Exploring Agribusiness and Finance

1. Agricultural Business / Finance: Unit 1-A Exploring Agribusiness andFinance

2. Objectives 1. Define the terms to know. 2. Investigate the meaning and importance of agribusiness in society. 3. Specify and explain the sectors of agribusiness. 4. Compare and discuss the importance and scope of agribusiness in Tennessee, the nation and the world.

3. 1. Terms to Know 1.Agribusiness – all operations involved in the manufacture and distribution of farm supplies; production operations on the farm; and the storage, processing and distribution of the resulting commodities and items. 2. Agricultural Economics – the study of the economic forces, monetary and physical factors that affect the profitability of the agribusiness.

4. 1. Terms to Know 3. Finance- the science of the management of money and other assets. 4. Input - supplies and services farmers use to produce crops, livestock, and other items. 5. Output – a marketable product of a farming operation, such as cash crops, livestock, and so forth.

5. 1. Terms to Know 6. Resources – the means available for production; including land, labor, capital, fertilizer, chemicals, machinery, transportation and marketing.

6. 2. Importance of Agribusiness in Society How are the pictures below related to one another?

7. 2. Importance of Agribusiness in Society The pictures on the previous slide are all related because they lay out the step by step process of how you get milk and ice cream on your table. Step 1 -Agribusiness companies (i.e. local farmer’s CO-OP) provides input supplies (feed, medication, etc.) to the production agriculturist (dairy farmer).

8. 2. Importance of Agribusiness in Society Step 2 – The production agriculturalist (dairy farmer) produces the food (his cows produce the milk). Step 3 – The output is taken by the agribusiness company (i.e. Mayfield Dairy) for processing, marketing and distributing the agricultural product (i.e. milk and ice cream).

9. 2. Importance of Agribusiness in Society Millions of people are employed in agribusiness throughout the world, and people throughout the world depend on agribusiness for their food, clothing and shelter.

10. 3. Sectors of Agribusiness There are two major sectors of the agribusiness industry – the input sector and the output sector.

11. 3. Sectors of Agribusiness Input Sector – (the supplier of inputs for farm products) Agricultural inputs provides agriculturists with the feed, seed, fertilizer, credit, machinery, fuel, chemicals, and various other things that they need to operate.

12. 3. Sectors of Agribusiness Agricultural Inputs –

13. 3. Sectors of Agribusiness Output Sector – includes all agribusinesses and individuals that handle agricultural products from the farm to the final consumer. This includes agribusinesses involved in the buying, transporting, storing, warehousing, grading, processing, assembling, packing, selling, merchandising, insuring, regulating, inspecting, communicating, advertising and financing.

14. 3. Sectors of Agribusiness Agricultural Outputs –

15. 4. Scope of Agribusiness in Tennessee - 23 percent of the approximately two million employed persons in Tennessee work in the agribusiness sector.

16. 4. National Agribusiness - Agribusiness accounts for approximately 17% of the nation’s total economic output. It is also the country’s largest single employer, providing more than one out of every five jobs.

17. 4. International Agribusiness - Agribusiness worldwide represents approximately ¼ of the total world economic production and provides employment for nearly ½ of the earth’s population.