Looking to the Future
USDA released its agricultural projections through 2017 in February, and the report indicates that agriculture industries are poised for some good years ahead.
Rising costs labor, fuel and land will increasingly be offset by rising agricultural exports and changes in consumer spending, according to the report. Growth in developing countries, a weak dollar and steady population growth will drive agricultural exports to $103 billion by 2017, according to USDA.
One of the most interesting sections of the agricultural report is the breakdown on consumer food spending. In 2007, Americans spent $583.6 billion on food at home, compared to $554.1 billion on food away from home. By 2012 just a few years from now money spent on food away from home is projected to surpass in-home, and by 2017 food bought away from home will make up 52 percent of total food expenditures, or $868.7 billion of the total $1,671.1 billion. Food prices also will continue to increase at a rate higher than inflation, with prices on food purchased away from home increasing slightly more than food purchased for home.
The potato industry can position itself to capitalize on the changing marketplace. As consumers look for more convenience and quicker meal options away from home, there’s an opportunity for more potato recipes at quick-service and casual restaurants. Consumers are looking for new flavors, and that trend is no more evident than in the growing niche of specialty potato varieties.
I doubt many potato growers look eight or nine years into the future not many of us have a crystal ball or the resources of USDA but tracking consumer and industry trends is important for the industry. Operating on the same business model five or more years out may mean missing out on a growing segment of the market, playing catch-up instead of leading.
Take Polaroid, for example. The company’s instant photograph film had many good years, but as consumers have moved to digital cameras the Polaroid camera became obsolete. The company announced this year that it would no longer produce film, but would focus on digital photography technology an example of a company willing to innovate and adapt to the changing marketplace even if that means working to change its legacy.
Your associations are doing a good job of identifying market trends and reaching out to consumers now it’s the industry’s turn to give consumers what they want, even if it means change.
The future isn’t set, but it appears that there is reason for optimism. Looking over the hurdles of rising fuel costs, food safety regulations and labor issues, to name a few, the industry has the potential to grow steadily. And that’s good for your business and for your customers.