Download - Farm Transactions
![Page 1: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/1.jpg)
Farm Transactions
AG BM 102
![Page 2: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/2.jpg)
Farm Inputs
![Page 3: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/3.jpg)
Introduction
• Modern agriculture involves lots of purchased inputs
• Machinery, equipment, fertilizer, chemicals, fuel, seed, semen, feed, credit
• The input industry is part of the system
• Often a very integrated part
![Page 4: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/4.jpg)
Wenger Feeds
• Sells feed for broilers, eggs, and hogs
• Thousands of formulations
• Works with producer to solve problems – shell strength
• Big customer base – lots of deliveries – 24 hours per day
• Can’t let anyone run out of feed
![Page 5: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/5.jpg)
Wenger Feeds
• Limited storage space – need to schedule corn and other raw material deliveries well – a couple days of corn
• Rail or truck?
• New sites
![Page 6: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/6.jpg)
![Page 7: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/7.jpg)
In General, Input supplier
• Works with farmer to help farmer succeed
• Provides advice
• Lots of service
• Not like supermarket – choose, buy, & leave
• Tries to have flow of business
![Page 8: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/8.jpg)
Employs PSU Grads
• Fertilizer
• Pesticides
• Feed
• Pharmaceutical products
• Credit
• Lots more
![Page 9: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/9.jpg)
Need College Grads
• Technical issues
• Integration of lots of factors
• Need to be able to understand company’s research
• Work within system
![Page 10: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/10.jpg)
Integration
• Contracts tie inputs to outputs
• Chickens, hogs, vegetables
• Food safety requirements for drugs, sprays, etc.
![Page 11: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/11.jpg)
Coops in Farm Supply
• Long history• Spatial monopoly• Some have done well• Others struggled• Agway, Farmland• Very competitive – success requires good
management & efficient operation• Usually ease of entry
![Page 12: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/12.jpg)
Other Comments About Input Markets
• Quality of output related to use of inputs
• Quality, timing, appropriateness
• Advice can be a big factor here
• Farm services – milk testing, feed testing
• No farmer stands alone!
• Also, without farmers no input industry – can’t pursue strategy of getting rich at farmer’s expense
![Page 13: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/13.jpg)
Other Comments About Input Markets
• Small farmers at a disadvantage here
• However, most farmers small compared to seller
• Higher input costs make it harder to compete
• Doing a good job here can really help profitability
![Page 14: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/14.jpg)
Farm Outputs
![Page 15: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/15.jpg)
Introduction
• You have produced the product – now what?
• How much is it worth?
• How can you get the most for it?
• What are your choices?
• I hope you have thought about this before
![Page 16: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/16.jpg)
How much is it worth?
• How do you get the price?
• Lancaster Farming
• Internet
• Calling known markets
• Talk to your neighbors
• Futures markets
![Page 17: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/17.jpg)
What is your quality?
• All corn, milk, cattle, and apples are not alike
• Some get premiums, some get discounts
• How much are the premiums and discounts?
• How can you move up a step?
• What will it cost you?
• Is it worth it? Premium vs. costs
![Page 18: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/18.jpg)
How can you get the most for it?
• Consider several alternatives
• Work out math – hauling fees, charges & commissions, time
• Is a bit more worth souring a relationship?
![Page 19: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/19.jpg)
What are your choices?
• Locally
• In general area
• Neighboring states
![Page 20: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/20.jpg)
Plan Ahead
• Should have a market in mind when decision to produce is made – and have talked to them
• Can change mind
• Is a contract possible? Worthwhile? Essential?
• Market identification essential for unusual things – Agriculture Alternatives
![Page 21: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/21.jpg)
Marketing for small farms
• Market access a particular problem
• Also costs per unit are higher – less than truckload lots
• Often need to go through auctions – prices may be lower
• Pool with neighbors if others raise the same thing
![Page 22: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/22.jpg)
Tuscarora Organic Growers
• Jim Crawford – southern Huntingdon County – Organic vegetables
• Sold at site in Baltimore – marketing was taking a lot of time – limit to what market could absorb
• Joined forces with other growers
• Formed cooperative
![Page 23: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/23.jpg)
TOG
• Plan production – deliver to staging point
• Cooperative sells in Washington and Baltimore– develops market
• Members keep traditional clients & markets
• Cooperative broadens customer base
![Page 24: Farm Transactions](https://reader035.vdocuments.site/reader035/viewer/2022062308/568131ae550346895d981c04/html5/thumbnails/24.jpg)
Farmer Transactions
• Often few choices
• Usually no market power
• Direct sales to consumer rarely feasible
• Information essential
• Planning ahead important
• Understand your alternatives