AG PUBLISHING VETERAN OFFERS THIRTY YEARS OF INSIGHT
Agri Marketing recently asked Al Johnson, president and CEO, Farm Progress Companies, to share his insights on the ag publishing industry. Mr. Johnson, a 30-year veteran, recently announced his retirement effective July 1, 2000.
It was a beautiful September day in 1970 as I drove my new Pontiac Tempest, purchased with Vietnam combat pay, from Fargo to Valley City. My plan was to meet with
Donovan D. Evashenko, advertising manager of the Dakota Farmer. What kind of character would he be?
Evashenko was waiting for me when I arrived at the local truck stop. He didnít look like the ëRussian Czarí I had pictured in my mind during the drive and we had an enjoyable lunch. Then he shocked me by offering the sales job, on the spot, for a whopping $8,250 per year.
The job and salary sounded great, but I didnít want to mess up
the football season activities I had planned. He warned me that he had another interview lined up and if he liked that candidate as well as me he would offer him the job. ěIíll take itî came out of my mouth before I knew what happened. So began my career in farm publishing.
the Butz boom
I entered the business at a great time. The seventies were prosperous for agriculture as farmers responded to Earl Butzís fence row to fence row agricultural policies. We experienced growth of ad pages every year between 1970 and 1979 when the Dakota Farmer was sold to the Webb Company and I joined the midwest unit of Webb in New York.
Advertising spending from the equipment category doubled during the decade as farm equipment sales skyrocketed. Large tractor sales nearly tripled reaching 74,000 units sold in 1979. Combine sales increased twenty percent to 32,000 units sold that same year.
This was also a dramatic growth period for crop protection chemicals such as Treflan, Aatrex, Prowl and Lasso. Many other products followed with even larger marketing budgets. Crop chemical advertising grew by over $25 million during the seventies, a threefold increase.
Life on the farm was also good as farm income soared. Farmers purchased larger equipment and bid up the price of land by leveraging their appreciated equity. Lenders competed for loans and signed almost any farmer with respectable credit. Life couldnít get any better than this.
The bubble bursts
The problems in the general economy in the í80s moved into agriculture. High interest rates, falling land prices, grain surpluses and low commodity prices eroded balance sheets. The same lenders who competed to put money into agriculture started calling in loans as collateral melted away. It was a repeat of the 1930s dust bowl without the wind and drought.
Facing intense pressure to do ěsomethingî the Reagan administration implemented the Payment in Kind (PIK) program in 1983 to take acreage out of production and put money in farmersí pockets. The combination of the economy and the PIK program were devastating to rural America. Large-tractor sales dropped to 16,000 units by 1986 and combine sales plummeted to 7,600 units ó about one-fourth of sales only six years earlier. Implement dealers and other small town businesses closed by the hundreds.
Most state farm magazines saw advertising revenues cut in half during the first half of the 1980s. Farm Journal did the best job of dealing with the situation by providing some state-specific editorial coverage and offering rates that were half the price of advertising in the tabloid state farm magazines.
I was promoted to national
sales manager in 1981, just in time
for the free fall. By 1986, the company struggled to reduce costs, resulting
in two of my bosses leaving, and
my appointment to general manager. Understandably, I was nervous
that these 100-year-old publications would cease to exist during my tenure.
The management team at Farm Progress knew we had to deal with our cost problem. We chose to downsize our tabloid publications and expand coverage into the 12 midwestern states. We were now competing with publications that had been our allies for more than a century.
The move was successful as
revenues and profits increased. We dodged a bullet, but were not comfortable that part of our success was at the expense of the other state
The lunch that
changed an industry
In February 1990, I arranged lunch with the president of HBJ Farm
Publications, to see if we could resolve some insurance sales conflicts. At the end of lunch I added, ěFarm Progress is a good publisher. HBJ is terrific at selling insurance. We should do a swap.î
Fifteen months later, and enough corporate intrigue at HBJ and ABC to fill a chapter in a book, we signed the agreement and took title to 13 additional state farm magazines. Whether it was fate or just good luck, Farm Journalís long-time advertising director left their company the Friday before the acquisition announcement ó giving us some breathing room on the rollout.
Farm Progress now had control of 18 state farm magazines to gain cost efficiency, offer more competitive pricing and a more consistent editorial product. The leadership position in farm media started to change as Farm Progress matched or exceeded competitive offerings. By the end of the decade, our coverage grew to 35 titles with national reach.
The Biotechnology Phenomenon
I have been skeptical of predictions
of dramatic changes in agriculture because most technologies take many years to implement. That all changed with biotechnology and the rapid adoption of Roundup Ready soybeans. In less than 3 years, the chemical industry was tipped upside down. This led to the devaluation of some companies and eagerness for others to buy up seed genetics in order to control markets. Consumer acceptance of biotechnology continues to cause instability in the marketplace.
We are entering another revolution in communication and commerce as a number of new companies, flush with venture capital, enter agriculture. The investment seems to be running ahead of on-farm adoption. Who the survivors will be remains the question. I am confident farm publications will continue to play a leading role in providing information to farmers. The method of delivery may change, but trusted brands will dominate.
Farm shows will become even more important in the communication of new technology. There is something magical about seeing equipment in the field, side by side, on a sunny afternoon. With fewer dealers and less inventory on lots, farm shows are the best opportunity for farmers to evaluate products and services.
A bit of nostalgia
I have always been a dreamer, but never envisioned the good luck I would have in my career. Iíve been fortunate to attract and retain some
of the brightest talent in agriculture. These people have been instrumental in making good things happen for Farm Progress, our readers, clients and me.
I constantly remind our employees that we do not manufacture equipment or buildings. We deliver ideas to farmers and market audiences to agribusinesses. It takes talented people working in concert to publish a farm magazine, produce a farm show or develop a database.
I would caution Farm Progress managers, competitors and advertisers that abusing the editorial integrity of the great publications serving agriculture is not in anyoneís best interest. We have enough creativity at our advertising agencies to communicate a message without infringing on the editorial product. If farmers no longer view the information in our magazines as unbiased, the entire industry loses.
There is something mystical about the agricultural business. The people in this industry are genuine, honest, fair and fun to do business with. Agriculture today is full of opportunities as we move into the new century. I can only hope that the young people entering the industry today have half as much fun and fulfillment as I have. AM