Agribusiness : fundamentals and applications / 2nd ed.

Table Of Contents:
Preface xxx
About the Authors xxxi
Acknowledgments xxxii

Unit 1 Introduction to Agribusiness 1(98)

Agriculture and Agribusiness 3(20)

Introduction 4(1)

What Is Agribusiness? 4(2)

Is Farming an Agribusiness? 5(1)

Is Agribusiness the Same as Agricultural Economics? 5(1)

The Big Picture of Agribusiness 6(1)

Agribusiness Affects Us Daily 6(1)

Farming and Agriculture before Agribusiness 7(2)

Life before Agriculture 7(1)

Early Agricultural Development 8(1)

The Bronze Age 9(1)

The Iron Age 9(1)

The Middle Ages (A.D. 400--1500) 9(1)

The Evolution of Farming and Agribusiness in America 9(3)

The Era after the American Revolution 10(1)

The Agricultural and Industrial Revolution 10(1)

First Half of the Twentieth Century 11(1)

Career Option: Agricultural Scientist--George Washington Carver 12(1)

Latter Part of the Twentieth Century 12(1)

Historical Development of Modern Farm Equipment 13(1)

Beginning of Change 13(1)

From Manpower to Horsepower 14(1)

The Steam Era 14(1)

Internal Combustion Engine 14(1)

Fuels Used 14(1)

The Beginning of Internal Combustion Engines 14(1)

Farm Tractors 15(2)

The First Gasoline-Powered Tractor 15(1)

Effect of World War I on Tractor Production 15(1)

Effect of the Depression Years on Tractor Production 15(1)

Henry Ford and the Tractor 15(1)

Power Take-Off Units, Tricycle-Type Tractors, and Rubber-Tired Tractors 16(1)

Effect of the Shift from Animal Power to Tractor Power 16(1)

Decreased Demand for Animal Feed 16(1)

Reduced Labor Time and Cost 16(1)

Advent of Various Fuels 16(1)

Modern Tractor Accessories 16(1)

Increased Size and Four-Wheel Drive 16(1)

Success of American Agribusiness 17(1)

Conclusion 18(1)

Summary 18(1)

End of Chapter Activities 19(1)

Review Questions 19(1)

Fill in the Blank 20(1)

Matching 21(1)

Activities 22(1)

Agricultural Economics and the American Economy 23(18)

Introduction 24(1)

Definitions of Economics 24(1)

Three Major Components of Economics 24(2)

Scarcity 24(1)

Shortage versus Scarcity 24(1)

Types of Resources 25(1)

Natural Resources (Land) 25(1)

Human Resources (Labor) 25(1)

Manufactured Resources (Capital) 25(1)

Entrepreneurship (Management) 25(1)

Wants and Needs 25(1)

Three Basic Economic Questions 26(1)

What Goods, and How Much, to Produce 26(1)

How to Produce Goods 26(1)

Who Should Get What? 26(1)

Combining the Economic Ingredients 26(1)

What Type of Pie to Produce? 26(1)

What Combination of Ingredients to Use? 26(1)

How to Divide the Pie? 26(1)

Economic Systems 27(2)

Traditional System 27(1)

Capitalism 27(1)

Socialism 27(1)

Fascism 28(1)

Communism 28(1)

Mixed Economic Systems 28(1)

American Economy Is Mixed 28(1)

American Agriculture and the Mixed Economic System 28(1)

Economics---A Historical Perspective 29(1)

The Father of Economics 29(1)

Adam Smith's Proposed Economic System 29(1)

The Influence of David Ricardo and Thomas Malthus 29(1)

The Role of Government versus the Role of Individuals 29(1)

Economic Classification According to the Role of Government in Economic Decisionmaking 29(1)

Classical Economic Theory 29(1)

Keynesian Economics 30(1)

Competition 30(1)

Individual Economic Freedom 30(1)

Political Party Philosophy 30(1)

Characteristics of the American Economy 30(2)

The Role of Government 31(1)

Freedom of Enterprise 31(1)

Freedom of Choice 31(1)

Private Property 31(1)

Profit Incentive 32(1)

Competition 32(1)

Macroeconomics versus Microeconomics 32(1)

Macroeconomics 32(1)

Gross Domestic Product 32(1)

Aggregate Supply 32(1)

Aggregate Demand 32(1)

Unemployment Rate 33(1)

Inflation and Deflation 33(1)

Monetary Policy 33(1)

Fiscal Policy 33(1)

Microeconomics 33(1)

Markets and Prices 33(1)

Supply and Demand 33(1)

Competition and Market Structure 33(1)

Income Distribution 33(1)

Business Failures 33(1)

Role of Government 33(1)

Positive versus Normative Economics 33(2)

Positive Economics 33(1)

Cost-Benefit Analysis 34(1)

Normative Economics 34(1)

Political Campaign Statements 34(1)

Interrelationship between Positive and Normative Economics 34(1)

Agricultural Economics 35(1)

Career Option: Agricultural Economist 35(1)

Early Agricultural Economics Centered around Farm Production 35(1)

Specialty Areas in Agricultural Economics 36(1)

Conclusion 36(1)

Summary 37(1)

End of Chapter Activities 38(1)

Review Questions 38(1)

Fill in the Blank 38(1)

Matching 39(1)

Activities 39(2)

The Size and Importance of Agribusiness 41(21)

Introduction 42(1)

Size and Importance of Production Agriculture 42(3)

Land 42(1)

Products 42(2)

Percent of Food Dollar to the Production Agriculturalist 44(1)

Efficiency of Production Agriculture 45(1)

Why Is Efficiency So Important? 46(1)

U.S. Agriculture and the Global Economy 46(2)

Issues 47(1)

Magnitude 47(1)

Events Shaping the Global Agricultural Market 47(1)

World Trade 47(1)

The Agribusiness Economy 48(1)

The Agribusiness Input Sector 48(1)

The Agribusiness Output Sector 48(1)

Processing and Manufacturing Sector 49(1)

Agriservices 49(3)

Public Agriservices 50(1)

Private Agriservices 50(2)

Financial Services 52(1)

Trade Associations 52(1)

Agricultural Cooperatives 52(1)

Agribusiness and Foreign Trade 52(1)

Agribusiness and Energy 53(1)

Agriculture as a User of Energy 53(1)

Energy Produced from Renewable Agricultural Products 53(1)

Direct Burning 53(1)

Ethanol Production 53(1)

Biodiesel 53(1)

Methane Gas Production 53(1)

Sun and Water 54(1)

Agribusiness Energy as a Petroleum Alternative 54(1)

Agribusiness and the Environment 54(1)

Case Study 1: MTSU's Dr. Cliff Ricketts Hybrid Hydrogen Truck 55(1)

Career Options: Environmental Manager, Conservationist 56(2)

Environmentalists in Agribusiness 56(2)

Natural Resources Conservation Service 58(1)

Summary 58(1)

End of Chapter Activities 59(1)

Review Questions 59(1)

Fill in the Blank 60(1)

Matching 60(1)

Activities 61(1)

Emerging Agribusiness Technologies 62(37)

Introduction 63(1)

Global Positioning 63(1)

Purpose of Global Positioning and Field Management 63(1)

Origin of the Global Positioning System 63(1)

Global Positioning and the Environment 64(1)

Precision Farming 64(1)

Genetic Engineering 64(3)

Advantages of Using Genetic Engineering 65(1)

Transforming a Single Gene 65(1)

Transfer to a Totally Unrelated Plant 65(1)

Making Hybrids from Plants That Cannot Be Cross-Pollinated 65(1)

Producing Disease-Resistant Plants 65(1)

