Agribusiness Management-Chap 1

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Agribusiness Management
Chapter 1: Introduction
Objectives
 Understand the functions of a farm or ranch manager and
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their responsibilities.
Be familiar with the decision making process
Have an understanding of goals and objectives, including the
advantages and disadvantages of setting goals.
Identify 3 types of goals.
Exhibit an understanding of the guidelines for setting goals,
prioritizing goals and the techniques that help in reaching
goals.
Functions of the Farm or Ranch
Manager
 Planning
 Day to Day Operation (Implementation)
 Evaluation for Control of the Business
Responsibility of the Farm or Ranch
Manager
 Making all parts of the business work together while using
resources such as land, labor and capital wisely in order to
make the most profit.
Decision Making
Classifications of Decisions
 Importance
 Frequency
 Imminence
 Revocability
 Available Alternatives
Strategies for Decision Making
 Reducing the number of daily decisions
 Collecting data to compare alternatives
 Establishing priorities based on importance
Systematic Approach to Decision
Making
 Better organize the thought process
 Achieve outcomes more closely related to the goals
 Be more timely in decision making
The Steps of the Decision Making
Process
1.
2.
3.
4.
5.
6.
Define the problem
Gather information about alternative solutions
Evaluate alternative solutions
Make decisions consistent with goals and objectives
Take action and put your decision into effect
Evaluate and accept the consequences
Example Using the Steps of Systematic
Decision Making
 The Smith ranch runs a cow-calf operation and owns 8 bulls and 300 cows on
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1.
2.
3.
4.
5.
6.
average. They are concerned that the cow-to-bull ratio is too high and may
result in a smaller calf crop. Their goal is to have a calf crop percentage of 90%.
They are trying to decide how to solve the problem of having too few bulls.
Their options are to purchase one or more additional bulls or artificially
inseminate the cows.
Let’s work together and use the steps of the decision making process to solve
the Smith’s problem.
Remember the steps are:
Define the problem
Gather information about alternative solutions
Evaluate alternative solutions
Make decisions consistent with goals and objectives
Take action and put your decision into effect
Evaluate and accept the consequences
Smith Ranch Cow-to-Bull Ratio Problem
 #3 Smith Ranch—
 Problem-Concerned that they do not have enough bulls resulting in a smaller
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calf crop.
Alternative solutions- Purchase more bulls or implement an artificial
insemination program.
Evaluate alternatives-The Smith’s can purchase more bulls decreasing the cowto-bull ratio or they can begin to artificially inseminate a portion or all of the
herd. Cost, time and labor all need to be looked at when comparing the two
alternatives.
Make a decision consistent with goals- The Smith’s goal is to have a 90% calf
crop. Decide weather to purchase more bulls or begin an AI program.
Put decision into effect. The Smith’s will either purchase more bulls or they will
begin to use an AI program at breeding time.
Evaluate and accept the consequences- Did the Smith’s reach their goal of a
90% calf crop. If they did not they will have to accept that consequence.
Goals and objectives
Goals
 Broad statements that show where you want to be after some
period of time
 Examples
 To make profit every year on the farm
 To increase cash grain sales by 10% per year over five years.
Objectives
 The steps that must be taken in order to attain goals
 Examples
 To increase wheat sales by 30% next year
 To keep accurate and complete farm business and family living
records next year
Guidelines for Goal Setting
 Goals should be
 Yours
 Written
 Realistic and attainable
 Have target dates
 Compatible
Types of Goals
 Short Term Goals
 Those goals that can be achieved in less than 1 year.
 Intermediate Goals
 Goals that require 1-10 years for achievement.
 Long Term Goals
 Goals that usually require more than 10 years to accomplish
Determining the Priorities of Goals
 Dollar Value
 Time
 Orderly Sequence
Techniques in Reaching Goals
 Have regular check-ups
 Use saved time and effort wisely and effectively
 Organize efforts on a “things to do” work list
 Check for slow or nonmoving goals
 Modify goals as resources change or as the farm business and
family use resources more efficiently
Assignment
 Assignment Sheets 1-3 p. 7-10. You may skip #3 on
assignment sheet 2.
 Due Date: end of period Wednesday August 21
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