FFA Marketing cram

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Agricultural Marketing

All activities and organizations involved with the flow of farm-produced goods, raw materials, and derivatives, such as textiles, from farms to ultimate customers, as well as the effects on farms, middlemen, and consumers of such operations.

Impacts of agricultural marketing

• Optimizes resource use, enhances market surplus

• Increases farmers’ income

• Growth of agro-based industries

• Employment rate

• Increases productivity, consumption, and accelerates economic growth

Importance of marketing to farmers

• Profitability and Sustainability

• Differentiation

• Direct Consumer Growth

Profitability and Sustainability

Helps the farmer continue using high quality resources (input) to result in high quality products (output) for the consumer 

Differentiation

Allows farmers to stand out from large corporations and cheap commodities by highlighting unique values

Direct Consumer Growth

Platforms like Farmers Markets, CSAs, and online sales (crucial for smaller operations) depend on effective marketing

Importance to students

• Development of Employability Skills

• Real-World Application

• Building Community Partnerships

How to create a marketing strategy

• Conduct market research

• Define target audience

• Implement advertisements and launch campaigns

Conduct market research

Use surveys, demographics, and online tools to gather data that will inform your strategy. Analyze your market and competitors to identify opportunities and threats.

Define target audience

Understand your ideal customer through demographics, preferences, and purchasing behavior. Set your business apart / make it stand out to the specified audience who are most likely to buy your product

Implement advertisements and launch campaigns

create compelling content that resonates with your audience. Use project management tools to ensure timely delivery and collaboration.

Transparent supply chains

the practice of being open with sharing information on where and how your products are sourced, manufactured, and distributed

Eco-friendly packaging

minimizes waste and unnecessary plastic packaging

Term for agricultural cooperatives

private business corporation

private business corporation / agricultural cooperative

• producer-created business organized to fulfill the specific needs of its membership

• democratically controlled and owned by its producer members

• professionally managed

• provides services at cost to its members and distributes any profits or savings to its members in proportion to their use or “patronage”

The cooperative gives producers the joint capability of tapping into value-added profits by

• developing processing and distribution facilities

• hiring product design, marketing and management professionals

• delivering high quality, specialized products to the consumer

Cooperatives enable producers to increase their net farm income in two ways

• reduced farm production costs

• value-added returns from the crops

Capper-Volstead Act

provides a limited exemption from anti-trust liability for marketing agricultural products on a cooperative basis.

Capper-Volstead Act 2

Under this law, farmers can agree on the prices they will accept for their products and other terms of sale

Direct-to-Consumer (D2C)

In 2015, over 80% of D2C sales occurred within 100 miles of the farm, prioritizing farmers markets and on-farm stores

Wholesale and Contracts

Utilizing futures contracts, basis contracts, and average seasonal price contracts to hedge risk

Marketing Mix

Focusing on product, price, place, and promotion to achieve sales objectives

Digital Presence

Using social media, web presence, and digital marketing to build a brand identity

Agent

• A person or firm authorized to act on behalf of another.

Audit

An examination and verification of accounts and records of a business performed in accordance with specified standards.

Broker

One who is paid a commission or fee to bring together buyers and sellers to complete  a market transaction.

Capital

several financial meanings, but often refers to the sources of funds used to finance the assets used by a company in its activities. This type of capital can be provided by equity, debt, or both.

Collateral

Security (assets) pledged for the payment of a loan. May include stocks, bonds, land, equipment, buildings, or a farmer’s crop.

Depreciation

An accounting method used to record the decrease in value of long-lived assets over time.

Exempt cooperative

A producer cooperative that may deduct from income amounts paid as dividends on capital stock, and earnings originating from nonpatronage sources that are allocated to members on the basis of patronage, under section 521 of the Internal Revenue Code.

Investor‐oriented corporation

a form of business that is operated on a for‐profit basis and obtains capital funds through sales of stock shares.

Net Margins

The net amount earned by a cooperative, normally available for distribution to members. Often called net proceeds in marketing cooperatives.

Non-exempt cooperative

A cooperative that may not deduct from income amounts paid as dividends on capital stock, and earnings originating from nonpatronage sources that are allocated to members on the basis of patronage

Patronage

The commerce done with, or on behalf of, the members of a cooperative

Patronage refunds

Cooperative earnings on member business that is returned to members in proportion to their individual patronage.

Per-unit retains

Capital investments required of a member of a cooperative, based on either the number of physical units handled by the cooperative or a percentage of sales revenue for that member.

Pooling

The averaging of net returns to producers for a particular grade or variety of product delivered during a specified interval of time.

Retained Patronage earnings

 The portion of patronage earnings retained by a cooperative as equity. Retained patronage earnings are usually allocated to members and documented by a written notice of allocation.

Return

The earnings on an investment, such as interest or dividends.

Revolving capital funds

Retained patronage earnings are per-unit retains and usually returned in full to members after a period of years, as determined by the board of directors. These equities are collectively referred to as revolving capital funds.

Single tax treatment

When business earnings are taxed only once rather than on the tax returns of both the business that earns the profits and the individuals that eventually receive them in the form of cooperative patronage payments, dividends from corporations, etc.

Sole proprietorship

Businesses formed as sole proprietorships are a legal extension of the owner as an individual. That owner sets policies, is entitled to business earnings, and is personally responsible for business debts and liabilities.

Statute

An enactment made by a legislature and expressed in a formal document, law, act, or ordinances 

These tools help farmers optimize resources, manage inventory, and determine pricing strategies, notes Research Starters

• Linear programming for profit maximization and optimal crop mix

• Regression analysis for demand forecasting

• Cost-benefit analysis for financial viability

• Inventory Management

To develop a regression model to predict wheat yield using the following variables

• Number of tillers per plant.

• Plant height (cm)

• Number of grains per spike

• 1000-grain weight (g)

• Irrigation frequency.