Agribusiness

Food Marketing Agribusiness: an agricultural business that includes growing, storing, processing, and distribution. There are two types of marketing: Administered (controlled) Open Market (free choice)

1. Administered pricing Who? A marketing board determines the price for a particular crop or livestock product (ex. Canadian Wheat Board). How? The price is set through supply and demand. If the board predicts high value, they will charge more for the product. If the board predicts low value, they will charge less.

Administered pricing (cont..) What’s the deal? Good: Steady income is guaranteed. When the price changes on world markets, farmers income remains constant. The price remains what the board determines. Ex) If wheat prices drop during the year, farmers still receive a higher revenue than other countries Bad: Potential profit can be lost. If market prices increase (so that the farmers could make more money) the board takes the profit. This makes it difficult for new producers to enter farming or for old producers to expand. Canadian products marketed under administered pricing are more expensive around the world.

2. Open market pricing Who? The farmer sells their product at the best price they can find. How? Prices are set through supply and demand. However, unlike administered pricing , cost can change daily. There is no steady control.

Open market pricing (cont..) What’s the deal? Good: If prices increase the farmer can expect to make a larger profit. Anyone, can enter the market at anytime. Bad: If the price drops dramatically, the farmer will have to assume the loss of profit. If too many farmers produce the same product, there will be a greater supply than demand and the prices will drop.

Fair trade Many products we purchase on a regular basis are made by workers receiving extremely low wages or come from countries where the producers receive very little for their produce. Approximately, 50 years ago, international aid organizations together with farmers in Africa and Asia, began what is known as Fair Trade.

Fair trade (cont..) The fair trade system is designed on the following goals for the farmers and workers in developing countries: Fair compensation for their products and labour Sustainable environmental practices Improved social services Investment in local economic infrastructure

Fair trade (cont..) Fair traders pay fair prices to small producers. These prices recognize the true cost of labour and production This makes it possible for the people producing these products to keep a decent roof over their heads, feed their families, and send their children to school. Customers are encouraged to think about the person behind the product.

Impact of technology Continual improvements in technology have a huge impact on agriculture: Tractors are equipped with GPS and auto- steer technology. This makes it possible for less fuel to be used when crops are planted and sprayed – there is no overlap. Databases keep track of animal weights, milk production, vitamin and mineral deficiencies and can help farmers deliver specified feed for the various animals.

Genetically modified organisms (GMO’s) are being developed for a variety of reasons. Genetically engineering the seed means that farmers can produce a higher yield. Crops can be engineered to withstand certain herbicides, allowing the farmer to more efficiently spray for weeds. Crops can become more hardy to various climates and have an increased resistance to insects and diseases.

Farming practices Conventional/Traditional This type of farming includes tillage. Farmers are moving to minimal tillage where they till only in the fall to prepare for spring seeding. Keeping a field black for an entire growing season is not as common as it once used to be. A major concern for this type of farming practice is soil erosion especially due to wind. To address this problem, farmers plant trees along the field to create windbreaks. This reduces the amount of wind on the field and traps snow in the winter for added moisture.

Chemicals are used to allow farmers to produce crops more efficiently with a greater yield. They are also used to control pests.

Zero Tillage Farming Zero tillage means that the farmer does not till the soil at all. There are three reasons farmers choose to use this type of farming practice: Conservation of soil moisture that helps germination and yield. Erosion protection. Maintain a good seedbed quality. This farming practice does not require extra amounts of chemicals but the farmer often spends more money. The concerns with this practice are minimal in that the chemicals used are more modern and have been tested for residue and other negative side effects.

Organic Farming Organic farming uses no synthetic chemicals or fertilizers. The farmer relies on crop rotation and tillage to maintain weeds and build up organic matter. The soil may take on a physical difference after several years of organic farming. It has more organic matter in it and particles adhere more. As a result, there is less silt and erosion is minimal. Farmers also claim that the profit margin is quite good.

What do you see??

aquaculture Aquaculture is the cultivation and harvesting (farming) of finfish, shellfish and aquatic plants. Fish are bred for maximum size and rate of growth. Oysters, for example, are grown in such a way that the shell is more appealing and can be used as a dish or cup. Salmon that are grown in fish farms are fed specific types of food that will encourage quick growth.

Aquaculture (cont..) Aquaculture is one of the fastest growing industries in the world. Seafood is becoming more and more appealing. Fish can often be grown in areas with low employment rates and lower standards of living. Aquaculture provides jobs and a food source that contains a high amount of vitamins and minerals.