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Agribusiness

Agribusiness. What is agribusiness?. Sector of the industry that combines agricultural production and business decisions. Important to farmers because this is how they buy and sell their products and purchase necessary inputs and services. The Role of Consumers.

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Agribusiness

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  1. Agribusiness

  2. What is agribusiness? • Sector of the industry that combines agricultural production and business decisions. • Important to farmers because this is how they buy and sell their products and purchase necessary inputs and services.

  3. The Role of Consumers • Consumer preferences have a major impact on agricultural production because consumers dictate markets. • Supply: amount of a product available at a specific time and price. • Demand: willingness of consumers to buy something, greatly influenced by price.

  4. Agricultural Inputs & Outputs • Inputs • Feed • Seed • Machinery & Equipment • Fertilizers & Chemicals • Insurance • Credit • Animal Medications • Outputs • Crops • Market & Breeding Animals • Milk • Eggs • Timber

  5. Important Financial Concepts • Cash Flow • Income & Expenses – usually on a monthly or annual basis • Net Worth (Balance Sheet) • Assets & Liabilities • Budgets • Income & Expenses – helps with projecting future • Income Statements (Profit/Loss) • Reflects profitability of business

  6. Cash Flow Terms • Income/Receipts • Wages, gifts, government payments • Expenses • Personal: food, fuel, insurance, clothing, utilities, taxes, recreation, medical, child care, school, loan payments (mortgage, auto, etc.) • Business: seed, feed, chemicals, payroll, equipment, insurance, taxes, loan payments

  7. Balance Sheet Terms • Assets (things a person owns) • Short term: projected life of less than 1 year • Cash, checking, savings, crops for sale, market animals, accounts receivable • Intermediate term: projected life of 1-10 years • Vehicles, machinery, equipment, breeding animals • Long term: projected life of 10+ years • Real estate and improvements, houses • Liabilities (things a person owes money on) • Short term • Operating loans, credit cards, accounts payable • Intermediate term • Auto/equipment loan, loan to purchase breeding animals • Long term • Mortgage, real estate loan

  8. Financial Calculations • Net Worth: difference between total assets and total liabilities • Net Worth = Total Assets – Total Liabilities • Liquidity: ability to pay debts as they come due • Liquidity = Short term Assets – Short Term Liabilities • Solvency: ability to convert all assets to cash if needed to pay all debts at once

  9. Important Financial Terms • Interest: charge for borrowing money from a bank or individual • Typically based on term of loan and repayment ability of consumer (based on customer history and credit score) • Variable cost: expenses that change regularly • Fuel, food • Fixed cost: expenses that stay the same each month • Insurance, mortgage payment

  10. Careers in Agriculture • Choose a career in agriculture • ONE DIFFERENT CAREER PER PERSON • Make a poster with the following information: • Job Title • Job Description • Education Requirements • Work Schedule • Salary • Personal Characteristics

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