American Agricultural Industry

By facial expression at the historical highs and lows and the American bring uping(a) orbit, these constitute a success story. The previous(predicate) 1900s saw the golden days of farming with m some(prenominal) an(prenominal) thriving farm attains crosswise the coupled States. With some(prenominal) farms, controversy heightened and unneurotic with early(a) economic factors resulted to the worsening in the verdant sphere of influence in the later(a) 1920s up to the early thirty-something resulting to the bankruptcy of many lesser farms. woebeg 1 lands became residential and commercial argonas spot the farms that remained became bragging(a) farmlands that grew beca ingestion of technical advancements.This transformed the composition of the coarse arena from many flyspeck to median(a) farmlands to ceding backs of big farmlands driven by boastful capital investments and technological victimisation. G eitherwherenment policies contri merelyory to the fes tering of the countrified arena excessively contri howevered to the further development of the rustic sector. Although many pure farms closed, the long-term impact of convinces in the uncouth sector is the decline in farm poverty beca call of high productiveness and lower tolls from the abatement of competition to a certain extent.Although, contemporary awkward sector has not re prepareed the position it reached during its golden age, ripening is sustain adequate to(p). (Gardner 1-3) The present unpolished sector survived because of quaternion factors. First is capital investments, in which the banking and pecuniary sector played an eventant part. sulphur is sustained productivity due to the development of technological tools and processes. Third is regime delay for explorees in the countrified sector to patronage sound insurance policymaking.Fourth are the set- ge deposit programs of the presidential term for st king that bene salvos farm owners by enabling them to clear sufficient profits to sustain go along intersection as well as consumers by dint of lower prices so that feed constitutes less than ten share of the figure of utilisation of American households. (Gardner 337) Methods of product and dispersion Production and distribution in the American plain varies among the bulky and microscopical farms.In the case of the large farms, the method of product targets the mass commercialise and takes advantage of economies of measure and the mode of distribution is by means of mass- commercialiseing outlets such as large supermarkets and former(a) sell venues astray accessible to consumers. in that location are large farms that suck up been able to produce more than one rural product and these distribute products within economies of setting by bundling complementary goods. heroic farms achieve economies of scale of measurement by exploitation high-engineering tools and processes and taking advantage of the teemingness of workers in the exertion market.Production in large farms use tractors to till land, small planes to spread pesticides over vast tracts of land, regulated water sprinklers, and other implements or tear down biotechnology by using pest or tole straddle resistant varieties of generators, vaccines for rattlingstock, and weight control systems. Although these make costs, it is exactly on a one-time tush with cost-savings accruing in the long-term, and technology supports mass t oil. pear-shaped farms as well depend on contractual workers for the necessary manual work and the abundance of unskilled labor especially approach shot from Mexico has allowed farms to cut back on cost. ascribable to cost-efficiency, large farms are able to cut-down on yield costs and ensure high yields resulting to the ability to offer competitive market prices. As such, large farms are able to put one over large supermarkets as distribution bring by offering a large mark-up price and gains for the retailers. (Paul and Nehring 526-528) In the case of the small, farms, production depends on its cost structure, revenue generation, and market so that methods of production implements basic technological tools and processes together with manual labor.The low scale of production of small farms led to niche marketing targeting only a express mail market to ensure sales. Distribution transmit are through on-site retail outlets, groceries, and specialty stores. (Paul and Nehring 526-528) Market Structure and soaking up Market structure of the American artless attention experienced greater degrees of concentration. proficient developments extradite segmented the American pastoral industry into two groups.One are the mode mark number of large farms that, in a way, can be considered as run within an oligopoly or even nearing monopoly, invite out only for the government prerogatives to intervene to encourage public policy. The other is small farms operationa l in an atomistic structure so that these do not have any significant effect on prices. thither is a wide gap between the large and small farms in toll of productivity and market impact, with the large firms direct with large capital and employing high technology processes while households usually run small farms with limited workers using technological tools that fit their expenditure range.This resulted to high barriers to entry and exit. blow to estimates, the number of farms in the American agriculture sector experienced little change in the number of players since at that place are around 2. 1 gazillion farms be with an average of . 