Producing Plants That Are Toxic to Insects But Not Humans 65(1)

Producing Crops That Are Tolerant of Herbicides 65(1)

Gene Splicing 66(1)

Cloning 67(2)

Cloning Plants 68(1)

Embryo Splitting 68(1)

Embryo Transfer 68(1)

Advantages of Embryo Transfers 68(1)

Gender Selection 69(4)

Sperm-Sexing Procedure 69(1)

Advantages of Sperm Sexing 70(1)

Sorting Embryos According to Sex 71(1)

Modifying Gender in Fish by Ultraviolet Light 71(2)

Production Hormones 73(2)

Animal Growth Hormones 73(1)

Bovine Somatotropin 73(1)

Porcine Somatotropin 74(1)

Fish Growth Hormones 74(1)

Heat Synchronization 74(1)

Animal Research and Human Medicine 75(1)

Swine Research for Human Health 75(1)

Transplantation Technology 75(1)

Xenotransplantation 75(1)

Pharmaceutical and Other Medical Products Made from Animal Products 76(1)

Help for Heart Patients 76(1)

Help for Burn Victims 76(1)

Help for AIDS Patients 76(1)

Production of Hepatitis B Vaccine 76(1)

Help for Leprosy Patients 76(1)

Using Leeches to Increase Blood Circulation 76(1)

Domestic Animals of the Future 76(2)

Dairy Cattle 76(1)

Beef Cattle 76(1)

Swine 77(1)

Poultry 77(1)

Sheep 77(1)

Catfish 77(1)

Bees 77(1)

Transgenic Animals 77(1)

Computerized and Electronic Animal Management Technologies 78(1)

Agricultural Computer Use 78(1)

Electronic Animal Management Systems 78(1)

Robotic Milking System 78(1)

Electronic Sensors 79(1)

Robotic Sheep Shearing 79(1)

Birthing Sensors 79(1)

Live Animal and Carcass Evaluation Devices 79(1)

X-Ray Scanners 79(1)

Measuring Percentages of Red Tissues 79(1)

Ultrasound Imaging 79(1)

Emerging Mechanical Technologies in the Plant Industry 79(1)

Tissue Culture 80(1)

Career Options: Aquaculture Research, Genetic Engineering, Hydroponics, Plant Breeding, Plant Propagation, and Tissue Culture 81(1)

Special Skills Required 82(1)

Advantages and Disadvantages of Tissue Culture 82(1)

Advantages 82(1)

Disadvantages 82(1)

Emerging Plant Technologies 82(1)

Frost-Protected Plants 82(1)

Plant Growth Regulators 82(1)

Salt-Tolerant Plants 82(1)

Integrated Pest Management 82(2)

Rationale for IPM 83(1)

Cultural Control of Pests 83(1)

Mechanical Control of Pests 83(1)

Biological Control of Pests 83(1)

Example of Biological Control 83(1)

Pesticide Control of Pests 83(1)

Hydroponics and Aquaculture in Extended Space Travel 84(6)

Aquaculture in Space 84(1)

Utilization of Plant Residue (Stalks) in Space 84(1)

Hydroponic Plant Growth 85(1)

Tank Culture 85(1)

Modified Drip System 85(1)

Flood System 86(1)

Airoponics 86(1)

Differences When Using Hydroponic Systems in Space and on Earth 86(1)

Thirteen Essential Elements for Growing Plants Hydroponically 86(1)

Macroelements 86(1)

Microelements (Trace Elements) 87(1)

Keeping the Hydroponic Solution Fully Active 88(1)

Technologies Used for Hydroponic Growing 88(1)

NASA Discoveries from the CELSS Project 89(1)

Adoption of NASA Research 89(1)

Hydroponics Projects 89(1)

Geothermal Heating Systems 89(1)

Aquaculture Projects 90(1)

Other Emerging Agribusiness Technologies 90(2)

Light Detection and Ranging Systems 90(1)

Feed Formulation Software 90(1)

Biosensors 90(1)

Ranch Management Software 91(1)

Auction Tools and Technologies 91(1)

Radio-Frequency Identification Tags 91(1)

Heat-Map Systems 91(1)

Biofuels 91(1)

Conclusion 92(1)

Summary 92(2)

End of Chapter Activities 94(1)

Review Questions 94(1)

Fill in the Blank 95(1)

Matching 95(1)

Activities 96(3)

Unit 2 Starting and Running an Agribusiness 99(212)

Planning and Organizing an Agribusiness 101(22)

Introduction 102(1)

Importance of Small Businesses 102(1)

Small Businesses Are Not Really Small 102(1)

Entrepreneur in Agribusiness---Is It for Me? 103(1)

General Characteristics of Entrepreneurs 103(1)

Personal Characteristics of Entrepreneurs 103(1)

Independent 104(1)

Self-Confident 104(1)

Energetic 104(1)

Organized 104(1)

Visionary 104(1)

Persistent 104(1)

Optimistic 104(1)

Committed 104(1)

Problem Solver 104(1)

Self-Nurturing 104(1)

Risk Taker 104(1)

Action-Oriented 104(1)

Has a Sense of Urgency 104(1)

Flexible 104(1)

Emotionally Stable 104(1)

Challenges of Entrepreneurship 104(1)

Total Responsibility 104(1)

Long, Irregular Hours 104(1)

Financial Risks 104(1)

Career Option: Entrepreneur 105(1)

Why Agribusinesses Fail 106(1)

Management 106(1)

Labor 106(1)

Financial Resources 107(1)

Undercapitalization 107(1)

Analyzing Your Agribusiness Venture 107(2)

Recognizing a Need 107(1)

Agribusiness Startup Factors to Consider 107(1)

What Financial Resources Are Needed to Get Started? 108(1)

What Labor Does the Agribusiness Need? 108(1)

What Management Requirements Exist? 108(1)

Does a Market Exist for the Product or Service? 108(1)

Where Should the Agribusiness Be Located? 108(1)

Should You Buy an Agribusiness or Start a New One? 108(1)

Advantages 108(1)

Disadvantages 108(1)

Applying Business Fundamentals 108(1)

Conducting a Business Survey 109(1)

Preparing a Business Plan 109(4)

Cover Sheet 110(1)

Introduction 110(1)

Table of Contents 110(1)

The Organizational Plan 110(1)

Summary Description of the Business 110(1)

Products or Services 110(1)

Intellectual Property 110(1)

Location 111(1)

Legal Structure 111(1)

Management 111(1)

Personnel 111(1)

Accounting 111(1)

Legal 111(1)

Insurance 111(1)

Security 111(1)

The Marketing Plan 111(1)

Overview and Goals of Your Marketing Strategy 111(1)

Market Analysis 111(1)

Marketing Strategy 111(1)

Implementation of Marketing Strategies 112(1)

Customer Service 112(1)

Assessment of Marketing Effectiveness 112(1)

Financial Documents 112(1)

Summary of Financial Needs 112(1)

Loan Fund Dispersal Statement 112(1)

Pro Forma Cash Flow Statement (Budget) 112(1)

Three-Year Income Projection 112(1)

Projected Balance Sheet 112(1)

Break-Even Analysis 112(1)

Appendix (Supporting Documents) 112(1)

Personal Resumes 112(1)

Owner's Financial Statements 112(1)

Credit Reports 112(1)

Contracts 112(1)

Letters of Reference 113(1)

Other Legal Documents 113(1)

Miscellaneous Documents 113(1)

The Completed Plan 113(1)

Major Areas of Agribusiness Management 113(2)

Planning 113(1)

Organizing 113(1)

Directing (Leading) 114(1)

Staffing 114(1)

Controlling 114(1)

