Unit 4: Agribusiness Systems

Objectives 4.1 Define terminology 4.2 Identify Careers in the Agribusiness systems pathway. (quality assurance specialist, quality control supervisor, research economist) 4.3 Distinguish between the four types of Agricultural businesses. (sole proprietorship, partnership, cooperative and corporation) 4.4 Distinguish between areas of the Agriculture Industry. (production, processing, marketing, distribution and sales)

Objectives 4.5 Distinguish between common depreciable and non-depreciable capital items used in agriculture. (feed, seed, fertilizer, stocker cattle, feeder cattle, breeding livestock, equipment, land, land improvement) 4.6 Identify types of loans. (short-term, capital loan, mortgage)

4.1 Define Terms 1.Acquisition cost -- the cost of acquiring property or equipment 2.Assets -- economic resources controlled by the farm or ranch business 3.Commodities -- raw materials or semi-processed goods that can be bought and/or sold for further processing 4.Depreciation -- a method of pro-rating the cost of a capital asset over its useful life 5.Expense -- any costs associated with producing a product 6.Income -- the amount of money received from selling a product or providing a service

4.1 Define Terms 7.Inventory -- a physical count of all assets in a business 8. Liability -- a financial obligation 9. Profit -- the excess of receipts over payments for all factors of production 10. Salvage value -- value of an asset at the end of its useful life 11. Useful life -- an estimated amount of time during which an asset or facility will yield income or be use

4.2 Identify Careers in the Agribusiness systems pathway.

Quality Assurance Specialist General Information:  Quality Assurance Specialists are responsible for inspecting, analyzing, and writing reports about production quality. Salary: $29,150 Annual Average (O-Net) Suggested High School/Collegiate Courses:  Agriculture, biology, math, business and computers. Specialized training and licensing

Quality Control Supervisor General Information:  Quality Control Supervisors inspect and enforce rules on matters such as health, safety, food, licensing, or finance. Salary: Unknown Educational Requirements:  2 year degree Suggested High School/Collegiate Courses:  Agriculture, biology, math, business and computers. Specialized training and licensing

Research Economist General Information:  Research Economists study the ways society distributes scarce resources, such as land, labor, raw materials and machinery, to produce goods and services. Salary: $79,770 Annual Average (US Bureau of Labor and Statistics) Educational Requirements:  4 year degree Suggested High School/Collegiate Courses:  Agriculture, economics, marketing, political science, law, math, business and compute

SOLE PROPRIETORSHIP, PARTNERSHIP, COOPERATIVE AND CORPORATION 4.3 Distinguish between the four types of Agricultural businesses.

A sole proprietor is someone who owns an unincorporated business by himself or herself.  Example: Family Farm, DNW Sole Proprietor

 In a general partnership, each of the two or more partners will have unlimited liability for the debts of the business.  The income and expense is reported on a separate return for tax purposes, but each partner then reports his or her pro-rata share of the profit or loss from the business as one line on his personal tax return. Partnership

Cooperative A Cooperative is a business organization owned and operated by a group of individuals for their mutual benefit. A cooperative may also be defined as a business owned and controlled equally by the people who use its services or by the people who work there.

A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members. Example: Tyson, Wal-Mart Corporation

PRODUCTION, PROCESSING, MARKETING, DISTRIBUTION AND SALES 4.4 Distinguish between areas of the Agriculture Industry.

Production The actual production of the raw material. Examples  Corn, Soybeans, Cotton, Cattle, Chickens, and Timber

Processing Processing is the changing of a raw material into a useful product. An economy must have a system for turning a wheat crop into bread. If the economy does not possess processing facilities, a wheat crop will not benefit most of the population.

Marketing Integrated approach to selling agricultural items. To market an item you must identifying the product, place, promotion and price of agricultural products.

Distribution and Sales Distribution is all the activities associated with the transport of an agricultural product to a place where it can be used. Much of the corn grown in Illinois would be useless if it could not be distributed elsewhere.

FEED, SEED, FERTILIZER, STOCKER CATTLE, FEEDER CATTLE, BREEDING LIVESTOCK, EQUIPMENT, LAND, LAND IMPROVEMENT 4.5 Distinguish between common depreciable and non-depreciable capital items used in agriculture.

Depreciable vs. Non-depreciable Depreciable Generally, depreciable items include buildings, manufacturing equipment, office equipment, and vehicles. Non-depreciable Land is not considered a depreciable item as it does not wear out or become obsolete.

SHORT-TERM, CAPITAL LOAN, MORTGAGE 4.6 Identify types of loans.

Types of Loans Short Term Loans- are loans over a short period of time. Less than one year. Capital Loan Mortgages are loans in which a borrower (i.e. a home buyer) posts a property as collateral in order to receive a loan from a lender (i.e. a financial institution).

Review 4.1 Define terminology 4.2 Identify Careers in the Agribusiness systems pathway. (quality assurance specialist, quality control supervisor, research economist) 4.3 Distinguish between the four types of Agricultural businesses. (sole proprietorship, partnership, cooperative and corporation) 4.4 Distinguish between areas of the Agriculture Industry. (production, processing, marketing, distribution and sales)

Review 4.5 Distinguish between common depreciable and non-depreciable capital items used in agriculture. (feed, seed, fertilizer, stocker cattle, feeder cattle, breeding livestock, equipment, land, land improvement) 4.6 Identify types of loans. (short-term, capital loan, mortgage)