25 percent decline rate. This is because the large firms have remained stable with elaboration through the mergers or the acquisition of small farms. Movement occurs in the case of small firms through the entry of small farms specializing on certain farming(a) products for niche markets to pull through in becoming part of the awkward market .In addition, the difference in farmland in like manner widened with the large farms producing on more than 1,000 solid ground of land while small farms only have less than 50 acres. (Ahearn, Yee, Korb 1182) Due to the segmentation of the American rude sector into a few large farms and many small farms, unsophisticated production is concentrated in the large firms contributing two-thirds to the direct pastoral production in the get together States of molecules, fruits and vegetables, and livestock. The remaining one-third comes from small farms. (Ahearn, Yee, Korb 1183)Degree of orthogonal Competition The degree of conflicting competition in agricultural swop has big because of the rise in the importation of agricultural products by the linked States. This means that external competition has escalated due to the entry of agricultural imports, especially from developing countries. Projections show that in the next years the balance of hatful would tip in favor of agri cultural imports. During the 1980s up to the early 1990s, the get together States is a string player in the exporting of agricultural products so that exports exceeded imports.By the mid-1990s, the wasted in agriculture trade has declined from $27. 3 one million million to $10. 5 billion so that even if agricultural exports hold out to increase, the tawdriness of imports is also doubling. This was due to the rise in agricultural export prices as the American economy experienced growth. scotch growth also fireled agricultural imports since Americans had the income to purchase foreign products that flooded the market due to price differences. (Jerardo) Now, growth and patterns of use of goods and services would further fuel the growth in the imports of agricultural products.Rise in consumption together with the growe vulnerability of American consumers to international cuisine would continue to favor the importation of agricultural products. The consumption of foreign agricul tural products should increase from 13 percent in the next years. (Jerardo) The major(ip)(ip)(ip) competitors of the get together States in agricultural trade are China, India, Indonesia, Mexico and other agriculture-based economies in Latin America. These countries have large populations but these are also primarily agricultural economies owing to favorable climate conditions and low labor cost.Raw agricultural products come from Mexico and the Latin American countries because of geographic proximity while impact nourishments, which comprise 62 percent of fodder consumption of Americans, come from China, India and Indonesia. (Jerardo) Industry lead The agricultural sector in the United States is a mix of sub-sectors such as livestock or fruits and vegetables, seeds or feeds, backpacking or process, and research and development. The industry leaders have imperils in many or all of these sub-sectors to ensure their competitiveness, industry position, and market share.Leaders i n the agricultural sector comprise not really of the owners of farmlands but the firms controlling the agricultural sectors encompassing production, harvesting, processing, packaging, transport, and export of agricultural products. Large farms and agricultural firms have created clusters to gain access to these different sub-sectors. The glob is dynamic depending on the shifts brought about by mergers and acquisitions. Currently, in that location are three clusters comp come up the leading agricultural sector players. (Helper 1288) Cargill/Monsanto.Cargill is a large firm prosecute in the seed operations including research. It has a large capitalization and control over farmlands along the Ohio and Illinois River basin. Cargill purchased Continental grain to gain access to corn, husk berry and sojas production along the Mississippi River for export. Monsanto is widely engaged in biotechnology and it has acquired transparent over transmissible products that ensure cave in yields through more resistant agricultural produce. Cargill entered into a joint venture with Monsanto in 1998 to gain access to the patented genetic products by offering its large capitalization as fillip.Cargill/Monsanto focuses on the production, processing, packaging, marketing, and export of seeds as well as corn, wheat and soybean products. (Heffernan) ConAgra is engaged in various sub-sectors as a top-three flour miller, top-four corn miller, top-three live stock feed producer, top-two in kine slaughtering, top-three pork processor, and top-five broiler producer and processor. United Agri Products, a subsidiary also engages in seeds, fertilizers, and other agricultural chemicals as well as biotechnology. It has its own packaging and processing plants as well as land and water transportation subsidiaries.It collaborated with ADM for the operation of a grain export facility. ConAgra also has a stake in production, processing, distribution and export of grains and livestock. ( Heffernan) genus Sagittarius Daniels Midland Company (ADM) constitutes the largest processor of agricultural products such as corn, soybeans, wheat and cocoa. It collaborates with farm cooperatives to obtain birthday suit agricultural products for processing or gained shares in firms engaged in agricultural production such as Growmark, Countrymark, United Grain, and Riceland.It has expanded into the other sub-sectors through a join venture with Novartis to gain access to seeds, biotechnology, and agricultural chemicals. It has also engaged in the raising, slaughtering and processing of livestock through joint ventures with Consolidated Nutrition and AGP. ADM has also been able to participate in the major sub-sectors. (Heffernan) Thus, the agricultural sector in the United States operates through corporate farming. Scarcity of prop Scarcity of agricultural land the in the United States pertains to the land use renewing and degradation of agricultural lands due to the use of chemi cals. vote out conversion slumps farm size while land degradation reduces productivity or causes shift in production from one agricultural product to another. This also pertains to the parity of agricultural production with the consumption of agricultural products. In the United States, agricultural lands constitutes 46 percent of the land base, which remains a significant percentage share considering the vast industrialization of economic sectors. Of the 2. 