Goal Setting 115(2)

Setting Your Agribusiness Goals 115(1)

Write Down Your Goals 115(1)

Organize Your Goals 115(1)

Reaching Your Goals 115(1)

Manage Your Time 115(1)

Establish Priorities 116(1)

Breaking Goals into Manageable Units 116(1)

Example of Business Goals 116(1)

Problem Solving and Decisionmaking 117(1)

Skills Needed in Problem Solving and Decisionmaking 117(1)

Various Styles of Decisionmaking 117(1)

Reflexive Decisionmaking 117(1)

Reflective Decisionmaking 117(1)

Consistent Decisionmaking 117(1)

Steps in Problem Solving and Decisionmaking 117(1)

Conclusion 118(1)

Summary 118(1)

End of Chapter Activities 119(1)

Review Questions 119(1)

Fill in the Blank 120(1)

Matching 120(1)

Activities 121(2)

Types of Agribusiness 123(19)

Introduction 124(1)

Comparison of Proprietorships, Partnerships, and Corporations 124(1)

Single, or Sole, Proprietorship 124(1)

Advantages of Sole Proprietorship 125(1)

Disadvantages of Sole Proprietorship 125(1)

Partnerships 125(3)

Types of Partnerships 126(1)

General Partnership 126(1)

Limited Partnership 126(1)

Limited Liability Partnership 127(1)

Advantages of Partnerships 127(1)

Disadvantages of Partnerships 128(1)

Written Partnership Agreements 128(1)

Corporations 128(5)

Characteristics of Corporations 129(1)

Types of Corporations 129(1)

Subchapter C (Regular) Corporation 129(1)

Subchapter S (Small Business or Family) Corporation 130(1)

Subchapter T Corporations (Cooperatives) 130(1)

Advantages of Corporations 131(1)

Disadvantages of Corporations 131(1)

Establishing a Corporation 132(1)

Limited Liability Companies 133(1)

Advantages of LLCs 133(1)

Disadvantages of LLCs 133(1)

Cooperatives 133(2)

Kinds of Cooperatives 133(1)

Supply (Purchasing) Cooperatives 133(1)

Marketing Cooperatives 134(1)

Service Cooperatives 134(1)

Statistics on Cooperatives 134(1)

Cooperatives and Membership 134(1)

Cooperatives and Control 134(1)

Distinguishing Characteristics of Cooperatives 134(1)

Cooperatives and Taxes 135(1)

Advantages of Cooperatives 135(1)

Disadvantages of Cooperatives 135(1)

Franchises 135(2)

Characteristics of Franchises 136(1)

Advantages of Franchises 136(1)

Disadvantages of Franchises 136(1)

Career Options: Agribusiness Owner/Manager, Agribusiness Partnership, Agribusiness Corporation, Agribusiness Cooperative, Agribusiness Franchise 137(1)

Conclusion 137(1)

Summary 137(1)

End of Chapter Activities 138(1)

Review Questions 138(1)

Fill in the Blank 139(1)

Matching 139(1)

Activities 140(2)

Financing the Agribusiness 142(20)

Introduction 143(1)

Importance of Farm Credit 143(1)

Change in Credit Needs 143(1)

Magnitude of Agricultural Credit 143(1)

Successful Farm Credit Objectives 144(1)

Three Fundamentals of Credit 144(1)

Returns 144(1)

Repayment Ability 144(1)

Risk 144(1)

Rational Credit Principles 145(1)

Three Areas of Credit Needs 145(1)

Fixed Expenses 145(1)

Land 145(1)

Buildings 145(1)

Machinery and Equipment 145(1)

Fixtures and Tools 145(1)

Operating Expenses 146(1)

Startup Expenses 146(1)

Length of Financing 146(1)

Short-Term Loans 146(1)

Intermediate-Term Loans 146(1)

Long-Term Credit 147(1)

Types of Loans 147(1)

Line of Credit 147(1)

Revolving Line of Credit 147(1)

Term Loan 148(1)

Components of a Credit Profile 148(5)

Computing Interest 153(3)

Interest Rates 153(1)

Simple Interest 153(1)

Remaining Balance Method 153(1)

Add-On Method 153(1)

Amortization Tables 154(1)

Feasibility 154(2)

Profitability Index 156(1)

Agricultural Credit Sources for Real Estate and Non-Real Estate Loans 156(1)

Non-Real Estate Loans 156(1)

Real Estate Loans 157(1)

Career Option: Farm Credit Officer 157(1)

Conclusion 157(1)

Summary 158(1)

End of Chapter Activities 159(1)

Review Questions 159(1)

Fill in the Blank 159(1)

Matching 160(1)

Activities 160(2)

Personal Financial Management 162(41)

Introduction 163(1)

Earning Money 163(3)

Gross versus Net Pay 163(1)

Mandatory Deductions 163(1)

Employee Benefits 164(1)

Taxes and Benefits Summary 164(2)

Selecting a Financial Institution 166(1)

Types of Institutions 166(1)

Factors to Consider in Choosing a Financial Institution 166(1)

Checking Accounts 166(5)

Use Caution 166(2)

Reasons for Writing Checks 168(1)

Points to Remember When Writing Checks 168(1)

Steps in Writing a Check 168(1)

Keeping a Checkbook Register 169(1)

Entering Checks Written 169(1)

Entering Deposits 169(1)

Entering Service Charges 169(1)

Balancing (Reconciling) Your Checkbook 170(1)

Importance of Balancing Your Checking Account Monthly 170(1)

Common Reasons Why Checkbook Registers and Account Statements Differ 170(1)

Steps in Balancing (Reconciling) a Bank Statement 170(1)

Where Your Money Goes 171(2)

Handling Money Takes Discipline 171(1)

Fixed Expenses 171(1)

Mortgage or Rent Payments 171(1)

Other Real Estate Payments 172(1)

Income and Property Taxes 172(1)

Installment Contract Payments 172(1)

Insurance 172(1)

Regular Contributions 172(1)

Dues 172(1)

Savings 172(1)

Variable Expenses 172(1)

Utilities 172(1)

Charge Accounts 172(1)

Medical/Dental Bills Not Covered by Insurance 172(1)

Transportation 173(1)

Household Maintenance and Repair 173(1)

Child Care 173(1)

Food 173(1)

Personal Maintenance 173(1)

Self-Improvement/Education 173(1)

Recreation/Entertainment 173(1)

Other Expenses 173(1)

Planning and Preparing a Budget 173(2)

Benefits of a Budget 174(1)

Budget while Still Living at Home 174(1)

Living on Your Own Budget 174(1)

Family Budgets 175(1)

Financial Management and Security Tips 175(10)

Limit Debt 175(3)

Do Not Use Credit Cards 178(1)

Credit Card Alternative 179(1)

Credit Scores 179(1)

Protect Your Credit Rating 179(1)

Save Big Money on Home Mortgages 180(1)

15-Year Rather than 30-Year Loans 180(1)

Pay an Additional Payment per Year 180(1)

Divide the Total into Two Monthly Payments 180(1)

Increasing Retirement Benefits 181(1)

Reduce Debt by Using the Debt Snowball Technique 181(1)

Rationale 181(1)

Procedure 181(1)

What about the House? 181(1)

I Need a Car 181(1)

Attitude toward Debt 182(1)

Develop Power over Purchases 182(1)

Live within and below Your Income 182(1)

Paying Cash for a Car versus Going into Debt 182(1)

Negotiate and Buy Only Big Bargains 182(1)

Build an Emergency Fund 183(1)

Manage Your Budget Busters 183(1)

Envelope System 183(1)

Have Enough Insurance 184(1)

