Marketing Strategies in the Agricultural Industry to Help

Farmers in the State of Connecticut

Agricultural Statistics Hotline (800) 727-9540

Brian McCann,Christopher Murphy, Jennie Deering, Caitlin DeAngelis,

Rachel Corbett & November 2015

Consumer Behavior 212: Section A

Our Purpose

We believe that farmers in the state of Connecticut are struggling to keep up with the high demands for local and sustainably

produced food. Today, we will present marketing strategies for the Connecticut

agricultural industry through the implementation of micro-loans.

Our Purpose

Large numbers of people are eating local, sustainably produced food. Farmers in

Connecticut can greatly benefit from small, low interest business loans. Micro-financing will

allow these individuals to make small investments to increase their operations while maximizing profits by leveraging low interest

rates.

IntroductionPurpose

Consumer Segment Industry Analysis

Marketing Strategies Consumer Behavior Problem

RecommendationsConclusionQuestions

Agenda

Consumer Segment

Principal Operators by sex:Male: 4,472 Female: 1,505

Average Age of principal operator: 58.7

"USDA/NASS 2014 State Agriculture Overview for Connecticut." USDA/NASS 2014 State Agriculture Overview for Connecticut. STATE AGRICULTURE OVERVIEW, 2014. Web. 17 Nov. 2015. <http://www.nass.usda.gov/Quick_Stats/Ag_Overview/stateOverview.php?state=CONNECTICUT>.

Who Are Farmers?

Farms in CT are only big enough to do some standard farming, or even engage in commercial operations.

Connecticut led all of New England with a 22% increase in the number of farms created since 2007, for a total of 5,977.

Land included in those farms

totaled 436,406 acres, up 8%.

Grant, Steve. "Let It Grow: Connecticut Leads Farm Growth In New England." Tribunedigital-thecourant. Hartford Courant, 23 Mar. 2014. Web. 17 Nov. 2015. <http://articles.courant.com/2014-03-23/news/hc-farm-survey-results-ct-20140322_1_new-farmers-agriculture-census-andy-billipp>.

Farming is on the Rise

As of 2012, an average Connecticut farm is 73 acres.

CT is small in area at only 3.18 million acres, and agriculture accounts for approximately 13% of that acreage.

According to Mark Zotti of the Connecticut Department of Agriculture, there are 130 farmers’ markets statewide, with 300 participating farmers, up from just 66 in 2002.

Farming on the Rise continued...

http://www.connecticutmag.com/Connecticut-Magazine/July-2013/Connecticut-Farmers-Markets-Farm-Fresh/

Manpower: In order to keep up with high production demand, CT farms need more employees to work for them.

Machinery: High production demand also comes high volume of product inventory. High-tech machinery will help farmers become more efficient.

Land: CT is losing farmland at one of the fastest rates in the country. There are twice as many people looking for land, as there are parcels for lease or for sale on similar land link programs.

Slupeki, Jane. "Cornell Small Farms Program." Cornell Small Farms Program Connecting Aspiring Farmers with Existing Land Connecticut Farm Link Program Comments. Farms Programs, n.d. Web. 18 Nov. 2015. <http://smallfarms.cornell.edu/2010/04/04/connecting-aspiring-farmers-with-existing-land-connecticut-farm-link-program/>.

Necessities of the Farming Industry

Farmers are concerned about ever changing weather conditions and disease Small farms have to be worried about changing petroleum pricesThey are fearful of big farms and government regulations

2008, and Www.thecarrotproject.or. Are Northeast Small Farmers in a Financing Fix? Research Results on Financing Gaps and Program Opportunities (2008): n. pag. The Carrot Project. The Carrot Project, 2008. Web. 18 Nov. 2015. <http://www.uvm.edu/wagn/resources/CarrotProjectReport.pdf>.

A Concerned Market Segment

"Small Farms." Small Farms. N.p., n.d. Web. 19 Nov. 2015. <http://microfarmlife.com/index.php?option=com_content&view=article&id=8&Itemid=12>.

A Day in the Life of a Farmer

"Job Descriptions, Definitions Roles, Responsibility: Farmers, Ranchers, and Agricultural Managers." Job Descriptions, Definitions Roles, Responsibility: Farmers, Ranchers, and Agricultural Managers. N.p., n.d. Web. 22 Nov. 2015. <http://www.jobbankusa.com/career_employment/farmers_ranchers_agricultural_managers/job_descriptions_definitions_roles_responsibility.html>.

Loyalty Status, Usage Rate of Farmers● Farmers are not loyal

to one company when looking for loans.

● They use loans only on a need-based time-line.

● This means that the usage for farmers is situational.

Current Consumption by Farmers

Bigger farms are bullying out small farms in terms of loans

One quarter of respondent farmers that applied for financing were denied short- or intermediate- term financing

13% expressed interest in equity financing.

http://www.uvm.edu/wagn/resources/CarrotProjectReport.pdf

Media Consumption

● All eight of Connecticut’s counties are shown with Fairfield, New Haven, and Hartford counties providing the greatest output.