3 billion acres of land comprising the United States, 442 million acres comprise croplands and more than cholecalciferol million acres of farmsteads, sometime(prenominal)ures and ranges.Conversion of agricultural lands is not significant so that in the past thirty years, only six percent of agricultural lands have been converted for other purposes. In damage of land degradation, reports have not raised alarm on the rate of land degradation. In terms of nutrition consumption, the increase in food imports is fuelled by chang e in consumption patterns and not the inability of agricultural lands to support the food call for of Americans. Moreover, the U. S. remains a major food exported. Land scarceness does not constitute a major problem in the American agricultural sector.(Brady) Impact of Ethanol Production on Wheat Production and Cost to Consumers The government has implemented a fixed indemnity on fermentation alcohol at a floor rate of 40 cents for every gallon and a ceiling rate of 60 cents per gallon. The subsidy served as an incentive for production of ethanol as an substitute(a) rise of fuel in the United States. Relative to price of crude oil, ethanol is slightly cheaper depending on the bulk of production. However, in the early 2000s, the price of crude oil skyrocketed to as much as $80 per barrel.The huge difference in price opened opportunities for the expansion of ethanol production because of the fixed subsidy together with the live for price increase that would still be below cru de oil prices but constituting significantly higher prices than its previous market offering. This means that some farmers have shifted to the sowing of raw materials of ethanol leading to a decrease in the number of farmers and farmlands producing agricultural products. This in turn led to the rise in the prices of agricultural products such as wheat and even soybeans.In addition, other election sources of power have gained momentum such as corn. Although corn receives lower subsidy compared to ethanol, the espousal of the agricultural sector in alternative sources of energy could significantly affect the volume of production of other agricultural products that would strengthen costly for consumers in the form of higher food prices. This effect has led to the offset of the issue of food-fuel prioritization. (Tyner and Taheripour 1303) This is to date to be unyielding and this would continue to experience an issue in the agricultural sector until the next decade.Conclusion brain for the American agricultural sector in the future points to a positive spatial relation because the United States would continue to become a major player in agricultural exports while providing agricultural products to the domestic market. However, there are a number of policy issues that requires due consideration. First, forecasts of balance of trade shows a further decline in agricultural trade surplus with some even suggesting the probability of trade deficit.This is because even if agricultural production experiences growth, the flood of imported food products could be greater, especially when these food products become cheaper as the price of domestically braggart(a) agricultural products increase. This will have a significant adverse impact on the American agricultural sector. Even if there is no food shortage, the flooding of cheaper agricultural products could contribute to the decline in the agricultural sector. The government needs to assess its import policies t o balance consumer demand with the viability of the agricultural sector.Second, land use and agricultural production needs assessment, since this falls within federal and state regulation, especially in the context of the food-fuel debate. The rising prices of agricultural products could be eased through the application of a flexible sort of of a fixed subsidy rate together with the continued investment in research and development to justify the continuance of subsidies for ethanol and even the focus on fuel from corn. It has been thirty years since the government started implementing subsidies on ethanol but ethanol as an alterative fuel has yet to become a commercial source of energy as intended.Thus, government policies on price support and agricultural research has played an important role in the growth of the American agricultural sector and this will not change in the future since the issues faced by the agricultural sector fall within the celestial sphere of policymaking a nd subject to government regulation. Works Cited Ahearn, bloody shame Clare, Jet Yee, and Penni Korb. Effects of Differing Farm Policies on Farm Structure and Dynamics. American journal of sylvan economics 87. 5 (2007) 1182-1189. Brady, Michael. Land Use, Value and Management. 18 October 2005.USDA Economic enquiry Service. 26 April 2008 Gardner, Bruce. American Agriculture in the Twentieth Century How it Flourished and What is Cost. Cambridge, MA Harvard University Press, 2002. Heffernan, William. involve on Concentration in U. S. Agriculture. 5 February 1999. Institute for Agriculture and Trade form _or_ system of government. 26 April 2008 Helper, Susan. Empirical Research in an more and more Concentrated Industrial Environment Discussion. American Journal of artless Economics 89. 5(2007) 12881289.Jerardo, Alberto. The U. S. Agricultural Trade Balance More than skillful a Number. 1 February 2004. USDA Economic Research Service. 26 April 2008 Paul, Catherine, and Rich ard Nehring. Product Diversification, Production Systems, and Economic Performance in U. S. Agricultural Production. Journal of Econometrics 126. 2(2005) 525-548. Tyner, Wallance, and Farzad Taheripour. Renewable Energy Policy Alternatives for the Future. American Journal of Agricultural Economics 89. 5 (2007) 1303-1310.