Master the Magic of Compound Interest 184(1)

Use an Automatic Savings Plan 184(1)

Take Advantage of Matching Stock Purchases 184(1)

Use Your Hobby to Make Money 184(1)

Retiring as a Millionaire 185(4)

Plan One: $2,000 a Year for Six Years 185(2)

Plan Two: Buy a Used Car Instead of a New One and Invest the Difference 187(1)

What about the Repairs? 187(2)

Plan Three: The 25-Plus-10 Plan 189(1)

Plan Four: The 80-10-10 Plan 189(1)

Key Factors in Making the Millionaire Plans Work 189(4)

Manage Investments to Achieve a 12 Percent Interest Rate 189(1)

Difference in 1 Percent (0.01) Interest Rate 190(1)

The Rule of 72 190(1)

Invest in Mutual Funds to Achieve a 12 Percent Interest Rate 190(1)

Types of Mutual Funds 191(1)

Are Mutual Funds Risky? 191(1)

Are Mutuals the Only Investment? 191(1)

More Information 191(1)

Tax-Deferred Savings 192(1)

Tax-Free Earnings 192(1)

Amount Invested 192(1)

Required Distributions 193(1)

Estate Tax Reduction 193(1)

Early Distributions 193(1)

When Do I Get My Money? 193(1)

Financial Security 193(1)

Financial Security Defined 193(1)

Assumptions for Reaching Financial Security 193(1)

Career Options: Avocational (Part-Time) Production Agriculture, Agribusiness Recreation, Agricultural Mechanic, Nursery Production 194(4)

Selecting Part-Time Agricultural Enterprises 194(1)

The $2,000 Work-Unit Approach 194(2)

Procedures for Potentially Achieving Financial Security by Age 30 to 34 196(1)

Invest Earnings in Tax-Free Bond Mutual Funds 196(1)

Change in Strategy 196(1)

Limitations on Potentially Achieving Financial Security through Avocational Enterprises 196(2)

Levels of Financial Management 198(1)

Conclusion 198(1)

Summary 198(1)

End of Chapter Activities 199(1)

Review Questions 199(1)

Fill in the Blank 200(1)

Matching 200(1)

Activities 201(2)

Agribusiness Recordkeeping and Accounting 203(31)

Introduction 204(1)

Role of the Financial Manager 204(1)

Sources of Income 204(1)

Expenses 204(1)

Accounting versus Bookkeeping 204(2)

Bookkeeping 205(1)

Accounting 205(1)

The Six-Step Accounting Cycle 205(1)

Analyze and Categorize Documents 205(1)

Record the Information into Journals 205(1)

Post the Preceding Information into Ledgers 205(1)

Prepare a Trial Balance 205(1)

Prepare an Income Statement, Balance Sheet, and Statement of Cash Flows 205(1)

Analyze the Financial Statements 206(1)

Budgets 206(1)

The Operating Budget 206(1)

The Cash-Flow Budget 206(1)

The Capital Expenditures Budget 207(1)

Relationships between the Operating, Capital Expenditures, and Cash-Flow Budgets 207(1)

Single-Entry Bookkeeping System 207(2)

Separate Business Accounts from Personal Accounts 207(1)

Sales Slips plus Checking Account 208(1)

Double-Entry Bookkeeping System 209(1)

Recording the Transaction in Two Places 209(1)

Keeping the Books Balanced 210(1)

Journals and Ledgers 210(4)

Journals 210(1)

Use of the Journal 211(1)

Why Use a Journal? 211(1)

The Ledger 211(1)

Parts of the Ledger 211(1)

Posting 211(3)

Trial Balance 214(1)

Limitations of the Trial Balance 214(1)

Basic Accounting Considerations 214(4)

Assets and Liabilities 214(1)

Capital and Owner Equity 214(2)

Revenue, Cost of Sales, and Net Profit 216(1)

Operating and Incidental Expenses 216(1)

Inventory 216(1)

When to Inventory 216(1)

Determining Inventory Value 216(1)

Depreciation 216(1)

Real Estate Depreciation 216(1)

Calculating Depreciation 217(1)

Principal and Interest Payments 217(1)

Profit and Loss 217(1)

Preparing an Income Statement, Balance Sheet, and Statement of Cash Flows 218(6)

Income Statement 218(1)

Revenue 218(1)

Expenses 219(1)

Taxes 219(1)

Other 220(1)

Cash or Accrual? 220(1)

Determining the Transaction Date 220(1)

Balance Sheet 220(1)

Current Assets and Liabilities 220(1)

Intermediate Assets and Liabilities 220(1)

Long-Term Assets and Liabilities 221(1)

Net Worth 221(1)

Statement of Cash Flows 221(1)

Comparison of Cash-Flow Statement and Statement of Cash Flows 222(1)

Sources of Cash Flows 222(2)

Statement of Owner Equity 224(1)

Explanation of the Statement of Owner Equity 224(1)

Analyzing Financial Statements 225(2)

Compare All Financial Statements with Each Other 225(1)

Objective of Financial Analysis 226(1)

Methods of Financial Analysis 226(1)

Liquidity Ratio 226(1)

Leverage (Debt) Ratios 226(1)

Profitability (Performance) Ratios 226(1)

Activity Ratios 227(1)

Inventory Turnover Ratio 227(1)

Computer Technology and Agribusiness Records 227(1)

Filing Taxes with Computer Software 227(1)

Career Options: Accountant, Bookkeeper, Financial Manager, Management Analyst 228(1)

Conclusion 228(1)

Summary 229(1)

End of Chapter Activities 230(1)

Review Questions 230(1)

Fill in the Blank 231(1)

Matching 231(1)

Activities 232(2)

Managing Human Resources 234(19)

Introduction 235(1)

Considerations as Employees Are Hired for Agribusiness 235(1)

Determine Job Requirements 235(1)

Determine Cost of Labor 235(1)

Recruitment 235(1)

Selection 235(1)

Application 235(1)

Resume 236(1)

Interview 236(1)

Orientation and Training 236(1)

Working with Employees 236(3)

Motivating Employees 239(5)

Hawthorne Effect 239(1)

Maslow's Hierarchy of Needs 239(1)

McGregor's Theory X and Theory Y 239(1)

Theory X 240(1)

Theory Y 240(1)

Theory Z 241(1)

Herzberg's Motivating Factors 241(2)

Motivators 243(1)

Hygiene Factors 243(1)

Money Isn't Everything 243(1)

Job Motivation 243(1)

Setting Goals and Objectives 244(1)

Listening to Employees 244(1)

Evaluating Employees 244(1)

Laws Affecting the Management of Human Resources 245(3)

Laws That Apply to Agribusinesses of Any Size 246(1)

Fair Labor Standards Act 246(1)

Social Security 246(1)

Federal Insurance Contributions Act 247(1)

Medicare 247(1)

Equal Pay Act 247(1)

Immigration Reform and Control Act 247(1)

Federal Unemployment Tax Act 247(1)

Laws That Apply to Agribusinesses with More than 10 Employees 247(1)

Occupational Safety and Health Administration Act 247(1)

Laws That Apply to Agribusinesses with More than 14 Employees 247(1)

Title VII of the Civil Rights Act 247(1)

Americans with Disabilities Act 247(1)

Pregnancy Discrimination Act 248(1)

Laws That Apply to Agribusinesses with More than 19 Employees 248(1)

Age Discrimination in Employment Act 248(1)

Older Worker Benefit Protection Act 248(1)

Consolidated Omnibus Budget Reconciliation Act 248(1)

Laws That Apply to Larger Agribusinesses 248(1)

Family and Medical Leave Act 248(1)

