Marketing gurus are discovering that one key ingredient is missing from many farmers' plans to get the highest possible price for their crops: personality.
Not bringing grower personalities into the mix could be one important reason why farmers have such a difficult time implementing plans that on paper make so much sense, say some marketing analysts.
Put another way, how growers' minds are hardwired should be taken into account for marketing plans to be successful. And that's why some economists are starting to wonder if they should bring psychologists, or at least psychological concepts, into future marketing sessions for producers.
If that seems to run counter to the business of selling crops based on supply, demand or technical factors, consider this: Only one in five producers do what some experts consider a good job of selling the crops that take so much effort to produce. Moreover, corn and soybean producers actually have become worse marketers over the past two decades, says Richard Brock, owner of Brock Associates, a commodity advisory firm in Milwaukee, WI. Fact is, most farmers have grower personality types, not marketing personality types — they like to grow crops, not sell them, Brock says.
“There is a different set of mental skills required for growing a crop vs. selling one,” adds Iowa State University economist Bob Wisner.
The book Do What You Are, by personality experts Paul Tieger and Barbara Barron-Tieger, helps illustrate this point. A personality well suited for the production end of farming is what is called a “sensor” on the Myers-Briggs personality test they use, one of the most popular tests. A sensor is one who is pragmatic and accurate, and who prefers the real and the concrete, and who works diligently on projects that absorb their interest.
At the other end of sensor is an “intuitive” personality, one who likes thinking in conceptual rather than in concrete ways. Intuitives love an arena that is fast paced and charged, and they thrive on change. Marketing is a natural profession for intuitives because the marketplace is constantly changing.
There are 16 personality type combinations with Myers-Briggs. (To find out your type, there are several free tests available — just type “personality type” into your computer's search engine. One of these is the Tiegers' site, www.personalitytype.com.)
The personalities of some producers will fall somewhere in the middle between sensor and intuitive, making it relatively easy for them to be both crop growers and marketers. But for producers who are extreme sensors, for example — and many farmers fit in that category — it's difficult to be highly proficient at both growing the crop and selling it because of the way they're hardwired.
Economists are only beginning to look at the importance of personality type to marketing. University of Illinois economist Darrel Good, for example, will be studying the impact of risk attitude on marketing style. Marketing analysts note that growers are not the heterogeneous group they have been sometimes treated as in the past.
In other words, not one marketing style fits all. Thus, it's potentially useful for growers to have their personality tested and then matched with the variety of marketing plans now available. For intuitive types, for instance, those who thrive on change and risk, the futures market appears to be a better match than for growers with other personalities.
A good intuitive fit is Steve Anderson, who grows 2,000 acres of corn and double crops 1,000 acres of wheat with soybeans in western Kentucky, and who says he's “in the market every day.”
Anderson is comfortable with margin calls, selling a crop, then buying futures if it looks like the market later is moving up, and so forth, “because a marketing adviser who works with me is an expert — and I totally trust him. I want to be able to use all the tools,” he says.
Anderson's goal is to sell in the top third of the market, but is an aggressive user of tools that other producers with more “sensor” personalities might have difficulty using on a daily basis.
Sensors might be more comfortable using forward price contracts, and contracts that act more like mutual funds, where producers sign a contract to sell X number of bushels if the price hits X dollars. It's much like the difference between wanting to buy and sell individual stocks vs. mutual funds on Wall Street.
Sensors are comfortable selling part of a crop ahead of time, but not too much. And they don't like to use futures and options, according to Dale Aupperle, president of Heartland Ag Group, in Decatur, IL, a farm management company with clients in 40 states as well as globally. Asked if there is any difference between personality and an appropriate marketing plans for his landowner clients, Aupperle says: “Big time. And it comes down to a four letter word: risk.” Sensors, he says, are far less comfortable with risk than intuitives.
Aupperle also says that growers most likely to have the highest yields are probably the worst marketers, because sensors make better producers than intuitives. That's because sensors pay better attention to detail and fine-tuning repetitive tasks to boost yields. Such actions bore intuitives, he says, because intuitives want to move quickly from solving one problem to the next one.
Very few farmers are intuitives, Aupperle says, because sensors are attracted to farming while most intuitives are not.
But there are other ways personality comes into play on marketing, Wisner says, because producers have so much riding on it from an income and cash-flow perspective. For some, that can lead to marketing paralysis.
To aid growers, several new marketing tools have been developed to make it easier to market your crops, such as computer activated contracts that combine seasonality and technical analysis.
