Chapter One

Explain agribusiness Describe the big picture of agribusiness

Explain daily effects of agribusiness

Discuss farming and agriculture before agribusiness Discuss beginning of American agribusinesses

 Describe historical development of farm machinery

and equipment
Describe Steam Era Discuss historical development of internal combustion

engine
Discuss historical development of farm tractors

 An industry engaged in:

the producing operations of a farm the manufacture and distribution of farm equipment

and supplies
the processing, storage, and distribution of

farm commodities

 Can be narrowly interpreted Not just large businesses within agriculture industry John Davis and Ray Goldberg define it as:
all operations involved in the manufacture

and distribution of farm supplies production operations on the farm storage, processing, and distribution of the resulting commodities and items

 Primary production of raw materials Tertiary transformation of commodities

into value
Supply of inputs to primary and tertiary sectors
Wholesale and retail provision Provision of educational, financial, and technical services

to all sectors

 Includes all activities from the paddock to the

consumer
Production Processing Retail Distribution

Provides Americans with the highest-quality, lowest-

cost food supply in the world

 Farming is production agriculture Definitely a business! Farmers manage: interest taxes repair / replacement of equipment fertilizers wages fuel electricity
Farmers must be effective managers to succeed

 Study of economic forces that affect the food and fiber

industry

Refers to monetary and physical factors that affect the

profitability of an agribusiness

Specific areas of study in ag economics are:

Community and rural development Food safety and nutrition International trade Natural resource and environmental economics Production Economics Risk and Uncertainty Consumer behavior and household economics

 Agribusiness companies provide input supplies to the

production agriculturalist (farmer)

The production agriculturalist produces food and fiber

(cotton, wool, etc.)

Output is processed, marketed, and distributed by

agribusiness companies

 Tennessee Co-op provides various input supplies to

farmers (feed, fence, etc.)

Production agriculturalists use these items to produce

food and fiber products

Tractor Supply Company markets and sells these

products to the public

 Agribusiness Manufacturers furnish production agriculturalists with the supplies and equipment needed to produce, store and transport their crops Government Agencies inspect and grade agricultural products for quality and safety
Trade and Commodity Organizations educate, promote, advertise, coordinate, and lobby for their agricultural products

 Millions of people are employed in agribusiness

throughout the world

People across the globe also depend on agribusiness

for their food, clothing, and shelter

Figure 1-3 (page 7)

 What is involved in assembling a cheeseburger? Figure 1-4 (page 8)

Agribusiness is essential to our

daily lives
Agribusiness is crucial to the economy

 People have searched for ways to feed themselves since

prehistoric time
If people did not eat one day,

they would hardly have enough energy to find food the next day
Nearly all their waking time was spent searching for

food by hunting or gathering nuts and other naturally grown foods

 3000 B.C. Wooden implements were made sharper and more durable

by using metal Allowed people to cultivate larger areas of land faster Caused agriculture to spread throughout the world and become a way of life
Bronze Age developments:

Bronze tools and plows Nile River used to irrigate crops Wheel was discovered Population rose from 3 million to nearly 100 million people

 1000 B.C.

Use of iron allowed for massive crop production

Trade among people resulted from the surplus of

goods
Iron Age developments:
Iron hand tools and plows Development of money Leaving land fallow became a

common practice

 A.D. 400-1500

Fall of the Roman Empire slowed the growth of

agriculture
Middle Age Developments:

Crop rotation New harness for plowing Selective breeding of livestock Fences

American agriculture now began to develop because

Columbus discovered the New World

 Developments during this time led to the way we farm

today
Practice of putting dead fish into the ground along with corn

seed led to the development of organic fertilizer

Rice, was first grown in the United States George Washington created one of the first experimental

farms
Thomas Jefferson experimented with seeds and livestock,

invented farm implements, and was active in establishing a local agricultural society

 More people moved to US

People went west and developed new ways to produce food New developments included:
Surveying of land
Invention of cotton gin by Eli Whitney

in 1793 Discovery of vaccines by Edward Jenner Invention of first one-piece, cast-iron plow in 1819 by Jethro Wood Interchangeable parts for equipment

 1840s and 1850s

Spurred the growth of production agriculture and

agribusiness Movement from farms to factories in cities Shift from animal power to man power To produce ONE acre of wheat
56 hours of manpower before 1830 Less than 2 hours today

 Steam engine

Railroads
Sewing machine Powered loom for weaving Automobile by Henry Ford Crop rotation promoted by Charles Townsend Livestock breeding advances by Robert Bakewell Seed drill by Jethro Tull

 Mechanical reaper by Cyrus McCormick

Stationary grain threshing machine

Better one-piece steel plow by John Deere

Barbed wire
Gasoline-powered tractor in 1892

Seed and plant genetic development by Gregor Mendel

 Farming had become most important industry Many improvements for American farmers:
New machines Better transportation Marketing Options High farm prices

