KOHLS

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KOHLS UHL CHAPTER 7

• INTERNATIONAL FOOD MARKETING

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Kohls Uhl Chapter SixFood Wholesaling
Retailing
Review

• A. Three Types Of Wholesalers Exhibit 4 Ownership
  Patterns
• B. Food Retailing Has Undergone Many Changes Over
  The Years
• C. Many Types Of Food Retailers Compete For Food
  Dollar
• D. Food Retailer Is "Channel Captain" -- The Boss
• E. Food Away From Home Is 1/3 Of All Food Sales
  With Restaurants, Fast Food, Institutions About
  Equal

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Course Concepts

• Wk 1 Kohls Chap 1 Intro To Food Marketing
• Wk 2 Kohls Chap 2 Analyzing Food Markets
• Kohls Chap 3 Ag Prod Marketing
• Wk 3 Kohls Chap 4 Food Consumption
• Kohls Chap 5 Food Processing
• Wk 4 Kohls Chap 6 Food Marketing
• KOHLS CHAP 7 INTERNATIONAL MKTING
• Wk 5 Kohls Chap 8 Price Analysis
• Kohls Chap 9 Mkt Competition
• Friday Midterm

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Concept Importance
Kohls Uhl Chapter SevenInternational Food
Marketing
What Would Happen To U.S. Agriculture If Every
Third Truck Leaving The Farm Had No Place To Go?

• The Output From One Third Of U.S. Agricultural
  Acres Is Exported.

Terry McClue. OFBF President, Said I Got Some
Great Concerns About Though About Protectionism
It Is A Disease That We Have To Fight.
Susie Taylor. Trade Vital To U.S. Agricultural
EconomyBuckeye Farm News. August 16, 2004.
Issue 18. Pg 1.
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DISCUSSION OBJECTIVESAfter Class Discussion,
The Student Should Be Able To
Kohls Uhl Chapter 7 International Food
Marketing
1. Discuss Why International Marketing Is
Important To Us Farmers 2. Discuss Adv Of
International Trade 3. Define Specialization,
Absolute Advantage, And Comparative Advantage 4.
Distinguish Between Trade Protectionism And
Enhancement 5. Discuss U.S.S AGRICULTURAL
TRADE 6. Calculate Terms Of Trade
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I. Significance Of Agr Trade
Learning Objective
Discuss Why International Marketing Is Important
To Us Farmers
7-1

• A. 15 Of World's Food Is Traded
• B. 1 Out 3 U.S. Acres Is Exported

C. 20 Of Farm Income From Exports D. Supports 1
Million USA Jobs E. USA Largest Exporter Of Ag
Products F. Source Of Market Expansion
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Learning Objective
Discuss Why International Marketing Is Important
To Us Farmers
7-1

• G. Exports Raise Prices

H. Exposes Farmer To World Econ
I. Keeps Farmers Efficient
J. Ag Exports Buy Other Imports
K. Helps Other Nations Develop
L. "Trade Bu's Not Bullets"
M. Leverage For Foreign Policy
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II. Rationale For Trade
Learning Objective
Discuss Advantages Of International Trade
7-2

• A. Get Things You Don't Have Enough Resources For

B. Make Best Use Of Resources C. Increase
Standard Of Living D. Decrease
Self-sufficiency E. National Security F. Aid
Developing Countries
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III. Trade Concepts
Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage

• A. Specialization

1. Before Specialization
Jim Joan
Food Clothing
30 10
30 10
2. After Specialization
Jim Joan
Food Clothing
70
25
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B. Comparative Advantage
Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage
1. Before Specialization
Fla
Tex
Total
Cotton
300/Ac
600/Ac
900 2ac
Rice
28/Ac
38/Ac
66 2ac
A. Best At Cotton?
Texas
B. Best At Rice?
Florida
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Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage
2. After Specialization
Tex
Total
Fla
1200 2ac
2 Ac 600
Cotton
76 2ac
Rice
2ac 38
3. Comparison
Cotton
Rice
900 2ac
66 2ac
Before Specialization
After Specialization
1200 2ac
76 2ac
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C. Absolute Advantage
Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage
1. Before Specialization
Neb
Iowa
Total
Corn
160 Bu/Ac
90 Bu/Ac
250 Bu 2ac
Wheat
30 Bu/Ac
40 Bu/Ac
70 Bu 2ac
A. Best At Corn?
Iowa
B. Best At Wheat?
Iowa
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2. Who Get The Most Corn By Giving Up The Same
Amount Of Wheat
Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage
Iowa
40 Bu Wheat 1 Bu Wheat
Give Up
160 Bu Corn 4 Bu Corn
To Get
Neb
30 Bu Wheat 1 Bu Wheat
Give Up
90 Bu Corn 3 Bu Corn
To Get
Has The Comparative Advantage In Corn
Iowa
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Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage
3. After Specialization
Iowa
Neb
Total
2 Ac 160
320 2ac
Corn
Wheat
2ac 30
60 2ac
3. Comparison
Corn
Wheat
250 Bu 2ac
70 2ac
Before Specialization
After Specialization
320 Bu 2ac
60 2ac
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Laws Of Trade
Learning Objective
7-3
Define Specialization, Absolute Advantage,
Comparative Advantage

