Overview of the Food System AG BM 102

Source: CIAL News, August 27, 2015

New Zealand Dairy Exports (ytd) Mil US Dollars % Change WHP$4,173$2,215-47% Butter$1.411$967-31% Cheese$762$695-9% Skim MP$964$596-38% Whey Powder $342$336-2% Casein$355$333-6% Caseinates$203$202-1% Other$255$247-3% Total$8468$ %

Overview of the food system What is the food system? Location of production Location of consumption Paths to the consumer

The Food System – elements Products and services Value added Information

The Food System Information & Money

Location of production Depends on product Agriculture is increasingly specialized Individual farms specialize Regions specialize Key factors: –Where the resources are –Where the consumers are

Specialization Agriculture is specialized regionally Allows for more infrastructure –Equipment dealers –Processors Matches product w/ growing conditions Requires more transportation Allows larger-scale production

SugarcaneforSugar2010ProductionbyCountyforSelectedStates U.S.DepartmentofAgriculture,NationalAgriculturalStatisticsService Tons NotEstimated<100,000100, ,999250, ,999500, ,9991,000,000-2,999,9993,000,000 + SugarcaneforSugar2010ProductionbyCountyforSelectedStates U.S.DepartmentofAgriculture,NationalAgriculturalStatisticsService Tons NotEstimated<100,000100, ,999250, ,999500, ,9991,000,000-2,999,9993,000,000 + SugarcaneforSugar2010ProductionbyCountyforSelectedtates U.S.DepartmentofAgriculture,NationalAgriculturalStatisticsService Tons NotEstiated<100,000100, ,999250, ,999500, ,9991,000,000-2,999,9993,000,00 +

Main Cheese Producing States 2004 Million pounds 0 to to to to 2400

Main Butter Producing States 2004 Million pounds 0 to to to to to 400

Main Ice Cream Producing States 2004 Million gallons 0 to to to to to to 140

US State Populations, 2011

Types of food market basket share TypeShare Meat33.7% Fruit and Vegetables14.0% Cereal & Bakery12.6% Dairy13.6% Sugar & Sweets4.2% Fats &Oils2.7% Non-Alcoholic Beverages11.0% Other Prepared Foods8.4%

Paths to the consumer Food consumed at home and food away from home Food away from home: –33% of food consumed –46% of the money spent on food Farmer’s share of the money: –25% of food at home –16% of food away from home

Farm Share ProductShareProductShare Fruit & Veg.17%Poultry41% Meat31%Process Fruit & Veg 17% Dairy33%Fats & Oils8% Bakery & Cereal 10%All Food23%

And the share of marketing costs is rising

Concluding Comments Marketing makes the food system work Regional specialization requires lots of transportation Diverse consumer needs require services (added value) Lots of services – all have to be paid for Each product has its own story