Instructor: Jing Han
Office: 138 F.A. Building
Phone: 204-2905905
Email: hanj@learning.icmanitoba.ca

1. How the global agri-food system works
2. Why the agri-food system includes everyone — from input suppliers to retailers
3. Why business success depends on the profitable integration of technology
4. Why there are strong job prospects in the future for those with the right combination of technical and business skills

Product Flow in
Global Agri-Food System
Input Supplies
Food Consumer
Food Products

U.S. Agribusiness
Leading the World
• Largest Agribusiness Sector in World
• Largest Part of U.S. Economy
• One of the Best Integrators of Technology
• Biggest User of Biotechnology

U.S. Agribusiness
Leading the World
• Safest Food
• Lowest Cost Food
• Largest Assortment of Food
• 11,000+ new food products per year

The Business of Food
• We consume 350+ million tons of food each year ~ about 6 pounds/day/person
• Farmers get 19.5 cents of each food dollar
• Consumers spend 9.5% of income on food
• Each farm worker produces food for 144 people

U.S. Agribusiness
With < 7% of World’s Land and 5% of World’s Population,
We Produce: 12% Agricultural Output
• 12% Wheat
• 42% Corn
• 47% Soybeans
• 16% Cotton
• 19% Milk
• 28% Cheese
We Export: 27% of US Production

160
140
120
100
80
60
40
20
0
Farm Productivity
& People Fed/Farm Worker
41
27.2
52
46.2
72.8
58
100.4
66
122
91
135
106
1950 1960 1970 1980 1990 2000 2005
144
119
People Fed/Farm Worker Productivity of Farming Index 1996 = 100

Figure 1-4 Percent of Income Spent on Food
25
24.2
20.7
20.6
20
15
17.5
13.9
13.2
11.1
9.8
9.5
10
5
0
1930 1940 1950 1960 1970 1980 1990 2000 2004

Percent of Income Spent on Food
60
50
40
30
20
10
0
10
11
12
17 17
26
39
40
52

People Buy Food For Hierarchy of
Reasons
Status & Causes
Living Well
Promoting Health
Convenience
Tastes Good & Variety
Nutritious, Safe, and Affordable

Agribusiness Management:
• “Science remains in the laboratory unless there is incentive to adopt the knowledge. This is the difference between science and technology.
{Agribusiness Management} is the integrator.”
– Source: “The Agricultural Revolution of the 20 th Century,” by Paarlberg
& Paarlberg, pg 59.

The Agricultural Revolution of the 20 th Century - I
• “If a farmer from Old Testament times could have visited an American farm in year 1900, he would have recognized—and had the skill to use—most of the tools he saw: the hoe, the plow, the harrow the rake.
If he were to visit an American farm today, he might think he was on a different planet.”
• Source: Paarlberg and Paarlberg page xiii.

The Agricultural Revolution of the 20 th Century -- II
• “The changes that occurred in American agriculture during the 20th century exceed in magnitude all the changes that occurred during the 10,000 years since human beings first converted themselves from hunters and gathers to herdsman and cultivators.”
• Source: Paarlberg and Paarlberg, pg xiii

The
Input
Sector
The
Production
Sector
The
Processing-
Manufacturing
Sector

Hours of Farm Work
Per Acre Planted
55
60
50
Hours/Acre
40
30
20
10
0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 1998
17

Farm Numbers & Sales by Annual Sales
$500,000 and over
2.6
$250-499,999
4
$100-249,999
$50,000-99,999
10.1
9.1
9.1
11
<$50,000
0 10
15.9
20
19.1
30 40
Percent
50
44.9
% Of $ Sales
% Of Farms
60 70
74.4
80

U.S. Processed Food Imports and
U.S. Exports
40
35
30
25
20
15
10
5
0
19
89
19
91
19
93
19
95
19
97
19
99
Exports Imports
20
01
20
03

2500
2000
1500
1000
500
0
Changes in US Land Use, 1949 vs. 2002
18
87
478
760
632
587
1949 2002
Pasture & Range Forest Cropland Other Special Urban
60
297
442
651

Other
13%
Advertising
4%
Rent
5%
Labor
38%
Profits
5%
Packaging
8%
Transportation
4%
Energy
4%
Farmer's Share
19%

112 Agribusiness Firms Fortune 500
89 Beverage Companies — Coca-Cola, Pepsico
262 Food Consumer Products Companies — H J Heinz, Hershey
80 Food Production Companies — Tyson Foods, Gold Kist
109 Food Service Companies — McDonalds, Starbucks
21 Food and Drug Stores — Kroger, Safeway
322 Forest and Paper Products — Meadwestvaco
20 Tobacco Companies — Altria Group, Inc.
68 Food & Grocery Wholesalers — Sysco

• Fewer but Larger Facilities
• Fewer but Better Educated Employees
• A High Tech Business

Did you know that college of agriculture graduates have one of the highest job placement rates? Iowa State
University reports a 95 percent job placement rate for agriculture graduates. Not only are employment rates high, enrollment in agriculture colleges is up as well. At Penn
State University, enrollment is up more than 40 percent since 2004 (Krogstad, 2012).
• What do you think is driving these increases?
• What is your perception of agriculture students? How do you think society perceives agriculture?