1. Chapter 1 Farm Management in the Twenty-First Century

2. Chapter Outline Structure of Farms and Ranches The Information Age
Financial Management
Human Resources
Producing to Meet Consumer Demands
Environmental and Health Concerns
New Technology
farm management chapter 1

3. Chapter Objectives
To discuss how changes in the structure and technology of agriculture will affect the next generation of farm and ranch managers
To identify the skills that future farm and ranch managers will need to respond to these changes
farm management chapter 1

4. Structure of Farms and Ranches
Number of farms in US decreasing
Average farm size increasing
farm management chapter 1

5. Figure 1-1 Number of farms in the United States
farm management chapter 1

6. Figure 1-2 Total sales per farm in 1997 dollars
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7. Changes in Structure Caused by:
Labor-saving technology
Greater off-farm employment opportunities
Desire of farm operators for higher income
High fixed costs of some technology
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8. Four General Business Strategies
Low Volume, High Value Producers
High Volume, Low Margin Producers
Specialty Product and Service Providers
Part-Time Operators
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9. Figure 1-3 Alternative paths for farm and ranch businesses
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10. Table 1-1 Distribution of Farm Sales
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11. The Information Age Improvements in data collection Very specific data
Automatic recording
Personal computers
A new problem of “too much” information?
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12. Financial Management Need for more outside capital
Urban and rural financial markets will move closer together
Increased need for documentation
Need for standard accounting practices
Increase in renting/leasing assets
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13. Human Resources Human resource management increasingly important
Farm businesses will need to be competitive with off-farm employment
Increased use of consultants and paid advisors
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14. Producing to Meet Consumer Demands
Buyers beginning to implement stricter product standards
Producers who can provide high-quality, uniform standard product will receive premium price
Niche markets will also gain in importance
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15. Environmental and Health Concerns
Concerns about food safety and environmental preservation
Education and regulation will be used to increase safety and preserve resources
Environmental audits becoming routine in farm sales
Each decision must be evaluated for its effect on the environment as well as profit
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16. New Technology
Agricultural technology has been evolving for decades and will continue to do so
Biotechnology offers possible gains in production efficiency
Global positioning systems (GPS) can pinpoint exact location of equipment in field
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17. Summary
Farmers and ranchers of the future will be making the same basic decisions that they have made in the past. But they will make them faster and with more accurate information. Farm businesses will continue to grow larger, and their operators will need specialized skills in managing personnel, interpreting data, acquiring resources, and customizing products to meet consumer demand.
farm management chapter 1