Value-added Agriculture Student Name: ______________

What is – Value-Added Agriculture? Adding Value:

BUT – Don’t Raw Commodities already have value?! Many raw commodities have value in their _______________ ___________________  They are raised by an agricultural producer; then sold by that producer for further processing ____________, _________, ___________, _____________, ____________ all HAVE value. They are ____________ ______________

Could producers get MORE $$$ for their products if they –

It’s important to identify value-added activities that support investment in _____________, ________________________, & ___________ Additional opportunities for adding value include:  1.  2.  3.

For ALL of the Capturing vs. Creating Value Slides (there are 10 of them)– take a few minutes and draw a quick picture in the blank boxes located next to the definitions. Make sure the picture represents the definition to YOU – the Learner!

Adding value to products can be accomplished in a number of different ways, but generally falls into one of two main types:  Creating Value Innovation Industrial Innovation  Capturing Value Coordination

Creating Value: _____________________________ ___________________________________________ Innovative new products Enhance a product’s characteristics Enhance services Create brand names Develop unique customer experiences

Creating Value through - Innovation: Improving existing processes, procedures, products and services or creating new ones  Market unique or branded products  Produce identity-preserved or specialty crops  Combine family activities or recreation associated with direct on-farm marketing

Creating Value through - Industrial Innovation: Processing traditional crops into nonfood end uses  Ethanol from corn  Biodiesel from soybeans  Particleboard from straw

Capturing Value: ________________________ _______________________________________  Meant to ‘capture’ more of the consumer dollar through:

Direct Marketing  Selling products directly to the consumer  Selling beef animals ‘on the hoof’  Selling homemade soaps & lotions to the general public  Think – eBay!

Think - Tyson Chicken: US%3Aofficial&q=Tyson+Chicken&btnG=Search+Images Vertical Integration –

Producer Alliances: Individuals / companies from the same level of the food chain consolidate in order to produce and market a superior product

Cooperative Efforts: Individuals or companies pool their products in order to increase bargaining power.

Minimizing Costs:  1.  2.  3.

Adding value often requires a _______________ __ ________________ These techniques provide producers with a _________ __________ in the marketplace There are _____ strategies for adding value

6 Key Strategies for Adding Value

Changing the physical state / form of products

Producing products in ways that enhance value

Differentiating agricultural products in order to enhance their value

Bundling Products 1. 2.

Producing and marketing commodities that improve operating efficiency up the supply chain 1.

Owning assets somewhere up the supply chain for further processing

Producers use one (or more) of these six strategies: BOTTOM LINE: ______________________________________

Producers used to have a ‘produce-then-sell’ mentality  1.  2.  3. TODAY’s Agriculture includes:  1.  2.

Agriculture is moving towards a _____ _______ The international market for value-added products is _________  Consumers have increasing _______, ________ & ________________ needs  Food processors want to improve ____________.  Technology enables producers to produce what ____________ ___________!

Producers who add value will become more than commodity producers –  1.  2.  3. They will be producing _________________ ________________: (steaks, hamburgers, bread etc.)

How much value can be added?  1.  2.  3.  4.  5.  6.  7.  8.

Adding Value to Products – The Basic “How- to List”  Gather intelligent market information on _________ & _____________________. Make sure an opportunity exists!  Start with a ________ ______________  Add a healthy dose of _________ to create a product desired by ______________  Make sure you have a valuable edge on the ____________

Adding Value to Products – The Basic “How- to List” cont.  Opportunities come in many ________ & _______.  You must do your _________! Research is required  Be _________ and _________to succeed!  You are no longer a commodity producer – you are ____________________, ______________ & _______________________ food products

Follow these basic steps:  1.  2.  3.  4.  5.  6.  7.  8.  9