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Unit Introduction to Agribusiness Agribusiness Management CD Interest Approach What does agriculture mean to you? What have you done today that relates to agriculture? You and Agriculture… Did you eat breakfast? Are you wearing clothes that contain wool or cotton? Did the vehicle that you arrived at school in have ethanol in the fuel? Without agribusiness and its many aspects, we would have less variety when it comes to fabrics, fuels, foods, and medicine. Student Learning Objectives Define agribusiness and explain its effect on our society. Identify successes in agribusiness in America. Explain the size and importance of production agriculture. Explain the size and importance of the agribusiness sectors. Terms Agribusiness Agribusiness input sector Agribusiness output sector Agriservices sector Export Gross domestic product Import Input Output Private agriservices Production agriculture Production efficiency Public agriservices Value-added Agribusiness An agribusiness is a business that: sells items to farmers for production provides services to other agricultural businesses or is any business that is engaged in the marketing, transportation, processing, and distribution of agricultural products. Inputs and Outputs Agribusinesses process inputs into outputs. An input is a resource used in production. An output is the result of the production process. What inputs are necessary to make chocolate chip cookies? Agribusiness and Society Agribusiness provides people with food, clothing, and shelter. It also provides jobs for millions of people. Jobs in science, research, engineering, education, advertisement, government agencies, trade organizations, and commodity organizations. The History of Agribusiness Before agriculture, early man hunted and gathered for their food. Early developments included the domestication of animals and crops. As time passed, man began to use tools to cultivate, learned about crop rotations, selective breeding, and learned to use organic fertilizers. Agriculture advanced as the industrial revolution came about. Ag Related Events in the 1800’s The invention of the steel plow by John Deere The introduction of barbed wire The building of the first gasoline powered tractor Gregor Mendel began working with genetics in plants Ag Improvements in the 1900’s More money and more machines available made the following improvements possible: The formation of the U.S. Bureau of Forestry Vaccines were developed to improve animal health the Smith-Hughes Act established vocational agriculture courses in the high schools How Have We Benefited? As a result of the advancements made in agriculture over the years: The American farmer now produces enough to feed and clothe 150 people. Americans also spend the least amount of their disposable income on food, only about 10%. Exports Agribusinesses in America produce a variety of exports. Exports - commodities shipped outside of the United States. Grains, tobacco, cotton, and vegetables are examples of agricultural exports. Imports The United States also imports a variety of agricultural products. An import is an agricultural product brought into the U.S. from another country. Importance of Production Ag. Without production agriculture, agribusiness would not exist. Production agriculture refers to the use of land to produce goods. There are approximately 2.3 billion acres of land in the United States 21% of which is used for crops 25% is used for livestock production 30% is used for forestry purposes. Gross Domestic Product GDP is the value of goods and services America produces in a year. Agriculture accounts for 17% of the GDP. Of this 17%, 13% come from agricultural related industries such as feed mills and biotechnology firms. Production Efficiency Production efficiency refers to receiving optimum output from an input. The production efficiency of production agriculture in the United States as compared to other countries is enormous. Production Efficiency The most common method of measuring efficiency is to determine the number of people whom farm workers supply with products. Today, the average farm worker supplies 150 people with agricultural products. Production Efficiency In the early 1950’s, one farm worker supplied less than 20 people with agricultural products. An increase in production efficiency has helped the overall U.S. economy. Improved efficiency has allowed more people to leave the farm and find work in other industries.