Opinion: Tough Economy Not Always Tough On Growers
July 1, 2009 At least once a year, our team of editors likes to send an e-mail to a wide range of fruit industry experts, including our columnists, members of our Editorial Advisory board, and several other close contacts we work with on a regular basis. Most recently, as you can imagine, one of the main topics of discussion was the economy and the impact it is having on fruit growers of all sizes, and on the industry as a whole.
The consensus seems to be that while it is virtually impossible not to be affected by the current economic climate in some way, the specialty crop industry does not appear to have been hit as hard as several other industries, including other sectors of agriculture. As many of our contacts pointed out, “people gotta eat.”
However, this does not mean your business will not be affected at some point. Whether you’re a small grower marketing directly to consumers, or a large grower shipping across the country or around the world, you should be looking at your company’s business plan, and make sure you’re prepared to deal with fluctuations in the market.
Lending Looks Promising
There is some good news coming from the banking industry. According to the American Banking Association (ABA)’s Center for Agricultural & Rural Banking’s annual “Farm Bank Performance” report, farm lenders were able to meet the growing demands for agricultural credit in 2008. The demand for farm loans continued to rise in 2008 and the banking industry provided the majority of all farm credit. A significant amount of this lending went to support small farms.
In 2008, the U.S. banking industry held $123.5 billion in farm loans, which includes $69.1 billion in small farm loans, of which $26 billion was in very small farm loans. In 2007, the banking industry held $114.2 billion in farm loans. The number of small farm loans in 2008 surpassed 1.2 million, with the vast majority — almost 1 million — under $100,000.
“Thanks to the banking industry, rural Americans, especially the owners of small farms, are finding plenty of opportunities to finance their farms, ranches, businesses, and homes,” says John Blanchfield, director of the association’s Center for Agricultural & Rural Banking. “Banks provide the broadest array of financial products and services to guarantee that rural Americans have access to credit when they need it.”
Learning Opportunities
On the consumer side, there’s good news if you’re a small direct marketer. Growers such as Evan and Nathan Milburn (the 2008 Apple Growers of the Year) are benefiting from more families choosing to take “staycations” this year, or doing more activities closer to home.
Meanwhile, there are plenty of opportunities for you to learn more about the changing conditions in today’s economy, and what they mean for you. Members of the Western Extension Committee, an organization of Extension economists from 13 states, have developed a Webinar series titled “Ag In Uncertain Times.” The series, which began in June, focuses on credit opportunities, market changes, families facing uncertainty, operating in risky environments, and managing an agricultural enterprise. Our editors will be sitting in on each of these Webinars; go to the news page on our website, www.growingproduce.com, to learn more. After June, more Webinars will take place from September through December.
We Want To Hear From You
Over the next few months, we will continue to provide you with news and updates on how the economy is affecting the fruit industry. In the meantime, we’d also like to hear from you. Take a look at the following questions:
• How has the economy affected your thoughts on purchasing new equipment?
• Have you attempted to improve your efficiencies in the way you use fertilizers, crop protectants, water, or fuel on the farm?
• What are your buyers or customers telling you about how the economy is affecting them?
• Have you seen a rise, or a dip, in your sales in the last year or so?
Drop me a line at the e-mail address above with your thoughts on any of these questions. You might be able to learn something from your peers.
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