Farming research

 Bureau of Forestry established by U.S. government Vaccine developed for hog cholera Panama Canal opened for shipping Cooperative Extension Service created Federal Land Banks were established to give farmers credit Hybrid plant seed developed Smith-Hughes Act established vocational agriculture in high

schools
Development of new products by agricultural scientists such as

George Washington Carver

 Farmers could not sell as much overseas

Farm prices dropped

Many farmers went bankrupt Dust Bowl devastated mid-western farms Entire country lost money Stock market crashed in 1929 Great Depression resulted

 Soil Conservation Service (SCS) established in 1935 to prevent

catastrophes like the Dust Bowl

FFA (Future Farmers of America) began in 1928 Higher crop yields due to better management practices Better agricultural research and education conducted Antibiotics used to treat animals DHIA (Dairy Herd Improvement Association) organized to

monitor dairy herds

 Great Depression ended Farm prices increased Advanced farming methods established: Artificial insemination Electric fences Disc plows Chemical fertilizers and pesticides Futures trading Computers Gene splicing Cloning Gene mapping

 Farm machinery dealerships

Commodity (futures) brokers

Artificial breeding services Research consulting firms

Agricultural chemical companies

Veterinary supply companies Livestock supply companies

Animal feed companies

Biotechnology firms Export companies

 Cotton gin (1784) Cast iron plow (1787) Cotton planter (1825) Corn planter (1828) Steel plow (1837) Tractor (1892)

 1850 294 million acres used for farming 1880 536 million acres used for farming 1800 90% of population lived on farms 1900 50% of population lived on farms Farmers became self-sufficient Farmers increased productivity and profit Used additional earnings to purchase equipment Made transition from manpower to horsepower

 1850-1900 Over 70,000 steam engines

produced
Provided alternate mobile source

of power

 Various fuels used in early engines:

Gun powder Turpentine Coal Dust Kerosene

Early tractors called gasoline tractors, BUT their

major source of fuel was kerosene Tractors had one tank for gasoline and one for kerosene Farmers started with gasoline and switched to kerosene because it was more efficient

 1899 more than 100 firms making engines

1911 more than 500 companies in operation

Engines continued to be a popular source of power

through the 1940s Many small engines being restored by private collectors

 First gas-powered tractor built in 1892 by John Froelich Forerunner of the Waterloo Boy Modern John Deere line of tractors Originally called gasoline traction engines Term tractor first coined in 1906 by a salesman for the

Hart-Parr Tractor Company

 World War I Effects:

1910 15 companies sold 4,000 tractors
1920 166 companies sold 200,000 tractors

Great Depression Effects:

1921 - 186 companies sold only 68,000 tractors 1925 58 companies survived

After the Depression:

20 companies sold more than 1 million tractors 90% of sales came from 9 companies

International Harvester John Deere J.I. Case Massey-Harris Oliver Minneapolis Moline Allis Chalmers Cleveland Tractor Company Caterpillar Tractor Company

 PTO (Power Take-Off Unit)

1918 International Harvester Allowed operator to control mounted and drawn

equipment with the engine of the tractor

Pneumatic Rubber Tired Tractor
1932 Allis Chalmers Completed basic design of a light versatile tractor that

could handle most farm jobs

These advancements finalized the transition from horses

and mules to tractors with internal combustion engines

 Decreased demand for animal feed a large portion of the land that had been used to produce animal feed was shifted to the production of food Reduced labor time and cost Producing 100 acres of corn:
141 days with animal power

51 days with tractor power

 Caterpillar Tractor Company 1931 developed a diesel-powered, crawler-type farm tractor diesel engine had a major impact

Minneapolis Moline Company

1941 Liquefied Petroleum (LP) gas tractors made it possible for farmers to use clean-burning, low-

cost butane and propane for fuels

 Hydraulic lifts Torque amplification Hydrostatic transmission Power steering Turbochargers Heated and air-conditioned cabs One farmer today can do the work of 1,000 workers without

machine power No wonder one farmer feeds more than 131 people!

 Shift to diesel as major fuel

More than 80% of tractors now use diesel

Increase in horsepower
Most tractors have hp rating of 200 or more

Shift to 4-wheel drive power

Ability to use more power efficiently Better traction and flotation with less soil compaction Increased safety Standard on large tractor models Optional on medium and small models

 One farmer provides for 150 people Americans only spend 9% of income on food 1500 pounds of food supplied for each US citizen

Numerous exports produced as well

Promotes world peace and security Restrictions from government on exports Could todays farmers meet the worlds need for food,

clothing, and shelter if restrictions were lifted?