Worker Adjustment and Retraining Notification Act 248(1)

Employee Retirement Income Security Act 248(1)

Conclusion 248(1)

Summary 249(1)

End of Chapter Activities 249(1)

Review Questions 249(1)

Fill in the Blank 250(1)

Matching 250(1)

Activities 251(2)

Farm Management 253(34)

Introduction 254(1)

Importance of Farm Management 254(1)

Basics of Farm Management 254(2)

What Is a Manager? 254(1)

Three Basic Functions of Management 255(1)

The Challenge of Farm Management 255(1)

Enterprise Selection 256(3)

Determine Your Goals 256(1)

Inventory Your Resources 256(1)

List the Physical, Financial, and Management Factors Involved 257(1)

Physical Factors 257(1)

Financial Factors 257(1)

Management Factors 257(1)

Develop a List of Potential Enterprises 257(1)

Compatibility with Resources 258(1)

Growing Considerations 258(1)

Compatibility among Enterprises 259(1)

Depreciation 259(2)

What Qualifies as a Depreciable Asset? 259(1)

Reasons for Using Depreciation 260(1)

Methods of Depreciation 261(1)

Straight-Line Depreciation 261(1)

Accelerated Cost Recovery System 261(1)

Modified Accelerated Cost Recovery System 261(1)

Machinery Cost Calculations 261(1)

Ownership Costs 261(1)

Operating Costs 262(1)

Agribusiness Budgeting 262(4)

Complete Budgeting 262(1)

Importance 262(1)

Purpose 262(1)

Partial Budgeting 263(1)

Calculating a Partial Budget 263(1)

Enterprise Budgeting 263(1)

Explanation 263(1)

Purpose 264(1)

Developing an Enterprise Budget 264(1)

Break-Even Analysis 265(1)

Cash-Flow Budget 265(1)

Importance 266(1)

Developing a Cash-Flow Budget 266(1)

Analyzing Your Budget 266(1)

Farm Recordkeeping 266(11)

Selecting an Appropriate Farm Record System 266(2)

Farm Record Uses 268(1)

Net Worth Statement (Balance Sheet) 269(1)

Valuing the Assets 269(1)

Operational Liabilities 269(1)

Farmer's Equity 269(1)

Usefulness 269(2)

Farm Income Statement 271(1)

Cash Income 271(1)

Accrual Adjustments 271(1)

Cash Expenses 271(1)

Adjustments to Expenses 271(3)

Summarizing 274(1)

Cash-Flow Statement 274(1)

Statement of Owner Equity 274(1)

Employing Farm Records for Analysis 274(1)

Financial Performance Measures 274(3)

Other Farm Management Issues 277(1)

Managing Risk and Uncertainty 277(1)

Uncertainty 277(1)

Risk 277(1)

Income Tax Management 278(1)

Whole-Farm Planning 278(2)

Family Planning 278(1)

Long-Term Vision 279(1)

Setting Goals 279(1)

Making an Inventory and Assessment of Farm Resources 279(1)

Developing and Implementing an Action Plan 279(1)

Monitoring Farm Progress toward Goals 280(1)

Conclusion 280(1)

Summary 280(2)

End of Chapter Activities 282(1)

Review Questions 282(1)

Fill in the Blank 282(1)

Matching 283(1)

Activities 284(3)

Production Economics 287(24)

Introduction 288(2)

Economics in Society 288(1)

The U.S. Food and Fiber System 288(1)

Comprehensive View of the Economy 289(1)

Economics Basics 290(3)

Scarcity of Resources 290(1)

Basic Economic Concepts 291(1)

Supply and Demand 291(1)

Opportunity Cost 292(1)

Diminishing Returns 293(1)

Marginality 293(1)

Costs and Returns 293(1)

Externalities 293(1)

The Production Function 293(4)

Factors of Production 294(1)

Inputs 294(1)

Outputs 294(1)

Production Equations 294(1)

Total Product 294(1)

Average Product 295(1)

Marginal Product 295(1)

Other Production Equations 295(1)

Three Stages of Production 295(1)

Stage I 295(1)

Stage II 296(1)

Stage III 296(1)

Principle of Diminishing Returns--Input Basis 296(1)

Purpose of Diminishing Returns 297(1)

Returns to Scale 297(1)

Production Efficiency 297(1)

The Cost Function 297(2)

Short-Run Costs 297(1)

Total Costs 298(1)

Average Total Costs 298(1)

Marginal Costs 298(1)

Relationships between Costs 298(1)

Long-Run Average Costs 298(1)

Economies of Scale 298(1)

Resource Substitution 299(3)

Marginal Rate of Substitution 300(1)

Isoquant Curve 300(1)

Types of Substitutes 300(1)

Isocost Line 301(1)

Least-Cost Combination of Inputs 302(1)

Profit Maximization 302(1)

The Totals Approach 302(1)

The Marginal Approach 303(1)

Conclusion 303(1)

Summary 303(3)

End of Chapter Activities 306(1)

Review Questions 306(1)

Fill in the Blank 307(1)

Matching 308(1)

Activities 309(2)

Unit 3 The Agribusiness Input (Supply) Sector 311(120)

Supplies, Machinery, and Equipment 313(30)

Introduction 314(1)

Changes in the Agribusiness Input Sector 314(1)

Size of the Agribusiness Input Sector 315(1)

Types of Agribusiness Inputs 315(1)

Major Agribusiness Inputs 315(1)

Minor Agribusiness Inputs 315(1)

Agribusiness Inputs That Are Often Overlooked 315(1)

Feed Industry 315(3)

Historical Development 315(1)

Feed Production and Consumption 316(1)

Types of Feed 316(1)

Market Structure 316(2)

Careers in the Feed Industry 318(1)

Fertilizers 318(4)

Fertilizer Analysis 318(2)

Nitrogen 320(1)

Phosphate 321(1)

Potassium 321(1)

Fertilizer Use 321(1)

Environmental Policy 321(1)

Interrelationships among Fertilizers, Pesticides, and Other Chemicals 321(1)

Careers in the Fertilizer Industry 322(1)

Pesticides 322(2)

Types of Pesticides 322(1)

Historical Background 322(1)

Discovery of Herbicides 323(1)

Discovery of Fungicides and Insecticides 323(1)

DDT 324(1)

Benefits of Pesticides 324(1)

Concerns about Pesticides 324(1)

Careers 324(1)

Farm Supply Stores 324(2)

Types of Farm Supply Stores 325(1)

Farmer Cooperatives 325(1)

Farmer Supply Chain Stores 325(1)

Career Options: Animal Nutritionist, Feed Formulator, Pesticide Applicator, Pesticide Specialist, Seed Analyst, Fertilizer Chemist 326(1)

Single (Sole) Proprietorship Feed and Supply Stores 327(1)

Farm Machinery and Equipment 327(1)

Market Structure 327(1)

Full-Line Companies 327(1)

Long-Line Companies 327(1)

Short-Line Companies 327(1)

Size of the Farm Machinery and Equipment Market 328(1)

Diversification of Farm Machinery and Equipment Companies 328(1)

Foreign Trade 329(1)

Exports 329(1)

Imports 329(1)

Trends in the Farm Machinery and Equipment Industry 329(1)

Mergers 330(1)

Products of the Farm Machinery and Equipment Manufacturers 330(1)

Careers in Farm Machinery and Equipment Manufacturing 330(1)

Factory Jobs 330(1)

Office and Professional Jobs 331(1)

Farm Machinery and Equipment Wholesalers 331(4)

Careers in Wholesaling 331(4)

Dealerships 335(1)

A Complex Business 335(1)

Dealership Careers 335(1)

