the size and importance of agribusiness
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The Size and Importance of Agribusiness. Chapter 3. Objectives~. Discuss the size and importance of production agriculture. Analyze the efficiency of production agriculture. Discuss the impact of U.S. agriculture on the global economy. Discuss the agribusiness economy. - PowerPoint PPT PresentationTRANSCRIPT
CHAPTER 3
The Size and Importance of Agribusiness
Objectives~
Discuss the size and importance of production agriculture.
Analyze the efficiency of production agriculture.
Discuss the impact of U.S. agriculture on the global economy.
Discuss the agribusiness economy.
Describe the agriservice sector of the agricultural industry.
Explain the importance of agribusiness and foreign trade.
Describe the relationship between agribusiness and energy.
Describe the relationship between agribusiness and the
environment.
Importance of Production Agriculture
No agribusiness without production agriculture
Starts with the land
Goods come from the land, farms and hard work of
production agriculturalists
Role of American production agriculturalists grows
in importance each day
More and more people become dependent on them
each day
Land~
Land is the major resource in modern farming
Especially interested in amount available and
usage
2.3 billion acres in United States
21% used for crops
25% for livestock
30% for forestry products
Remaining 24% for non-agricultural purposes
Products~
GDP – Gross Domestic Product - value of goods and
services that America produces in a year
Agricultural industry accounts for 17% of the GDP
Provides more than 20% of all the jobs in the
country
2% from firms that sell goods and services to
production agriculturalists
13% from related industries
Related Industries?
Purchase food and fiber from production agriculturalists
Process and package it so they will have a value-added
product to sell to consumers Ice cream makers
Textile mills
Flour mills
Tanneries
Breakfast food makers
Many more
Figure 3-1
Efficiency of Production Agriculture~
Tremendous increase in production efficiency
American agriculture efficiency is second to none
Less than 0.3% of the world’s production
agriculturalists
US produces a major percentage of the world’s
total food supply
Figure 3-3
American Farmers~
Unique ability to continually increase output while
inputs remain relatively constant
In the past 20 years, agricultural productivity has increased
more than 3 times faster than industrial productivity per hour
worked
One hour of farm labor today produces 16 times as much food
and fiber as it did 60 years ago
One production agriculturalist creates 6 agribusiness jobs
Figure 3-4
Why is Efficiency So Important?
Releases manpower for other work
Increases industrialization
Leads to a healthier economy
Gradual elevation of the standard of living of
all people
US Agriculture and the Global Economy
Agriculture is one of the world’s largest industries
More people are in some way involved in
agriculture than in all other occupations combined
The U.S. produces more food than any other nation
in the world
Export revenues account for 25 – 30% of U.S.
farm cash receipts and are a key factor in
determining gains in net farm income
Global Agriculture Market
Three events transformed the global agricultural
market:
formation of the European Community and its
Common Agricultural Policy (CAP)
collapse of many Socialist economies (Soviet
Union)
developing countries takeover of excess grain
imports
World Trade
World trade is the common thread in these
changes
General Agreement on Tariffs and Trade
(GATT)
established baseline trade positions and protectionism
levels for each signatory country
The Agribusiness Input Sector
Most neglected area is agribusiness input sector
Input suppliers play a major role in the production of food and fiber
Sector is currently recognized as a major phase of agribusiness
Agricultural input provides:
feed
seed
fertilizer
credit
machinery
fuel
chemicals
The Agribusiness Output Sector
Includes all agribusinesses and individuals that handle agricultural products from the farm to the final consumer buying * packing transporting * selling storing * merchandising warehousing * insuring grading * regulating sorting * inspecting processing * communicating assembling * advertising
Agriservice~
Research new and better ways to produce and
market food
Protect food producers and consumers
Provide special, customized services to all other
phases of agriculture
Public agencies dominant in agriservice area
Private agencies rapidly increasing their offerings of
farm services
Public Agriservice
Provides special services at federal, state, and local levels
Major areas of emphasis include: research education communication regulation
United States Department of Agriculture (USDA) more than 100,000 employees 12,000 in Washington D.C.
Private Agriservice
More than 30,000 firms provide agricultural services
Production agriculturalists pay more than $1 billion
yearly for private agriservices such as:
veterinary care
feed grinding and mixing
machine harvesting
contract labor
spraying
Agribusiness and Foreign Trade
US is leading participant in international trade of ag. products
5 major farm commodities sold in world markets in 1994: Feed grains and feed grain products Soybean and soybean products Wheat and wheat products Live animals Meat and meat products Vegetables
Imports and Exports~
United States is major exporter Total export value in 1966 was only $6 million Almost every country purchases US ag products today
United States is major importer as well annual farm imports increased from $4.45 billion to
$10.5 billion in ten years (136%) imports come from every continent except Antarctica largest quantities from Latin American, Asia, and
Europe
US trade surplus was $18.9 billion in the 1990s
Agribusiness and Energy
Agriculture is both a producer and a user of energy
Consumes 10-20% of the nation’s energy 1/3 of the energy is used by production agriculturalists
Remaining 2/3 is used by agribusinesses
Agriculture is becoming a larger producer of energy Direct Burning
Ethanol production
Biodiesel
Methane gas production
Sun and Water
Vehicles CAN run off of water only!!
Researchers at MTSU developed a process A 10-kilowatt solar unit is used to produce electricity from the sun.
The electrical energy is stored in the local power company’s grid; in
essence, the electricity used is measured and taken from the bank.
A solid polymer electrolysis unit separates the hydrogen from water.
The electrolysis unit is powered by stored (banked) electricity.
The hydrogen produced is stored and used to run an internal
combustion engine that powers the vehicle.
Agribusiness and the Environment
Environment is becoming more important to the business
of agriculture
Environment took a back seat to production and profit for
most of the 20th century
Quality of air and water was deteriorating
Citizens and scientists began to speak out about pollution considered radicals and alarmist in the beginning
many Americans joined the effort in the 1960s
Rachel Carson’s “Silent Spring”
Sierra Club
Environmentalists in Agribusiness
Those involved in the use of soil for growing crops are environmentalists
fruit, vegetable, and grain producers
First research on soil and water conservation conducted by M.F. Miller and F.L. Daley at the University of Missouri
National Resource Conservation Service “Provide leadership and administer programs to help landowners
and land users to conserve, improve, and sustain our natural resources and the environment, while enabling the United States to continue as the world’s preeminent producer of food and fiber.”
Can you name some traditional soil and water conservation practices that protect the environment?