Week 3 ABUS 101
Week 3 ABUS 101 ABUS 101
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This 2 page Class Notes was uploaded by Melinda Notetaker on Wednesday February 17, 2016. The Class Notes belongs to ABUS 101 at California State University Chico taught by Jacob Brimlow in Winter 2016. Since its upload, it has received 12 views. For similar materials see Intro to Ag Business in Economcs at California State University Chico.
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Date Created: 02/17/16
February 8, 2016 Week 3 Introduction to Food Industry Food Industry Sector: Farm service Producers Processors Marketers Consumers *Globally the Largest and Most Important Industry! U.S.: 23% of jobs, less than 2% is production Labor is the largest part of the marketing bill (40 cents out of each $1) Farm value is 20 cents of the dollar (20%) 80% of the dollar is the marketing bill (includes labor, profit, taxes, etc.) February 10, 2016 Farm Service Sector: Produces with inputs (feed, fertilizer, fuel, and equipment) Very large, multinational cooperation’s (John Deere and Dupont) Producers Sector: All those engaged in biological processes of producing food and fiber (farmers and nurseries) Is there a difference between “family farms” and “corporate farms?” USDA- census of agriculture is every 5 years 97% are family owned Majority of farms are large In order to be considered a farm you have to sell $1,000 in products each year Processing Sector: Converts raw agricultural commodities into a variety of products consumers desire Roughly, half of spending of food is away from home Two main ideas: Commodity Processors Food Product Processors February 12, 2016 The Food Industry Money down on producers, it could affect farm service (no money to produce for crops) Vertical Integration: multiple control of supply chain Can do producers, processors, and marketers Commodity processors: (ADM, Cargill, etc.) Buy raw ag commodities from producers Ship products to industrial processing plant Convert raw ag commodities to food ingredients to be used by food products processors Food product processors Buy food ingredients and produce food we purchase in stores restaurants Concentrated (few processors provide most of our food…who are they?) Marketing sector: Creates value by changing time and place of food Link producers and consumers Makes products available year-round
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