Farm Custom and Contracting Services 336(1)

Custom Farming 336(1)

Farm Contracting Services 336(1)

Conclusion 336(1)

Career Option: Agricultural Equipment Dealer 337(1)

Summary 337(2)

End of Chapter Activities 339(1)

Review Questions 339(1)

Fill in the Blank 340(1)

Matching 341(1)

Activities 342(1)

Economic Activity and Analysis 343(21)

Introduction 344(1)

Economic Activity in the United States 344(2)

Purpose of the Economist 344(1)

The Great Depression 344(1)

Business Cycles and Patterns 344(1)

Economic Recovery 345(1)

Peak 345(1)

Contraction 345(1)

Trough 345(1)

Circular Flow of the Economy 345(1)

Specific Explanation of Circular Flow 345(1)

Your Effect on the Circular Flow 345(1)

Interdependence 346(1)

Measuring Economic Activity via Economic Indicators 346(1)

Gross Domestic Product 346(1)

Determining Economic Growth 347(1)

Standard of Living 347(1)

Inflation 347(3)

Inflation and the Purchasing Power of Money 347(1)

Losing from Inflation 347(1)

Gaining from Inflation 348(1)

Measuring Inflation 348(1)

Calculating Inflation from the Consumer Price Index 348(1)

Unemployment 349(1)

Calculating the Unemployment Rate 349(1)

Types of Unemployment 349(1)

Why Unemployment Matters as an Economic Indicator 349(1)

Value of Economic Indicators 349(1)

Money and Banks 350(1)

Different Types of Money 350(1)

Fiat Money 350(1)

Commodity Money 350(1)

Bank Money 350(1)

Functions of Money 350(1)

Medium of Exchange 350(1)

Storage Value 350(1)

Standard of Value 350(1)

How Banks Create Money 350(1)

The Federal Government and Economic Stability 351(1)

Fiscal Policy 351(1)

Government Expenditures 351(1)

Taxes 351(1)

Monetary Policy 352(1)

Slowing Down the Economy 352(1)

Speeding up the Economy 352(1)

Independence of the Federal Reserve System 352(1)

Basis of Economic Policy 352(1)

Positive Economics 352(1)

Normative Economics 352(1)

The Nation's Economic Goals 352(3)

Economic Growth 353(1)

Economic Stability 353(1)

Production Agriculturalists and Economic Stability 353(1)

Economic Justice 353(1)

Ways to Attain Economic Justice 353(1)

Progressive Income Tax 353(1)

Economic Security 353(1)

Economic Freedom 354(1)

Production Agriculturalists and Economic Freedom 354(1)

Types of Economic Analysis 355(4)

Marginal Analysis 355(1)

Marginal Benefit 355(1)

Marginal Cost 355(1)

Economic Decisions 355(1)

Ceteris Paribus (``All Else Held Constant'') 355(1)

Determining the Cause of an Increase in Sales 355(1)

Production Possibilities 355(1)

Opportunity Cost 356(1)

Law of Increasing Cost 356(1)

Equal Product Curve 357(1)

Productive Power of Advanced Technology and Innovations 357(1)

Common Pitfalls in Economic Analysis 358(1)

Fallacy of Composition 358(1)

False-Cause Fallacy 358(1)

Career Options: Ag Banker, Financial Manager, Agriscience Loan Officer, Financial Analyst, Marketing Specialist 359(1)

Attaining Economic Efficiency 359(1)

Conclusion 360(1)

Summary 360(1)

End of Chapter Activities 361(1)

Review Questions 361(1)

Fill in the Blank 362(1)

Matching 362(1)

Activities 363(1)

Agricultural Policy and Governmental Agribusiness Services 364(35)

Introduction 365(1)

Historical Perspective 365(1)

Why Agricultural Policy? 366(1)

Goals of Present and Future Agricultural Policy 366(1)

Forces That Cause Policy Change 366(2)

Instability 367(1)

Globalization 367(1)

Technology 367(1)

Food Safety 367(1)

Environment 367(1)

Industrialization of Agriculture 367(1)

Politics 367(1)

Unforeseen Events 367(1)

Conditions Leading to and Reasons for Governmental Involvement 368(1)

Price and Income Stability 368(1)

Importance of the Food Supply 368(1)

Importance of Food Safety 368(1)

Poverty (Economic Justice) 368(1)

Environmental Externalities 368(1)

Other Public Concerns and Expectations 368(1)

Development of Agricutural Policies 369(1)

Influence of Groups and Farm Organizations on Agricultural Policy Development 369(2)

History of Farm Legislation 371(1)

Settlement Period (1776--1929) 371(1)

Official Farm Legislation Passed by Congress 371(1)

Future of Agricultural Policy 371(6)

Reasons for Governmental Services 377(1)

Production 377(1)

Education 377(1)

Services 378(1)

Organizational Structure of the USDA 378(1)

Food, Nutrition, and Consumer Services 379(1)

Food and Nutrition Service 379(1)

Marketing and Regulatory Programs 380(1)

The Agricultural Marketing Service 380(1)

Animal and Plant Health and Inspection Service 380(1)

Grain Inspection, Packers, and Stockyards Administration 380(1)

Farm and Foreign Agricultural Services 380(2)

Farm Service Agency 381(1)

History 381(1)

Responsibilities 381(1)

Size 381(1)

Commodity Credit Corporation 381(1)

Foreign Agricultural Service 382(1)

Risk Management Agency 382(1)

Rural Development 382(1)

Rural Utilities Service 383(1)

Rural Housing Service 383(1)

Rural Business-Cooperative Service 383(1)

Natural Resources and Environment 383(1)

Forest Service 383(1)

Natural Resources Conservation Service 384(1)

Jobs 384(1)

Research, Education, and Economics 384(3)

Agricultural Research Service 385(1)

Animal and Plant Research 385(1)

Marketing Research 385(1)

National Agricultural Library 385(1)

Cooperative State Research, Education, and Extension Service 385(1)

The Cooperative State Research Service 385(1)

Extension Service 385(1)

4-H Clubs 386(1)

Economic Research Service 386(1)

National Agricultural Statistics Service 386(1)

Food Safety and Inspection Service 387(1)

USDA Summary 387(1)

State Departments of Agriculture 387(1)

Mission 387(1)

National Association of State Departments of Agriculture 387(1)

Land Grant System 388(2)

History of Land Grant Systems 388(1)

Colleges of 1890 388(1)

Agricultural Experiment Stations 388(1)

Development of the Cooperative Extension Service 388(2)

Non-Land Grant Agricultural Programs 390(1)

Comparison of Land Grant and Non-Land Grant Universities 390(1)

Sea Grant Program 390(1)

Historical Development 390(1)

Mission 390(1)

Reason for the Sea Grant Name 390(1)

Funding 390(1)

Project Awards 391(1)

Coherent Project Programs 391(1)

Sea Grant Institutional Programs 391(1)

Sea Grant Colleges 391(1)

International Mission of the Sea Grant Programs 391(1)

Agricultural Education 391(2)

Future Farmers of America 392(1)

Size 392(1)

Career Options: Natural Resources Conservation Service, Air Quality Control, Federal and State Regulatory Agencies, Agricultural Extension and/or 4-H Leader, Agricultural Education Teacher 393(1)

Jobs in Agricultural Education 393(1)

Conclusion 393(1)

Summary 394(1)

End of Chapter Activities 395(1)

Review Questions 395(1)

Fill in the Blank 396(1)

Matching 397(1)

Activities 398(1)

Private Agribusiness Services 399(32)

Introduction 400(1)

Resource Specialization 400(1)

Private Agribusiness Services 400(1)

