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What Changes Are Possible in World Agriculture in the 21 st Century? PowerPoint PPT Presentation


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What Changes Are Possible in World Agriculture in the 21 st Century?. Agriculture’s New Era. A new era in agriculture created by drivers . These drivers are revolutionizing the industry and permanently altering traditional relationships.

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What Changes Are Possible in World Agriculture in the 21 st Century?

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What Changes Are Possible in World Agriculture in the 21st Century?


Agriculture’s New Era

A new era in agriculture

created by drivers.

These drivers are revolutionizingthe industry

and permanently altering traditional relationships.

Farm businesses that recognize, understand and

pro-actively adapt to the WORLD’S needs will

growand prosper.


Drivers of Change

  • Globalization of Markets and Resources

  • Consumers’ Evolving Preferences

  • A More Demanding Food Industry

  • Government Interaction/Regulation

  • The Pivotal Role of Technology


World Population Growth

Populations continue to rise …

End of the Cold War has allowed countries to reallocate resources and increase standards of living.

Growing incomes allow people to buy more and better quality food (changing preferences).


Drivers & The Farm Business

Globalization Consumers Food Industry

Technology Government

The Farm Business

Environment ??


The New Agriculture …Farm Business Environment

  • International Markets

  • Commercialization/Biological Manufacturing

  • Ecological Agriculture

  • Differentiated Products

  • Food Supply Chains

  • Information/Precision

  • Risk

  • Diversity


International Markets

  • New Markets in Old Places

  • More Liberal Trade Environment

    Competitive Pressure !

  • Global Access to Technology

  • Increased World Wide Production Capacity

  • Global Sourcing and Selling


Percent of World Grains and Oilseeds Produced in U.S.


Commercialization

Commercial (Industrialized) Mentality

  • Full Utilization of Resources

  • Managing Inventories

  • Specification Buying

  • Outsourcing

  • Process Control Technology


Process Control Technology

  • Monitoring/Measuring and Information Technology

    • attribute traceability throughout the chain

  • Biotechnology/Nutritional Technology

    • manipulation of attribute development and deterioration

  • Intervention Technology

    • anytime intervention if attribute development deviates from potential (gap resolution)


Ecological Agriculture

  • Total Biological Systems

  • Recycling Nutrients

  • Capturing Value from Byproducts

  • New Revenue Streams

    • Carbon sequestering

    • Environmental amenities

    • Wildlife/wildlands


Differentiated Products

  • More Differentiated, Less Commodity

  • More Attribute Driven/Value

  • More Traceability/Identity Preserved

  • Types of Products

    • Generic commodities

    • Enhanced component commodities

    • Specific attribute raw materials


The Food Supply Chain

  • More End-User Responsive

  • Better Flow Scheduling

  • Improved Quality Control

  • Food Safety-Traceback

  • Competitive Advantage? Sustainability?

  • Who Will Control?


Information/Precision

  • Monitoring/Measuring Technology

  • Smarter Machines

  • Process Control/Quality

  • Span of Control


Risk

  • Operating/Tactical Risk

    • More volatility

    • Short peaks, long troughs

  • Strategic Risk

    • Relationships

    • Environmental

    • Policy changes


Diversity

  • More Differences Between Farms (no typical farm!)

  • More Market Segments

  • Customized Solutions

  • More Conflict/Confrontation


Business Models

  • Independent Producers

  • Multiple Plant Entrepreneurs

    • General managers

    • Plant managers

    • Workers

  • Franchise Growers

  • Network Qualified Suppliers

  • Piece Work Contractors


Management Skills Areas

  • Strategy

  • Production

  • Finance

  • Procurement/Merchandising

  • Personnel

  • Leadership


Successful Strategies?

  • Develop a Strategic Direction

  • Adopt New Technology Appropriately

  • Control Cost

  • Evaluate Networks/Alliances/Linkages

  • Manage Risk

  • Expand Carefully

  • Think like a CEO/general manager


Key Challenges in Agriculture’s Future

  • Adapting to change

  • Evaluating technology

  • Achieving profitability

    • Cost cutting

    • Growth

  • Defining organizational capabilities

  • Achieving organizational transformation


Strategic Business Planning for Commercial Producers


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