2 2020 is in the rear-view mirror but the consequences of one of the most challenging years on record are still being felt. Agricultural markets are intrinsically global and not so strange to global influences. Be it a commercial war, protectionist measures, disruptions in logistics or weather, ag traders have always been nimble and watchful, making their decisions accordingly. But what about us, agrimarketers?
Commodity prices have recovered to pre-pandemic levels with the exception of Energy, which can still affect agriculture due to the relationship between ethanol prices and demand for corn.
Although the price trends are slightly positive for 2020, the previous year (2019) was marked by historically low commodity prices which constrained margins for ag companies and make it difficult for agrimarketers to make any baseline comparisons. That said, recent trends are signaling a bull market for ag, which could boost margins, meaning more money for marketing budgets.
That said, just because overall trends point to increased agribusiness spending, agrimarketers shouldn’t simply expect their budgets to increase proportionately. While unfortunate and seemingly unfair, marketing budgets are typically reduced at a higher percentage than overall budgets in bearish times and increased by a lower percentage than overall budgets in bullish times. So, as agribusinesses are coming off of nearly two years of suppressed marketing spends, with significant savings coming in 2020 due to cancelled travel and tradeshow efforts, there will be major trepidation to “return to” pre-2019 budget sizes and increased pressure to “do more with less”. As such, agrimarketers who wish to secure additional budget must act now to build their strategic business cases or risk seeing contingency dollars allocated elsewhere.
It is at times like these that marketing, communications and digital strategies are a must for agrimarketers, as they not only provide guidance and rationale for planned efforts and spending but also help to justify areas where additional budget could provide an improved ROI. More importantly, this is a time to embrace change and new ways of thinking/doing as few agribusiness leaders will want to invest the same, let alone more, into marketing strategies that look and feel like those of the past.
Thankfully, the ongoing restrictions imposed by the pandemic require us to shift our thinking on how we approach marketing. COVID-19 has changed the way we interact, with a special challenge to networking. In-person conventions, summits and tradeshows have ground to a halt, and for the immediate future are not even a blip on the radar. So how can we continue to interact and gather new leads? How do we harness the drive to socialize and exchange ideas, which is so inherent to the ag community?
Although challenging, COVID-19 has provided us with a silver-lining: Travel, shows and convention budgets can be converted to new engagement strategies, such as social media marketing campaigns, virtual tradeshows, virtual crop tours and other web-based outreach. The convention floor is now a digital chat room, and the speaker podium - a well-adorned webcam background.
Here resides our challenge for 2021. The average farmer in North America is 58 years old, and the average age of new operators is 46; while farmers aged 35 and under only represent 9% of the total 2 million US farmers. Although these young farmers are more digitally savvy, they only account for a small fraction of our audience – leaving us to struggle with the question, how can we successfully engage older audiences using web-based strategies?
2021 will require a shift in marketing budgets from traditional expenditures to new items, and it is important for agrimarketers to highlight the importance of focusing on new venues. Whether it’s ads on social media, market-news websites, radio or TV, it is up to agrimarketers to present new ideas and show how the ROI on these new investments can be as good or better than older ones.