chapter 2-3 - food markets.ppt
TRANSCRIPT
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AGRICULTURAL AND FOOD
MARKETS, PRODUCTION, AND
MARKETING Market functions,
institutions, and
behaviors Food marketing
issues
Characteristics of
markets Trends in
agricultural markets
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AGRICULTURAL
PRODUCTS
FOOD ENERGYPAPERTEXTILE
FINAL FEEDINGINGREDIENT PACKAGING TEXT
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Functions in Agricultural
Markets—one way to analyze Selling
Storage
Transortation !rocessing
Facilitating
Standardization
Financing "isk bearing
Market
#ntelligence
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Selling to !rocessors
For $nal roducts %e&g&, 'our(
For manufacturing of ingredients #ntermediaries
)holesalers "etailers
Customers Consumers #nstitutions
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Storage Storage
Seasonal
Timing ofroduction vs& costof storage
Feasibility of timingmarket
*ueuing %lining(
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Transortation Cost vs& seed
!erish %e+ire( ability
alue of freshness tocustomers
Ability to redict
demand
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!rocessing Treatment of
roduct %e&g&,
wheat to 'our( Creation of labor
saving foodroducts %e&g&,
frozen izza(
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Facilitating Farmers- agents
Matching demand and suly
.ther information search—e&g&,demand forecast
/egotiations
0ogistics handling
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Standardization Agricultural
grades and
labeling Food branding
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Financing 0ong term lending
Farm mortgages%money lending with
deosit( 12uiment loans
Short term lending Advances against
harvests Financing of store and
rocessor inventory
Futures contracts
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"isk 3earing Futures contracts
#nvestments in
new food roducts%most will fail(
1valuation ofcredit worthinessof farmers andother arties
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Market #ntelligence Market research
Forecasting 4emand
For e+istingroducts
Sread of newroducts
Suly
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#nstitutions Marketing middle eole
Merchant "etailer )holesaler
Agent 3rokers Commission !rocessors5manufacturers Facilitative organizations
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3ehavioral Systems #nut6outut
4i7erent arties rovide goods and
services moving toward $nal roducts Communications
Matching suly and demand
Adatation to outside changes—e&g&, Consumer tastes
)orld suly
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Agricultural !roduction
and !roductivity Total roduction
continue to increase,!roductivity is
increasing%outut5inut(, weare using almost thesame level of inutsif not less
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Food Marketing 18ciency 9etting $nal roducts to consumers
at lowest cost for given services
0ower sread between farm costs andretail food costs does not necessarilymean greater e8ciency—intermediate functions may add value
Tyes of e8ciency .erational !ricing
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Agricultural !roductionand Marketing
Structure of :&S&agriculture 4ominated by small,
family farms
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Agricultural !roductionand Marketing
Structure of :&S& agriculture 4ominated by small, family farms
!roduct characteristics "aw material 3ulkiness and erishability *uality variation
!roduction characteristics Total roduct Annual variability Seasonality
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Agricultural !roductionand Marketing
!roductcharacteristics "aw material
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Agricultural !roductionand Marketing
!roductcharacteristics *uality variation
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Agricultural !roductionand Marketing
!roductcharacteristics 3ulkiness %size( and
erishability
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!roduction characteristics
Total roduct #ncrease due to
roductivity
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!roduction characteristics
Total roduct #ncrease due to roductivity
Annual variability Seasonality
9eograhic concentration
arying roduction costs Farm suly industry %derived demand(
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!roduction characteristics
Annual variability
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!roduction characteristics
Seasonality
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!roduction characteristics
9eograhicconcentration
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!roduction characteristics
aryingroduction costs
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!roduction characteristics
Farm sulyindustry %derived
demand(
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Marketing !roblems
0ack of control over .wn outut
Market suly
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Marketing !roblems
0ag %oor( in resultsof ad;ustment e7orts
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Marketing !roblems
4ecision of whetherto engage inmarketing e7orts Free rider roblem
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Marketing !roblems
Suerior bargainingower of largebuyers
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Marketing !roblems
Cost s2ueeze %gri(
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Some Trends
4i7erentiated roducts
Secialty5nice roducts
#nterdeendence of
manufacturers andsuliers