General Farm Organizations 400(3)

The National Grange 400(1)

Accomplishments 401(1)

Membership 401(1)

National Farmers Union 401(1)

Intended Purposes 401(1)

American Farm Bureau Federation 402(1)

Insurance 402(1)

Marketing 402(1)

Accomplishments 402(1)

National Farmers Organization 402(1)

Strategy to Improve Farm Prices 402(1)

Holding Actions 403(1)

Price Improvement Challenge 403(1)

American Agriculture Movement 403(1)

Agricultural Commodity Organizations 403(2)

Services Performed 404(1)

Selected Types of Commodity Groups 404(1)

Farm Commodity Groups 404(1)

Agribusiness Commodity Groups 405(1)

Agricultural Research 405(1)

Areas of Agricultural Research 405(1)

Consulting 405(2)

Crop Consulting 405(1)

Livestock Consulting 405(2)

Artificial Insemination 407(2)

Historical Developments 407(1)

The Artificial Insemination Industry 407(2)

Artificial-Breeding Companies 409(1)

Veterinary Services 409(6)

Father of Veterinary Medicine 409(5)

First Veterinary Schools 414(1)

First College of Veterinary Medicine 414(1)

Present-Day Veterinarians 414(1)

Agricultural Communications 415(1)

Agricultural Cooperatives 415(2)

History and Development of Cooperatives 415(1)

First Agricultural Cooperative 415(1)

Forerunner of Modern-Day Cooperatives 415(1)

Present-Day Cooperatives 416(1)

Impact of Cooperatives 416(1)

Career Options: Breed Association Representative, Artificial Insemination Technician, Veterinarian, Animal Health Technician, Agricultural Communications 417(3)

Types of Cooperatives 418(2)

Careers 420(1)

Farm Credit System 420(2)

Historical Beginning of Federal Land Banks 420(1)

Historical Beginning of Production Credit Associations 421(1)

Historical Beginning of the Bank for Cooperatives 421(1)

Restructured and Present-Day Farm Credit Systems 421(1)

Agricultural Credit Act of 1987 422(1)

Types of Farm Credit Service Loans 422(1)

Banks for Cooperatives 422(1)

Consolidated Farm Service Agency 422(1)

Historical Beginning 422(1)

Purpose 423(1)

Change from FmHA to FSA 423(1)

Nonfarm Portion of FmHA 423(1)

Commercial Banks 423(1)

Organization of Commercial Banks 424(1)

Agricultural Loans 424(1)

Life Insurance 424(1)

Size of Loans 424(1)

Source of Funds 424(1)

Commodity Credit Corporation 424(1)

Nonrecourse Loans 425(1)

Limitations 425(1)

Individual and Other Loans 425(1)

Merchants 425(1)

Farm Implement Dealers 425(1)

Career Opportunities in Agribusiness Input Credit Services 425(1)

Experience 425(1)

Education 426(1)

Potential Available Jobs 426(1)

Conclusion 426(1)

Summary 426(1)

End of Chapter Activities 427(1)

Review Questions 427(2)

Fill in the Blank 429(1)

Matching 429(1)

Activities 430(1)

Unit 4 The Agribusiness Output (Marketing) Sector 431(104)

Basic Principles of Agrimarketing 433(25)

Introduction 434(1)

What Is Agrimarketing? 434(2)

The Difference between Selling and Marketing 435(1)

Selling 435(1)

Marketing 435(1)

How Agrimarketing Developed 436(1)

Supply and Demand 436(1)

Prerequisites of an Efficient Economic System 437(1)

A Free Market Economy 437(1)

Prices That Reflect the Full Value of Market Resources 437(1)

More Interaction between Consumers and Production Agriculturalists 437(1)

Factors to Consider in a Consumer-Driven Market 437(1)

Meeting Modern Demands 438(1)

Predicting Consumer Demands Is Big Business 438(1)

The Consumer Population 438(1)

Farm Commodity Marketing 438(5)

Marketing Strategies for Farm Commodities 439(1)

Types of Livestock and Dairy Markets 439(1)

Terminal Markets 439(1)

Auction Markets 439(1)

Direct Sales 440(1)

Cooperatives 440(1)

Government 440(1)

Vertical Integration 440(1)

Futures Markets 440(1)

Types of Grain Markets 441(1)

Forward Contracting 441(1)

Harvest Pricing 441(1)

Postharvest Pricing 441(1)

Types of Fruit and Vegetable Markets 442(1)

Roadside Markets 442(1)

Farmer's Markets 442(1)

Pick Your Own 442(1)

Food Brokers 443(1)

Wholesalers 443(1)

Processors 443(1)

Specialty Markets 443(1)

Fee Fishing 443(1)

Organically Grown Crops 443(1)

Hormone-Free Beef 443(1)

On-Farm Restaurants 443(1)

Wineries 443(1)

Marketing Agribusiness Products 443(1)

Advertising 443(1)

Career Option: Salesperson/Agrimarketing Specialist 444(3)

What Is Advertising and What Will It Accomplish? 444(1)

Setting Advertising Goals 444(1)

Advertising Budgets 445(1)

Types of Advertising 445(1)

Price Promotions 445(1)

Merchandising Promotions 445(1)

Public Relations Activities 445(1)

Coordination 445(1)

The Four Ps of Agribusiness Marketing and the Marketing Mix 445(1)

Functions of Marketing 446(1)

Buying and Selling 446(1)

Transporting and Storing 446(1)

Providing the Right Quality and Quantity 446(1)

Financing 447(1)

Risk Taking 447(1)

Gathering Marketing Information 447(1)

Other Marketing Functions 447(1)

Value Adding 447(1)

Value Adding Can Occur at Any Point During Marketing 447(1)

Packaging 447(1)

Commodity Research and Promotion Boards 447(3)

Check-Off Program 448(1)

New Product Development by Commodity Boards 448(1)

Potato Board 448(1)

Cattlemen's Beef Promotion and Research Board 448(1)

National Honey Board 448(1)

Cotton Board 448(1)

American Egg Board 449(1)

National Pork Board 449(1)

National Dairy Promotion and Research Board 449(1)

Market Analysis 450(1)

Strategic Planning and Marketing 450(2)

Plan for Success 450(1)

Success Strategies 450(1)

Characteristics of Strategic Planning 451(1)

The Purpose of Strategic Planning 451(1)

Financial Reasons for Strategic Planning 451(1)

Steps of the Strategic Planning Process 452(1)

Developing the Strategic Marketing Plan 452(1)

Analysis of the Agribusiness's Situation 452(1)

Objectives of the Agribusiness 452(1)

Strategy Statements 452(1)

Procedures for Monitoring and Controlling the Strategic Plan 452(1)

Conclusion 452(1)

Summary 453(1)

End of Chapter Activities 454(1)

Review Questions 454(1)

Fill in the Blank 455(1)

Matching 456(1)

Activities 456(2)

Commodity (Futures) Marketing 458(31)

Introduction 459(1)

History of Commodity (Futures) Markets 459(1)

No Early Standards 459(1)

Formation of the Chicago Board of Trade 459(1)

Forward Contracts Increase in Popularity 459(1)

Change from Forward Contracts to Futures Contracts 460(1)

Standardized Agreements in Futures Contracts 460(1)

Initiation of the Margining System 460(1)

Commodity (Futures) Exchanges 460(1)

Exchanges Do Not Trade Anything Physical 460(1)

Other Commodities Are Also Traded 461(1)

Purpose of Commodity (Futures) Markets 461(1)

Buying Futures Contracts 461(4)

What Does a Futures Contract Look Like? 462(1)

Practice Reading a Price Quote 463(1)

