The Global AgriFood System

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Chapter 1

• The GlobalAgri-Food System

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The Agri-Food System
Feeding a Hungry World
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Agribusiness
The Business of Food
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Agri-Food
1
In the World
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U.S. AgribusinessLeading the World

• Largest Agribusiness Sector in the World
• Largest Part of U.S. Economy
• One of the Best Integrators of Technology
• Biggest User of Biotechnology
• Safest Food
• Lowest Cost Food
• Largest Assortment of Food
• 11,000 New Food Products per Year

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FoodConsumers
Product Flowin the GlobalAgri-Food System
Food Retailers
FoodManufacturers
CommodityProcessors
Food Distributors
Ag Commodities
What Consumers Want
Input Suppliers
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The Business of Food

• We consume 350 million tons of food each year
  about 6 pounds per person per day
• Farmers get 20 cents of each food dollar
• Consumers spend 10.4 disposable income on food
• 6.2 for food at home
• 4.2 for food away from home
• Each farm worker produces enough food for 103
  people 75 in U.S. and 28 abroad
• Number of farm workers is greater than the
  combined total of workers in the auto, steel, and
  transportation industries

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Dollar Value of Agri-Food Output by Industry
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U.S. Agri-Food Employment
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U.S. Agribusiness
With less than 7 of the worlds land and 5 of
the worlds population We Produce 12 of World
Agricultural Output

• 47 of the worlds soybeans
• 42 of the worlds corn
• 28 of the worlds cheese
• 19 of the worlds milk
• 16 of the worlds cotton
• 12 of the worlds wheat

We Export 27 of U.S. Production
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Farm Productivity and People Fed/Farm Worker
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Percent of Disposable IncomeSpent on Food over
Time
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Percent of Income Spent on Foodby Country
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People Buy Food fora Hierarchy of Reasons
Status and Causes
Living Well
Promoting Health
Convenience
Tastes Good and Variety
Nutritious, Safe, and Affordable
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Agribusiness ManagementThe Integrator of the
Disciplines

• Science remains in the laboratory unless there
  is incentive to adopt the knowledge. This is the
  difference between science and technology.
  Agribusiness Management is the integrator.
• Source The Agricultural Revolution of the 20th
  Century, Paarlberg and Paarlberg, p. 59.

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The Agricultural Revolution of the Twentieth
Century I

• If a farmer from Old Testament times could have
  visited an American farm in year 1900, he would
  have recognizedand had the skill to usemost of
  the tools he saw the hoe, the plow, the harrow
  the rake. If he were to visit an American farm
  today, he might think he was on a different
  planet.
• Source Paarlberg and Paarlberg, p. xiii.

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The Agricultural Revolutionof the Twentieth
Century II

• The changes that occurred in American
  agriculture during the 20th century exceed in
  magnitude all the changes that occurred during
  the 10,000 years since human beings first
  converted themselves from hunters and gatherers
  to herdsmen and cultivators.
• Source Paarlberg and Paarlberg, p. xiii.

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The Processing- Manufacturing Sector
The Production Sector
The Agri-Food System
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The Input Sector
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Farm Productivity
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Farm Inputs
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Hours of Farm WorkPer Acre Planted
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Crop and Animal Yields
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The Production Sector
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Net Farm Income
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Number of Farms and Dollar Salesby Annual Sales
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Changes in U.S. Land Use, 1945 vs. 1997
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U.S. Agriculture in World Trade
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Impact of Agricultural Exports
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Agricultural Exports in 1975
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Agricultural Exports in 1998
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Trading Partners 1975
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Trading Partners 1998
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The Commodity Processing-Food Manufacturing
Sector

• Transforming Commoditiesto Food Products

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What a Dollar of Food Pays For
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Agribusiness is BIG Business
112 Agribusiness Firms in the Fortune 500
9 Beverage CompaniesCoca-Cola, Pepsico
19 Food Consumer Products CompaniesH J Heinz,
Hershey
12 Food Production CompaniesTyson Foods, Gold
Kist
11 Food Service CompaniesMcDonalds, Starbucks
19 Food and Drug StoresKroger, Safeway
19 Forest and Paper ProductsWeyerhaeuser, Mead
7 Textile CompaniesWestpoint Stevens
5 Tobacco CompaniesPhilip Morris
11 Food and Grocery WholesalersSupervalu,Sysco
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The TrendsFarming to Food Factories

• Fewer but larger facilities
• Fewer but better educated employees
• A high tech business

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Discussion Questions

• List and briefly describe the six parts of the
  global agri-food system.
• Define and describe each word in the term
  agri-food system.
• Why was agriculture a prime market for the
  adoption of production-enhancing and labor-saving
  devices during the industrial revolution?
• How have Americans perceptions of food changed
  in recent years? What does this mean for firms in
  the agri-food system?
• What is the difference between science and
  technology?
• What is the role of business management in the
  success of the agri-food system?

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Discussion Questions

• Identify the three major sectors of the agri-food
  system. Describe the evolution of agriculture
  into the agri-food system.
• Describe the role of export markets and how they
  have changed in the past 25 years.
• Describe the production sectors environmental
  record.
• Describe what you see as the future of the
  agri-food system in meeting the food needs of the
  worlds population and as a place to work.
• Explain why you are optimistic or pessimistic
  about the agri-food systems ability to produce
  enough food to feed a hungry world. What are the
  biggest challenges it will face in achieving this
  crucial goal?