● Movement toward small-scale

farming and locally, organically grown food for communities across the world

Keough, Gary. "USDA Blog » Farming on the Rise in Connecticut." USDA Blog RSS 2. United States Department of Agriculture, 12 June 2014. Web. 17 Nov. 2015. <http://blogs.usda.gov/2014/06/12/farming-on-the-rise-in-connecticut/>.

Why Farmers in Connecticut?

● The markets help support community, economy and business, and everyone is reaping the benefit.

● How crucial the movement toward small-scale farming and locally, organically grown food is for communities across the world.

Continued...

Industry Analysis

A Billion Dollar Industry

● Connecticut agriculture contributes $4.6 billion per year to the state’s economy.

● The Northeast region produces $70.9 billion.

● Connecticut was ranked second in output, with Massachusetts outputting the highest at $13.0 billion.

http://www.ct.gov/doag/lib/doag/boards_commissions_councils/gcf/grow_ct_farms_3_6_2013_low.pdf

Who Else is Helping Farmers?

The United States Department of Agriculture (USDA) offers Direct Farm Operating Loans along with microloans for farms in America.

Operating loans may be used to purchase items such as:● Livestock and feed● Farm equipment● Fuel, farm chemicals, or

insurance● Minor improvements● Refinance certain farm-related

debts

http://www.usda.gov/wps/portal/usda/usdahome

Advantages of farmers in CT doing business through our company includes:

● Guaranteed trust ● A partnership● Working only with CT

farmers● Face-to-face interaction● A personal touch to

business operations

Small Businesses Helping One Another

Current Marketing Strategies

● Smaller farms are 200 to 1,000 percent more productive per unit area than large farms.

● Partnering with the “Buy CT Grown” organization.

https://www.organicconsumers.org/old_articles/Organic/smallfarmsbetter.php

Opportunities in the Farming Industry

http://www.multinationalmonitor.org/mm2000/00july-aug/interview.html

● $4.6 billion annually in economic output.

● 28,000 jobs in Connecticut’s communities.

● Part of a six-state region producing $70.9 billion per year and over 378,000 jobs.

● Agriculture contributes to improving Connecticut and its citizens.

Why the Farming Industry?

http://www.usda.gov/wps/portal/usda/usdahome

Main Consumer Behavior Problem

Problems with the Farming Industry

● Resource depletion.● Land management.● Availability and price of land

expansion.● Stability, development, and

fluctuations in financial markets.

● Demographic changes.● Microlending is a rare and

underused concept.http://seedstock.com/2012/04/18/five-major-challenges-facing-north-american-agriculture/

Recommendations for Marketing

● We plan to provide microloans with a small fixed interest rates to operators of small farms.

● Microloans will provide the farmers with funds to expand their operations, purchase equipment to increase efficiency, and bring in more crop and livestock.

CattleCa$h

CattleCa$h● With small interest rates,

farmers will be able to increase their operations while keeping a majority of money in their pockets.

● Operating loans may be used to purchase items such as:○ Livestock and feed○ Farm equipment○ Operating costs and family

living expenses○ Minor improvements or

repairs to buildings

Set interest rates at 15%. Most microlenders go from 20%, and even some to 100%+.

$5,000-$9,999 with terms of 1-3 years.$10,000-$19,999 with terms of 3-5 years.$20,000-$29,999 with terms of 5-10 years.

$30,000-$50,000 with terms of 10-15 years.

These rates will bring in monetary profit and value for the company, as well as provide non-monetary value to these small farmers and the surrounding communities.

http://www.kiva.org/about/microfinance#III-I

Reasonable Pricing

● Regional offices placed strategically throughout the state of Connecticut.

● After an initial face-to-face meeting, existing customers will be able to reach the offices over the phone or through our agents to discuss their accounts.

Convenient Distribution of Micro-loans

● Useful methods of promotion are farmers markets, billboards/street signs and door to door advertising.

● Digital advertising○ Farmersonly.com○ buyCTgrown.com

● Small Farm Today Magazine for print advertisements.

Exposure

Real Life Demand: Matteo Abbruzzese1. If you could grow your operation right now,

what is the first step?a. “I am always looking for more land.

[Then] more livestock. Infrastructure would be along with livestock - fencing and water.”

2. Have you, or have you thought about, taking out a traditional bank loan?a. “The business did take a traditional line

of credit. I have looked at other loans through farm friendly type organizations.”

3. Are the loans offered by the farm friendly organizations smaller, microloans?a. “Some have ranged up to $50,000, but

I would be more in the range of of $10-15,000 just for operating expenses or buying livestock.”

Conclusion

● Increased opportunities for farms.

● State’s facilities and institutions access to fresher, more nutritious meals.

● All state residents will ultimately benefit!○ Economic stimulus

resulting in keeping more of the money spent by these facilities here in the state

The Revival of the Farming Industry

Questions?