Determining the Value of a Futures Contract 463(2)

Determining Profit or Loss on a Futures Contract 465(1)

Hedgers and Speculators 465(4)

Long (Buying) and Short (Selling) Hedgers 466(1)

Example of a Long Hedge 466(1)

Example of a Short Hedge 466(1)

Transactions Can Be Unpredictable 467(1)

Relationships between the Cash and Futures Market 467(1)

Basis 467(1)

Fertilizer Futures Now Traded 467(1)

Fertilizer Futures Contract Example 468(1)

Speculators 468(1)

Gambler or Businessperson 468(1)

Speculators Are a Positive Influence in the Futures Market 468(1)

Speculators Are Not Interested in the Physical Commodity 468(1)

Trading Philosophy of Speculators 469(1)

Types of Speculators 469(1)

Speculation Example 469(1)

Determining the Price of a Commodity 469(1)

Price Discovery Trading on the Trading Floor 470(1)

Forecasting Market Direction through Government Reports 470(1)

Making the Futures Trading Transaction 470(3)

Opening an Account 470(1)

Types of Accounts 471(1)

Margins 471(1)

Placing Orders 471(1)

Market Order 472(1)

Limit Order 472(1)

Stop Order 472(1)

Order Route 472(1)

Action on the Trading Floor 472(1)

Futures Options 473(2)

Career Option: Commodity Trader/Broker 475(4)

Calls (Purchases) and Puts (Sells) 475(1)

Premium Cost 475(1)

The Most You Can Lose Is the Premium 476(1)

Intrinsic Value 477(1)

Time Value 477(1)

Relationship between the Underlying Futures Price and the Option Strike Price 477(1)

Time Remaining until Option Expiration 477(1)

Market Volatility 478(1)

Interest Rates 478(1)

Using Futures Options to Benefit Agribusiness 478(1)

Ways to Exit a Futures Option Position 478(1)

Exercise 478(1)

Offsetting 478(1)

Expiration 478(1)

Regulation within the Commodity (Futures) Exchanges 479(2)

Is Your Money Safe? 479(1)

Protecting the Marketplace 480(1)

Protecting Investors in U.S. Markets 480(1)

Conclusion 481(1)

Summary 481(1)

End of Chapter Activities 482(1)

Review Questions 482(1)

Fill in the Blank 482(1)

Matching 483(1)

Activities 483(6)

International Agriculture Marketing 489(22)

Introduction 490(1)

Importance of Trade 490(2)

Economic Benefits 490(1)

Quality of Life 490(1)

Jobs 490(1)

Impact on States 491(1)

Consumer Benefit from International Trade 491(1)

Basis for Trade 492(1)

Absolute Advantage 492(1)

Comparative Advantage 492(1)

Importance of Specialization 493(1)

Exporting Agricultural Products 493(2)

Major Commodities Exported 493(1)

Major Buyers of U.S. Exports 493(1)

Humanitarian Reasons for Exporting 494(1)

Beneficial Side Effects of Exporting 495(1)

Importing Agricultural Products 495(1)

Agricultural Trade Balance 495(1)

Free Trade or Protectionism 496(3)

Agricultural Trade Policy 497(1)

General Economic Arguments for Free Trade 497(1)

General Economic Arguments Supporting Protectionism 498(1)

Infant Industry 498(1)

Balance of Payments Argument 498(1)

Unfair Competition Argument 498(1)

Self-Sufficiency for National Security 498(1)

Diversification for Stability 498(1)

Protection of Wages and the Standard of Living 498(1)

Which Is Best? 498(1)

Export and Import Trade Barriers 499(1)

Import Controls 499(1)

Export Controls 499(1)

International and Regional Trade Agreements 499(5)

International Approach to Trade Agreements 500(1)

World Trade Organization 500(1)

Mission 500(1)

Major Thrust 501(1)

Benefits 501(1)

The World Bank 501(1)

International Monetary Fund 501(1)

Purpose 502(1)

Regional Approach to Trade Agreements 502(1)

The European Union 502(1)

North American Free Trade Agreement 503(1)

Benefits to U.S. Agriculture 503(1)

Disputes 503(1)

Impact of Exchange Rates on International Trade 504(1)

It All Evens Out 504(1)

Careers Related to International Agriculture 504(1)

Export-Import Services 504(1)

Career Option: International Agriculture Trader/Marketer 505(1)

Foreign Agricultural Services 505(1)

International Agricultural Research 506(1)

The Peace Corps 506(1)

Conclusion 506(1)

Summary 507(1)

End of Chapter Activities 508(1)

Review Questions 508(1)

Fill in the Blank 508(1)

Matching 509(1)

Activities 510(1)

Agrimarketing Channels 511(24)

Introduction 512(1)

Historical Evolution of Agrimarketing Channels 512(3)

Evolution of Specialists 512(1)

The Farmer's Share of the Consumer's Dollar Falls 512(2)

Both Producer and Consumer Gain 514(1)

Assemblers of Agricultural Products 514(1)

Agricultural Commodity Processors and Food Manufacturers 515(2)

Technology in Commodity Processing and Food Manufacturing 515(1)

Size, Volume, and Structure 515(1)

Size 515(1)

Volume 515(1)

Structure 515(1)

Competition 515(1)

Processors 515(1)

Food Manufacturers 516(1)

Agribusiness Wholesaling 517(1)

Size and Volume of Sales 517(1)

Trend toward Wholesale-Retail Affiliation 517(1)

Reasons Why Wholesalers Exist 517(1)

Credit 517(1)

Savings 517(1)

Variety 517(1)

Types of Wholesalers 518(1)

Merchant Wholesalers 518(1)

Manufacturers' Sales Branches 518(1)

Agents and Brokers 518(1)

Agribusiness Retailing 518(2)

Chain Stores 519(1)

Types of Grocery Stores 519(1)

Supermarkets 519(1)

Convenience Stores 520(1)

Superettes 520(1)

Specialized Food Stores 520(1)

Other Agribusiness Retailing 520(1)

Food Service Industry 520(3)

Growth and Volume of the Food Service Industry 520(2)

Percentage of Selected Foods Consumed in the Food Service Industry 522(1)

Reasons for Growth in the Food Service Industry 522(1)

Types of Food Service Establishments 522(1)

Commercial 522(1)

Noncommercial Establishments 523(1)

Taste Trends and New Operating Styles 523(1)

Future of the Food Service Industry 523(1)

Related and Contributory Services 523(2)

Standardization and Grading 523(1)

Packaging 524(1)

Storage 524(1)

Order Processing 524(1)

Inventory Control 524(1)

Transportation 524(1)

Truck Transportation 524(1)

Railroads 524(1)

Boat Transport 524(1)

Air Transport 524(1)

Market Communications 524(1)

Financing 525(1)

Product Development 525(1)

Market Research 525(1)

Merchandising 525(1)

Advertising 525(1)

Regulation 525(1)

Careers in Agrimarketing 525(3)

Meat and Livestock Industry 525(2)

Feed Industry 527(1)

Fruits and Vegetables 527(1)

Ornamental Horticulture 527(1)

Cotton Industry 527(1)

Dairy Industry 527(1)

Career Options: Inspector, Quality Controller, Seller, Processor, Trucker, Wholesaler, Distributor, Produce Manager, Meat Cutter, Packer, Grader, Auctioneer, Co-op Manager 528(1)

Conclusion 529(1)

Summary 529(2)

End of Chapter Activities 531(1)

Review Questions 531(1)

Fill in the Blank 532(1)

Matching 533(1)

Activities 533(2)
Appendix 535(2)
Glossary 537(20)
Index 557