Chapter 2-3 - Food Markets.ppt

8/16/2019 Chapter 2-3 - Food Markets.ppt

1/34

AGRICULTURAL AND FOOD

MARKETS, PRODUCTION, AND

MARKETING Market functions,

institutions, and

behaviors Food marketing

issues

Characteristics of

markets Trends in

agricultural markets


2/34

AGRICULTURAL

PRODUCTS

FOOD ENERGYPAPERTEXTILE

FINAL FEEDINGINGREDIENT PACKAGING TEXT


3/34

Functions in Agricultural

Markets—one way to analyze Selling

Storage

Transortation !rocessing

Facilitating

Standardization

Financing "isk bearing

Market

#ntelligence


4/34

Selling to !rocessors

For $nal roducts %e&g&, 'our(

For manufacturing of ingredients #ntermediaries

)holesalers "etailers

Customers Consumers #nstitutions


5/34

Storage Storage

Seasonal

Timing ofroduction vs& costof storage

Feasibility of timingmarket

*ueuing %lining(


6/34

Transortation Cost vs& seed

!erish %e+ire( ability

alue of freshness tocustomers

Ability to redict

demand


7/34

!rocessing Treatment of

roduct %e&g&,

wheat to 'our( Creation of labor

saving foodroducts %e&g&,

frozen izza(


8/34

Facilitating Farmers- agents

Matching demand and suly

.ther information search—e&g&,demand forecast

/egotiations

0ogistics handling


9/34

Standardization Agricultural

grades and

labeling Food branding


10/34

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


11/34

"isk 3earing Futures contracts

#nvestments in

new food roducts%most will fail(

1valuation ofcredit worthinessof farmers andother arties


12/34

Market #ntelligence Market research

Forecasting 4emand

For e+istingroducts

Sread of newroducts

Suly


13/34

#nstitutions Marketing middle eole

Merchant "etailer )holesaler

Agent 3rokers Commission !rocessors5manufacturers Facilitative organizations


14/34

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


15/34

Agricultural !roduction

and !roductivity Total roduction

continue to increase,!roductivity is

increasing%outut5inut(, weare using almost thesame level of inutsif not less


16/34

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


17/34

Agricultural !roductionand Marketing

Structure of :&S&agriculture 4ominated by small,

family farms


18/34


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


19/34


!roductcharacteristics "aw material


20/34


!roductcharacteristics *uality variation


21/34


!roductcharacteristics 3ulkiness %size( and

erishability


22/34

!roduction characteristics

Total roduct #ncrease due to

roductivity


23/34


Total roduct #ncrease due to roductivity

Annual variability Seasonality

9eograhic concentration

arying roduction costs Farm suly industry %derived demand(


24/34


Annual variability


25/34


Seasonality


26/34


9eograhicconcentration


27/34


aryingroduction costs


28/34


Farm sulyindustry %derived

demand(


29/34

Marketing !roblems

0ack of control over .wn outut

Market suly


30/34

Marketing !roblems

0ag %oor( in resultsof ad;ustment e7orts


31/34

Marketing !roblems

4ecision of whetherto engage inmarketing e7orts Free rider roblem


32/34

Marketing !roblems

Suerior bargainingower of largebuyers


33/34

Marketing !roblems

Cost s2ueeze %gri(


34/34

Some Trends

4i7erentiated roducts

Secialty5nice roducts

#nterdeendence of

manufacturers andsuliers

Documents

Chapter 2-3 - Food Markets.ppt