Segmenting Today’s Agricultural Borrowers

From Ag Lender Magazine - Today’s agricultural borrower is anything but run of the mill; farms differ in size, commodities produced, types of inputs used, etc. Often overlooked when characterizing a farm, is one important characteristic: the structure of the farm household itself. These characteristics are critical to understanding the customer base, segmenting the market, and tailoring different financial product and service offerings to different market segments. This series of articles will first identify a new typology or structure for segmenting farms. The financial characteristics of these different segments will be described, and then the discussion will turn to different financial products and services that might be targeted to the different segments. In this first article, we will focus on characterizing farm households based on household incomes and resources.