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The Economics of Production Agriculture

The Economics of Production Agriculture. Dr. Gary Brester Dept. of Agric. Econ. and Econ. Montana State University ECNS 101. Number of Farms and Farm Workers. Source: USDA NASS. Agricultural Population. Measures of Living Standards. Percent of Income Spent on Food by Country.

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The Economics of Production Agriculture

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  1. The Economics ofProduction Agriculture Dr. Gary Brester Dept. of Agric. Econ. and Econ. Montana State University ECNS 101

  2. Number of Farms and Farm Workers Source:USDA NASS

  3. Agricultural Population

  4. Measures of Living Standards

  5. Percent of Income Spent on Food by Country

  6. U.S. Agribusiness • World’s Largest Agribusiness Sector • Largest Part of U.S. Economy • Huge Integrator of Technology • Biggest User of Biotechnology • Safest Food • Lowest Cost Food • Largest Assortment of Food • 11,000+ New Food Products per Year

  7. Percent of U.S. Disposable Income Spent on Food

  8. Consumer Expenditures for Food 1950-2009

  9. Components of2006 Food Marketing Bill

  10. U.S. Farm Productivity

  11. Productivity Growth Rates • . Average annual growth rate of output a. Agricultural output = 1.7% b. All U.S. output = 3.2% • . Increased input productivity • a. Agricultural input = 116.8% • b. All U.S. inputs = 13.4%

  12. Technological Change • 1. The amount of inputs used in agriculture has not increased a. Total agricultural output has more than doubled 2. Certainly, the composition of inputs has changed • Capital/Labor substitutions • Chemical/Labor substitutions • Chemical/Capital substitutions

  13. Farm Input Usage

  14. Technological Change • 3. Technological change has been a function of a. Commodity markets are highly competitive b. Basic research provided by public entities c. Private research by agribusinesses 4. These efforts have kept the U.S. competitive with the rest of the world 5. Concerns about future funding

  15. U.S. Crop Yields

  16. Productivity of U.S. Beef CowBreeding Herd Source: Livestock Marketing Information Center & MSU Agricultural Marketing Policy Center

  17. U.S. GMO Adoption Rates Cotton 90% Soybeans 94% Corn 88% Percent Adoption Source: USDA ERS

  18. World GMO Adoption Rates 82% 75% 32% Percent Adoption 26% Source:isaaa.org

  19. Hours of Farm WorkPer Acre Planted

  20. Number of Farms and Dollar Sales By Annual Sales

  21. U.S. Farm Ownership: 2007 Source: NASS

  22. Montana Farm Numbers/Size • . Montana Farm Numbers Have Increased Over The Past 20 years • . 1987: 24,568 Farms • . 2009: 29,400 Farms • . Largest Increase Is In The Number Of Farms Smaller Than 180 Acres • . Total Land In Farms Is Virtually Unchanged (61.4 Million Acres) • . Average Farm Size Has Decreased • . 1987: 2,482 Acres • . 2009: 2,068 Acres

  23. Montana Farm Ownership: 2007 • About 1% Non-Family Corporations And 11% Family Corporations Source: NASS

  24. U.S. Farm Ownership: 2007 Source: NASS

  25. MT Farm Numbers And Sales Percent Of Sales Number of Farms Source: NASS 2007 Census 24% of farms (7,100) produce 88% of output

  26. Farm Assets And Debt Debt/Asset Ratio: 9.2% Debt/Asset Ratio: 17.8% $1,000 Source: Montana Agricultural Statistics

  27. Montana Farm Land Values Dollars/Acre Source: Montana Agricultural Statistics

  28. Production Agriculture And Agribusiness Returns 10 Year Average Return on Assets by Industry, 1997-2006

  29. Questions?

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