Chapter 1 Farm Management in the Twenty-First Century

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

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

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

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

Figure 1-2 Total sales per farm in 1997 dollars farm management chapter 1

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 farm management chapter 1

Four General Business Strategies Low Volume, High Value Producers High Volume, Low Margin Producers Specialty Product and Service Providers Part-Time Operators farm management chapter 1

Figure 1-3 Alternative paths for farm and ranch businesses farm management chapter 1

Table 1-1 Distribution of Farm Sales farm management chapter 1

The Information Age Improvements in data collection Very specific data Automatic recording Personal computers A new problem of “too much” information? farm management chapter 1

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 farm management chapter 1

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 farm management chapter 1

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 farm management chapter 1

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 farm management chapter 1

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 farm management chapter 1

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