Structure? Our focus: –Will be on the ‘dealer’ level of the channel –What does the Commercial Producer Project tell us about: Current position of dealers Role of services and information Future opportunities/challenges Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

3. Channel Challenges: Redefining Roles and Structure? Current Position of Dealers Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

4. Dealer Influence on Purchase Decisions How important are dealers as influencers of input decisions? How do commercial producers view dealers as sources of information? How have these attitudes translated into: –Loyalty to dealers –Value of dealers Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

5. Influence Outside the Farm on Purchases of Expendable Items (by size) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

6. Influence Outside the Farm on Purchases of Expendable Items (by use of consultants) * Significantly different at p<.05 ** Based on consultants specified in 2003 questionnaire Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

7. Influence Outside the Farm on Purchases of Capital Items (by loyalty to capital brands) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

8. Influence Outside the Farm on Purchases of Expendable Items (by year) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

9. Influence of Dealers on Input Decisions In general, commercial producers rate dealers the most important off-farm influencer of input decisions –Larger the producer, the less important –More important to crop producers, relative to livestock producers –Less important to those hiring consultants –More important to brand loyal producers –Relative position little changed since 1998 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

10. Usefulness of Information Sources (by size) All significantly different at p<.05 ** Livestock only Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

11. Usefulness of Information Sources (by use of consultants) * Significantly different at p<.05 ** Livestock only Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

12. Usefulness of Information Sources (by year) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

13. Usefulness of Dealer Information In general, commercial producers rate dealers/dealer personnel their highest quality off-farm (personal) source of information Producers who use consultants rate all sources of information higher Rating of dealers very stable over time Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

14. I consider myself loyal to my primary local suppliers of expendable items (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

15. I consider myself loyal to my primary local suppliers of expendable items (by expendable brand loyal) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

16. I am willing to pay slightly more to buy my inputs from locally owned suppliers (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

17. I am willing to pay slightly more to buy my inputs from locally owned suppliers (by local expendable supplier loyalty) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

18. Dealer Loyalty and Value There is a group of commercial producers who – Consider themselves loyal to their local supplier The larger the producer, the lower the self- reported loyalty Dealer loyalty related to brand loyalty –Are willing to pay more for locally owned suppliers Larger the producer, less likely to agree Younger producers less likely to agree than older producers Strong link to loyalty to local supplier Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

19. Channel Challenges: Redefining Roles and Structure? Providing Services and Information Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

20. Providing Services and Information How much difference do commercial producers see in the quality of services dealers provide? How is the use of custom services by commercial producers changing? How much difference do commercial producers see in the quality of information dealers provide? Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

21. There are often significant differences in the quality of services from one local supplier to another (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

22. Custom Hired Fertilizer Application (by size)* Not significantly different at p<.05 * Crops only Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

23. Custom Hired Pesticide Application by Commercial Crop Producers (by year) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

24. Custom Hired Livestock Waste Handling (by size)* Significantly different at p<.05 * Livestock only Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

25. Providing Services Commercial producers see important differences in the quality of services provided across local suppliers –Larger producers most discriminating Custom services important to all sizes of producers –Custom fertilizer application trends stable, some reduction in custom pesticide application Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

26. There often are significant differences in the quality of information from one local supplier to another (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

27. I often know more about many input products than my local suppliers (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

28. I often know more about many input products than my local suppliers (by year) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

29. Providing Information Commercial producers see differences among local suppliers in quality of information –Larger producers most discriminating –Larger producers tend to believe they know more than local suppliers –Trend towards stronger feeling on this issue Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

30. Channel Challenges: Redefining Roles and Structure? Future Opportunities and Challenges Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

31. Future Opportunities and Challenges How much time is invested in input purchase decisions? How do commercial producers view single source supply strategies? How does Internet use affect attitudes toward dealers? Do commercial producers want a more direct relationship with manufacturers? Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

32. I am spending more time evaluating new technology for use in my farming operation than I did five years ago (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

33. Opinions About Time Investment and the Buying Process (by year) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

34. I prefer to buy most of the expendable items I need from one supplier (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

35. Usefulness of Information Sources (by Internet use) All significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

36. I am willing to pay slightly more to buy my inputs from locally owned suppliers (by Internet use) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

37. In the next five years, I want a more direct relationship with manufacturers of expendable items (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

38. In the next five years, I want a more direct relationship with manufacturers of expendable items (by planned growth) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

39. Opportunities and Challenges Time invested in input decisions represents an on-going opportunity Larger producers less likely to pursue single-source supply strategies, BUT –Rewards to generating loyalty apparent Internet users value information, BUT –Find dealers less important Larger producers want a more direct relationship with manufacturers, as do high growth operations Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

40. Channel Challenges: Redefining Roles and Structure? Dealer Summary: –Many positive signals, commercial producers see dealers as value- adding, BUT –Many signals point to on-going pressure: Size, growth, Internet use, technology Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

41. Channel Challenges: Redefining Roles and Structure? Additional Charts Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

42. Influence Outside the Farm on Purchases of Expendable Items (by age) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

43. Influence Outside the Farm on Purchases of Expendable Items (by loyalty to expendable brands) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

44. Influence Outside the Farm on Purchases of Capital Items (by size) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

45. Influence Outside the Farm on Purchases of Capital Items (by year) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

46. Usefulness of Information Sources (by age) * Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

47. I consider myself loyal to my primary local suppliers of capital items (by size) Not significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

48. Custom Hired Fertilizer Application by Commercial Crop Producers by Year Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business

49. In the next 5 years, I want a more direct relationship with manufacturers of capital items (by size) Significantly different at p<.05 Source: 2003 National Conference for Agribusiness, “Serving Commercial Producers: Meeting Needs, Adding Value” Center for Food and Agricultural Business