That said, when it comes to a grower with the right personality who's suited to both produce and market a crop, “it would take an unusual person who can handle both,” Wisner says.
Are Pessimists Better Marketers?
Farmers have to be optimists to cope with drought, hail and other elements they must deal with between planting and harvest. But when it comes to marketing, some believe those with personality types that are too optimistic are at a disadvantage.
“I'm a market bear,” says western Kentucky grower Steve Anderson. Most farmers are optimists and think prices will always go up, he says, “but I'm just the opposite. I always think prices will go down.”
Ego gets involved, Anderson says, but the problem many have is that they live in the past and think about what prices were — and that something will change to drive them there again. In other words, they're optimists.
Iowa State University economist Bob Wisner says that as described in the book Beyond Fear and Greed, there's more emotional joy in the optimistic belief that markets will go up than taking a loss while they're on the way down. As a result, it's difficult for producers to sell corn that has fallen from $3.50/bu. to $3, even though it may be headed down to $2.50.
There are several emotional factors at play that you should keep in mind as you develop your marketing plans. The book says one set of factors includes overconfidence, the desire for control, and the illusion of control. The other is what the book's author Hersh Shefrin calls “get-evenitis,” the difficulty people have in making peace with their losses.
He notes that get-evenitis effects both the sophisticated and the unsophisticated, and those willing to take losses when a stock or commodity is on the way down are not always popular. Get-evenitis also leads people to take speculative chances in order to avoid taking a loss.
Again, using Wisner's example, say corn has dropped from $3.50/bu. to $3 — fundamentals are bearish with prices moving lower every day. It's tempting to take a risky speculative position — and this can include doing nothing — and conclude that something will happen to bring prices back up.
This problem is not only for farmers. There are plenty of examples of Fortune 500 companies that sometimes have been willing to lose millions, even billions, rather than take their lumps and admit they made a wrong decision.
Finally — and all personality types may be tempted to succumb to this — is the issue of “ego and LDP bragging rights,” says Richard Brock, owner of Brock Associates, Milwaukee, WI.
“Many farmers want a bigger LDP payment than their neighbor, even if it means forgoing profits,” he says. Ironically, he adds, the intense focus on LDP payments — plus crop insurance — have made farmers worse marketers than they used to be.
Farmer vs. Marketer: It's Hard To Excel At Both
If there's such a thing as a farmer personality, according to the Myers-Briggs personality test, it's someone who is introverted, sensing, thinking, and perceiving (ISTP) — people who are straightforward, honest and pragmatic, who prefer action to conversation.
“ISTPs have an innate understanding of how mechanical things work and are usually skilled at using tools and working with their hands. They tend to make logical and private decisions, stating things clearly and directly, just as they see them,” according to Paul Tieger and Barbara Barron-Tieger in their book, Do What You Are. ISTPs tend to be convinced only by hard facts, and are practical realists.
For an ISTP, the book says, career satisfaction means doing work that:
Lets you practice, master and then use skills you've acquired, especially mechanical skills or those requiring the use of tools.
Lets you apply your understanding and technical knowledge of the world around you and see the logical principles underlying your work. It also lets you engage in troubleshooting and problem solving.
Has clear directions; where you can work expediently and deal with real and practical products.
Is fun and active and lets you work independently with frequent opportunities to get out of your workspace and be outdoors.
Is done in an environment without excessive rules or operating standards imposed by others. Also, where you can enjoy spontaneous adventures and step in to manage any crisis.
Lets you work independently with a minimum of supervision, and where you're not required to closely supervise others.
A good marketing personality type, by contrast, is one who is extroverted, intuitive, thinking and perceiving (ENTP). People who like to test the limits around them and consider that most rules and regulations are meant to be bent, if not broken.
ENTPs are sometimes unconventional in their approach, Tieger and Barron-Tieger say. ENTPs, on the other hand, are born enterprisers, and are fascinated with new ideas. They love excitement and challenge. They like new ideas and are alert to all possibilities. They have strong initiative and operate on creative impulse. They value inspiration above all else and want to turn their original ideas into reality.
As an ENTP, career satisfaction means doing work that:
Gives you opportunities to engage in creative problem solving and/or generating new and innovative approaches to problems.
Lets you implement your innovative solutions.
Lets you improvise.
Allows you to design or start projects, but does not require you to follow through with tedious details.
Lets you meet and have interaction with many different people.
Can be done in a rapidly changing, high-energy environment.