Key Concepts in Agribusiness Management

Marketing Management

A key function of Agribusiness Management focused on promoting and selling products.

Financial Management

A key function of Agribusiness Management that involves managing the financial resources of the business.

Supply Chain Management

A key function of Agribusiness Management that oversees the flow of goods and services.

Human Resources Management

A key function of Agribusiness Management that deals with the recruitment and management of employees.

Accounting Profit

The profit calculated based on total revenue minus total explicit costs.

Economic Profit

The profit calculated by subtracting both explicit and implicit costs from total revenue.

Demand Curve Shift Factors

Factors that cause the demand curve to shift, including change in technology, expectations, weather, and number of suppliers.

Price Elasticity of Demand

If the price elasticity of demand is -1.3, the demand is price elastic.

Cross-Price Elasticity of Demand

If the cross-price elasticity of demand is 1.9, the items are substitutes.

Income Elasticity of Demand

If the income elasticity of demand is -0.5, the goods are inferior.

US Dollar Value Decrease

When the value of the US dollar decreases relative to other currencies, US agricultural goods become less expensive.

Marketing Mix Decisions

Key decisions a marketer must make include product, price, promotion, and place.

Strategic Marketing Plan Activities

A strategic marketing plan involves choosing a target market, developing the appropriate marketing mix, and choosing a position.

SWOT Analysis Exclusions

Objectives are not included in the SWOT analysis.

Creating Desired Image

The process of creating the desired image in the customer's mind is called differential advantage.

Positioning Definition

Positioning is what you do to the product.

Marketing Mix Exclusions

The marketing mix includes all of the following, except profit.

General Economic Forecasts

General economic forecasts could cover government farm programs, inflation, interest rates, and all of the above.

Accrual Basis Accounting Example

Rockin' M Fencing ships 105 panels to a local cattle operation, recording the sale of goods without receiving payment, which is an example of accrual basis accounting.

Accounts Payable and Receivable

Accounts payable and accounts receivable are current liabilities.

Limitations of Financial Ratio Analysis

Limitations may include cash basis of accounting used for income statements, market values for asset valuation, and balance sheets not prepared consistently.

Solvency Definition

The ability of a firm to meet all financial commitments is called its solvency.

Financial Ratio Analysis Comparison

The set of ratios used to evaluate an agribusiness firm may differ from those used for nonagricultural firms.

Purpose of Financial Ratio Analysis

One reason financial ratio analysis is used is to compare the firm's condition and performance to other similar firms.

Fixed Costs Definition

Total costs that are constant regardless of the volume sold during the period are called fixed costs.

Productivity Definition

Productivity can be defined as the dollars (or quantity) of output produced divided by the dollars (or quantity) of resources used.

Operations Management Areas

Operations management for food and agribusiness firms can be broken down into production planning and supply chain management.

Periodic Inventory Definition

The inventory type that uses an actual physical count of stock on hand conducted at regular intervals is called periodic inventory.

Current Operations Management Objectives

Current operations management objectives include better customer service, reduction of risk, globalization of operations, and all of the above.

Supply Chain Management Definition

Managing the flow of materials into and out of the firm is called supply chain management.