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Technology and Agriculture. Economic Impacts of Advancing Technology. How does technological innovation impact agriculture?. Major Technological Advancements in Agriculture Mechanization Chemical Fertilizers Hybridization Biotechnology. How does technological innovation impact agriculture?.

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technology and agriculture

Technology and Agriculture

Economic Impacts of Advancing Technology

how does technological innovation impact agriculture
How does technological innovation impact agriculture?
  • Major Technological Advancements in Agriculture
    • Mechanization
    • Chemical Fertilizers
    • Hybridization
    • Biotechnology
slide3

How does technological innovation impact agriculture?

  • Technology Impacts the Supply of Agricultural Products
  • Supply Shifters
    • Prices of Related Goods
      • Corn – Soybeans
      • Cattle -- Leather
    • Price of Inputs
    • Technology – Allows a farmer to produce more with a given level of inputs
slide4

How does technological innovation impact agriculture?

  • What Does that Supply Shift Look Like?

Price

Supply

Supply1

Original Price

Quantity

Q

Q1

supply and demand elasticities
Supply and Demand Elasticities
  • Demand Elasticity for Agricultural Products
    • Inelastic Demand, Why?
    • What does that mean for the producer?

Price

Demand for Food (Necessity)

Inelastic

Demand for Luxury Automobiles

Elastic

Quantity

supply and demand elasticities6
Supply and Demand Elasticities
  • Supply Elasticity for Agricultural Products
    • Short Run
    • Intermediate Run
    • Long Run

Price

Supply - Short Run

Supply - Intermediate Run

Supply - Long Run

Quantity

new technologies in the livestock industry
New Technologies in the Livestock Industry
  • Artificial Insemination
  • Sexed Semen
    • The ability to choose the sex of the offspring
      • Why Beef Cattle?
      • Why Dairy Cattle?
new technologies in the livestock industry8
New Technologies in the Livestock Industry
  • Cloning
    • The ability to make an exact duplicate animal with the same genetic makeup

Dolly?

Dolly

the case for beef cattle
The Case for Beef Cattle

Price of Beef

Supply of Beef

Supply1 of Beef

Original Price

New Price

Demand for Beef

Quantity of Beef

what about the market for steers
What about the market for Steers?

Price Steers

Supply of Steers

New Supply of Steers

Demand for Steers

Quantity Steers

and the market for heifers
And the market for Heifers?

Price of Heifers

New Supply of Heifers

Supply of Heifers

Demand for Heifers

Quantity

the technological treadmill theory
The Technological Treadmill Theory

How does technology affect

the total revenue of the farmer

over time?

Price

Supply

Demand

Quantity

the technological treadmill theory15
The Technological Treadmill Theory

Price

Total Revenue = Price * Quantity

Supply

When supply increases from the

technological change, what

happens to Total Revenue?

P

TR

Demand

Q

Quantity

the technological treadmill theory16
The Technological Treadmill Theory

Price

New Total Revenue = Price1 * Quantity1

Supply

S 1

Supply has increased and Total Revenue

changes from the tan box to the blue

box.

P

P1

TR1

Demand

Q

Quantity

Q1

the technological treadmill theory17
The Technological Treadmill Theory

Price

Supply

S 1

The red shaded region is a loss in

total revenue and the green shaded

region is the gain.

Since the loss is larger than the gain

Total Revenue has gone down.

P

Loss

P1

G

A

I

N

Demand

Q

Quantity

Q1

the technological treadmill theory18
The Technological Treadmill Theory

Price

Supply

S 1

Why does this happen?

Inelastic demand of agricultural

commodities.

P

Loss

P1

G

A

I

N

Demand

Q

Quantity

Q1

emerging technologies in production agriculture over the last decade
Emerging Technologies in Production Agriculture Over the Last Decade
  • First Generation Technologies
  • Biotechnologies that have made it to market
    • Flavr SavrTM Tomatoes in 1994
    • Bt Cotton
    • Roundup Ready Soybeans
  • Second Generation Technologies
biotechnology and the agricultural marketing system
Biotechnology and the Agricultural Marketing System
  • How is the marketing system going to handle new products that used to be just commodities?

Commodity

Value Added Product

other potential impacts from biotechnology in agriculture
Other Potential Impacts From Biotechnology in Agriculture
  • This impact on the marketing system could create opportunities for other products as well.
    • Non-Traditional Crops
    • Organic Crops
    • Heritage Crops and Livestock