1. 10 th Annual Crop Insurance Conference January 2003

2. Traditional Family farm customers are disappearing –Consolidation of Ag –Number of farms in ND is declining

3. Center for the Study of Rural America, FRBKC The Twin Challenges in Farm Country Half of farm-dependent counties lost population in the 1990s. Three-fourths of farm counties have sub-par economic growth. Mark Drabenstott Center for the Study of Rural America

4. Figure 2. Percent Change in Total Population for the U.S. by County: 1990 to 2000

5. Figure 13. Percent Change in Persons Ages 20 to 24 for the U.S. by County: 1990 to 2000

6. North Dakota Population Pyramids by State and County: 1980, 1990, and 2000

7. Change in Farm Youth, <18 North Dakota, 1970 to 1997 -46.6% -48.8% 1970 to 1997 -81.7% Source: Bureau of the Census, Census of Population 1970, 1980, 1990 Prepared By: North Dakota State Data Center -32.9%

8. Farms and Farm Size in North Dakota Source: USDA, National Agricultural Statistics Service, Census of Agriculture. North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - Fax: (701) 231-9730 - URL: http://www.ndsu.edu/sdc

9. Where Farmers Live in North Dakota Source: USDA, National Agricultural Statistics Service, Census of Agriculture. North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - Fax: (701) 231-9730 - URL: http://www.ndsu.edu/sdc

10. Working off the Farm in North Dakota Source: USDA, National Agricultural Statistics Service, Census of Agriculture. North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - Fax: (701) 231-9730 - URL: http://www.ndsu.edu/sdc

11. Who Are Your Future Customers? Segmentation of markets is occurring –Lending

12. Who Are Your Future Customers? How do lenders tailer products? –Profiling (scoring/screening) –Obtaining more info about you –Selling is key part of job

13. Who Are Your Future Customers? Goal is to sell up

14. Rural Residence Farms Limited-resource. Any small farm with gross sales less than $100,000, total farm assets less than $150,000, and total operator household income less than $20,000. Limited-resource farmers may report farming, a nonfarm occupation, or retirement as their major occupation Retirement. Small farms whose operators report they are retired (excludes limited-resource farms operated by retired farmers). Residential/lifestyle. Small farms whose operators report a major occupation other than farming (excludes limited-resource farms with operators reporting a nonfarm major occupation).

15. Intermediate Farms Farming occupation/lower-sales. Small farms with sales less than $100,000 whose operators report farming as their major occupation (excludes limited-resource farms whose operators report farming as their major occupation). Farming occupation/higher-sales. Small farms with sales between $100,000 and $249,000 whose operators report farming as their major occupation.

16. Commercial Farms Large family. Farms with sales between $250,000 and $499,999. Very large family. Farms with sales of $500,000 or more. Nonfamily. Farms organized as nonfamily corporations or cooperatives, as well as farms operated by hired managers. In analyzing the farm operator household, this group is excluded.

17. Farms Land Operated Value of Production Source: 2000 ARMS, USDA Intermediate Commercial Rural residence Share of farms, land operated, and value of production by typology group

18. Sources of operator household income by farm typology, 2001-02 Source: ARMS/USDA 2001 2002 2001 2002 2001 2002 2001 2002 -20 0 20 40 60 80 100 120 140 Off-farm income Farm income Rural residence Intermediate Commercial All farms

19. Who are Your Future Customers? Are you insuring acres or households?

20. Who Are Your Future Customers? Who is your customer? –Many work off-farm, do not have time for details, paperwork –Consumers shop online –Your customers are shopping also –Weather, crop, and livestock insurance online

22. Farmers’ Use of Internet

23. Types of products sold through electronic commerce Type of ServicePercent Feed Seed Grain Crop services Consulting Crop inputs machinery Parts Breeding stock Financial 8.3 5.6 2.8 2.8 5.6 61.1 41.7 2.8 25.0 0

24. Who Are Your Future Customers? RMA and private sector provides you with a range of products, need to see where they fit!

25. Who Are Your Future Customers? Bundling of services becoming important –Less concerned about competing with other agents –More concerned with agribusiness concentration