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 suppliesproduction operations on the farmstorage, 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”

ProductionProcessingRetail 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 metalAllowed people to cultivate larger areas of land

fasterCaused agriculture to spread throughout the world

and become a way of life

Bronze Age developments:Bronze tools and plowsNile River used to irrigate cropsWheel was discoveredPopulation rose from 3 million to nearly 100 million people

1000 B.C.Use of iron allowed for massive crop productionTrade among people resulted from the surplus

of goods

Iron Age developments:Iron hand tools and plowsDevelopment of moneyLeaving land fallow became a common practice

A.D. 400-1500Fall of the Roman Empire slowed the growth of

agriculture

Middle Age Developments:Crop rotationNew harness for plowingSelective breeding of livestockFences

American agriculture now began to develop because Columbus discovered the “New World”

Developments during this time led to the way we farm todayPractice 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 landInvention of cotton gin by Eli Whitney in 1793Discovery of vaccines by Edward Jenner Invention of first one-piece, cast-iron plow in 1819 by Jethro WoodInterchangeable parts for equipment

1840s and 1850sSpurred the growth of production

agriculture and agribusinessMovement from farms to factories in citiesShift from animal power to man powerTo produce ONE acre of wheat…

56 hours of manpower before 1830Less than 2 hours today

Steam engineRailroadsSewing machinePowered loom for weavingAutomobile by Henry FordCrop rotation promoted by Charles TownsendLivestock breeding advances by Robert BakewellSeed 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 machinesBetter transportationMarketing OptionsHigh farm pricesFarming research

Bureau of Forestry established by U.S. government Vaccine developed for hog choleraPanama Canal opened for shippingCooperative Extension Service createdFederal Land Banks were established to give farmers

creditHybrid plant seed developedSmith-Hughes Act established vocational agriculture in

high schoolsDevelopment of new products by agricultural scientists

such as George Washington Carver

Farmers could not sell as much overseasFarm prices droppedMany farmers went bankrupt“Dust Bowl” devastated mid-western farmsEntire country lost moneyStock market crashed in 1929Great 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 endedFarm prices increasedAdvanced farming methods established:

Artificial inseminationElectric fencesDisc plowsChemical fertilizers and pesticidesFutures trading ComputersGene splicingCloningGene mapping

Farm machinery dealershipsCommodity (futures) brokersArtificial breeding servicesResearch consulting firmsAgricultural chemical companiesVeterinary supply companiesLivestock supply companiesAnimal feed companiesBiotechnology firmsExport 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 farming1880 – 536 million acres used for farming

1800 – 90% of population lived on farms1900 – 50% of population lived on farms

Farmers became self-sufficientFarmers increased productivity and profitUsed additional earnings to purchase equipmentMade 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 powderTurpentineCoal 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 engines1911 – 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 tractorsOriginally 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 tractors1920 – 166 companies sold 200,000 tractors

Great Depression Effects:1921 - 186 companies sold only 68,000 tractors1925 – 58 companies survived

After the Depression:20 companies sold more than 1 million tractors90% 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)1918International HarvesterAllowed operator to control mounted and drawn

equipment with the engine of the tractorPneumatic Rubber – Tired Tractor

1932Allis ChalmersCompleted basic design of a light versatile

tractor that could handle most farm jobsThese advancements finalized the transition

from horses and mules to tractors with internal combustion engines

Decreased demand for animal feeda large portion of the land that had been used

to produce animal feed was shifted to the production of food

Reduced labor time and costProducing 100 acres of corn:

141 days with animal power51 days with tractor power

Caterpillar Tractor Company1931developed a diesel-powered, crawler-type farm

tractordiesel engine had a major impact

Minneapolis Moline Company1941Liquefied Petroleum (LP) gas tractorsmade it possible for farmers to use clean-

burning, low-cost butane and propane for fuels

Hydraulic lifts Torque amplification Hydrostatic transmissionPower steeringTurbochargersHeated 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 fuelMore than 80% of tractors now use diesel

Increase in horsepowerMost tractors have hp rating of 200 or more

Shift to 4-wheel drive powerAbility to use more power efficientlyBetter traction and flotation with less soil compaction Increased safetyStandard on large tractor modelsOptional on medium and small models

One farmer provides for 150 peopleAmericans only spend 9% of income on food 1500 pounds of food supplied for each US citizenNumerous exports produced as wellPromotes world peace and securityRestrictions from government on exports

Could today’s farmers meet the world’s need for food, clothing, and shelter if restrictions were lifted?