• 1. Specialization Allows A Trading Partner To
  Become More Efficient In The Production Of One
  Good
• 2. Absolute Advantage A Trading Partner Can
  Produce Both Goods With Less Resources.
• 3. Comparative Advantage A Trading Partner Will
  Specialize In An Item For Which It Has A
  Comparative Advantage Trade For Items In Which
  It Has A Comparative Disadvantage.

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IV. Agricultural Trade Policy
Distinguish Between Trade Protectionism And
Enhancement
7-4
Learning Objective

• A. Trade Protectionism
• 1. Reasons
• A. Protect "Infant" Industries
• B. Shelter Farmers

World Competition
From
C. Internal Politics D. Prevent Free Trade
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Distinguish Between Trade Protectionism And
Enhancement
7-4
Learning Objective

• 2. Devices

A. Tariffs Import Tax
1). Regulatory 2). Punitive 3). Revenue
Easy to Tax Foreigner
B. Quotas Quantity Limits C. Licenses
Permission D. Restrictions Quality
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B. Trade Enhancement
Distinguish Between Trade Protectionism And
Enhancement
7-4
Learning Objective

• 1. Free Trade Areas

NAFTA North American Free Trade Area
2. Custom Unions 3. Common Markets ? 4. Current
Trend Since WWII
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C. Export Expansion
Distinguish Between Trade Protectionism And
Enhancement
7-4
Learning Objective

• 1. International Aid
• A. 1954 Pl 480 "Food For Peace"
• B. Part Of Foreign Aid
• C. Disaster Relief
• 2. Market Development
• A. 1985 Target Export Assist
• B. 1986 Export Enhancement Program
• C. 1986 Export Credit Guarantee

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3. Factors
Distinguish Between Trade Protectionism And
Enhancement
7-4
Learning Objective

• A. Size Of Market Population Income
• B. Economic Development
• C. Exchange Rate Val Of 1
• 1. Weak Exports Cheaper
• 2. Strong Exports Cost More
• D. Competition

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V. U.S. Agricultural Trade
Learning Objective
7-5
Discuss U.S.S AGRICULTURAL TRADE

• A. USA Agr Exports
• 1. 1981 Top 38 Of World Fd Trade
• 2. Mostly Low Unit Value Items
• 3. IL, Ia, Tx, Ca, Ks, Nb, In, Mn 50
• 4. Export To High Inc Nations

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Learning Objective
7-5
Discuss U.S.S AGRICULTURAL TRADE

• B. Food Imports

1. Us Largest Importer Of Food 2. Gives A
More Varied Diet 3. Gives A Cheaper Diet 4.
Money To Buy Our Exports 5. Classification
A. Competitive B. Complementary Added
Diversity C. Supplementary Added Quantity
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Summary
Kohls Uhl Chapter 7 International Food
Marketing
A. Foreign Trade Is Important For U.S. Farmers
B. There Are Many Reasons To Trade
C. The Law Of Comparative Advantage Says That You
Should Produce What You Are Economically Best At
Trade For The Rest Of Your Needs
D. Various Trade Policies Will Either Inhibit Or
Expand Trade.
E. U.S Has Tried To Expand Ag Exports
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Learning Objective
6
CALCULATE TERMS OF TRADE
CONCEPT HOMEWORK
GO TO THE WEB SCHEDULE FOR THIS COURSE AND CLICK
ON THE APPROPRIATE HOMEWORK
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Self Test International Marketing

• __ 1. Each Better At Something
• __ 2. Doing What You Are Best _at_
• __ 3. Of Us Crop Exported
• __ 4. Tax To Keep Imports Out
• __ 5. Cheaper Varied Diet
• __ 6. Us, Canada, Mexico
• __ 7. Pl 480 Food For Peace
• __ 8. One Better _at_ Both Things
• __ 9. Aids Developing Countries
• __10. Shield Infant Industries

• A. Expand Exports
• B. Comparative Adv
• C. NAFTA
• D. Tariff
• E. Absolute Adv
• F. Specialization
• G. Why Import Food
• H. One-third
• I. Reason To Trade
• J. Protectionism
• K. None Of Above

B
F
H
D
G
C
A
E
I
J
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Next
Agricultural
Marketing
Topic
Price Analysis