Who is buying and renting all the land out in farm country?
To shed some light on the situation, market research firm Blacksheep Strategies did a study on behalf of a dozen agriculture industry sponsors aimed at gaining some insight into the financing, equipment and input decisions of operators of farms larger than 5,000 acres.
The results gleaned from six focus groups of 44 farmers who represented a total of 368,000 acres of cropland in the Prairies were surprising, according to Sharon Barker, director of research.
“We were really blown away by their high level of business acumen,” she said. “They were very entrepreneurial, and yet very down-to-earth kind of guys.”
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A key difference between this segment and the traditional farmer is their level of sophistication, the study found. All decisions regarding equipment, finance, inputs or grain merchandising are considered in the context of the bottom line.
Barker said the participating farmers discussed many topics including equipment, supplier relationships, critical success factors and their needs related to their growth.
Interestingly, the researchers, who tried to target large-scale farmers between 30 and 45 years of age, had to bump the age limit up to 35-50 after they found that it was too difficult to round up enough bodies in the younger age group.
To participate, the farmers also had to have expanded their operations in the past few years, and had to be “optimistic” about farming.
“These guys are. They have a CEO (chief executive officer) mentality and are very much in control. They are not bemoaning the changes that are happening. They are dealing with what comes at them rather than being victims of it,” said Barker.
With the average farm size now at 1,200 acres, the larger operators had a far different mind-set, she added.
For example, some draw the analogy of the farm as a factory.
On their farms, as on a factory floor, equipment decisions are complex and driven by both tangible and intangible factors. Further, equipment decisions are linked to growth strategies.
As one farmer put it, “we spend a lot of time thinking about how we acquire new equipment,” she said.
But even within the 5,000 to 20,000 acre crowd, there were significant subsets that possessed different perspectives on farming.
“Those that have doubled in size in the past few years are still struggling to do some of the work themselves as well as manage the farm,” said Barker.
“And then there are some who have truly moved into a manager role and don’t do much hands-on anymore. They are doing the budgeting, planning and HR (human resources) management instead.”
One of the biggest issues they had was finding enough workers with the right skill sets, Barker said.
Naturally, with so much purchasing power concentrated in the hands of so few, advertisers would love to know how best to get their message through to the decision makers.
One observation of the study was that these individuals make purchasing decisions based on information from a variety of sources, not just newspapers and radio.
“They are managers and optimizers of their land, equipment and labour. A lot of advertising just may not hit these guys at all,” said Barker.
Most of the operations, which averaged 8,200 acres in size, were still operating as family farms, but some had become corporations.
“They are very sophisticated, with partnership structures, and often they are incorporated, but they are still run with members of the family.”
Convincing the farmers to attend focus groups wasn’t as difficult as one might expect, she added.
“These guys are rare right now. They make up less than five percent of the farmer population, so for them to have a chance to talk to other people with similar issues was a draw, I think.”
