Producer purchasing priorities

Cattle producers know what they want from the inputs they buy.

Nevil Speer

January 7, 2016

2 Min Read
Producer purchasing priorities

The Center for Food and Agricultural Business at Purdue University conducts a nationwide survey of large commercial producers (LCP) every five years. The survey’s intent is to better understand the decision-making process among larger ag producers – especially as it pertains to purchasing inputs and services. 

The most recent survey was conducted in 2013 and targeted seven key commodities: corn and soybeans; wheat, barley and other small grains; cotton; fruit, nuts and vegetables; dairy; hogs; and cattle. Overall survey results are based on 1,679 respondents – including 186 cattle operations. 

One of the key aspects of survey results includes differentiation of buying preferences among producers. Three key attributes were evaluated within the survey results: price, performance and dealer-retailer relationship. Producers were asked to rank the importance of the three attributes, creating a total of six possible combinations.  

commercial producer priorities

Livestock producers ranked the importance of the attributes for animal health and feed products, respectively. The results are outlined in this week’s illustration. The overwhelming majority of producers ranked performance first. Meanwhile, the price – performance - relationship prioritization order accounted for nearly one-fourth of respondents. 

It’s also interesting to note that 68% of performance – price – relationship buyers for animal health products had the same preferences in their feed purchases. In other words, large commercial producers tend to be generally consistent about their priorities across their respective input needs. And the priority is this: they want the stuff to work.

Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited.  The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited and Natural Gas Exchange Inc.

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About the Author(s)

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

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