Agricultural_Industry_Final_Paper

Agricultural_Industry_Final_Paper - Agricultural Industry 1...

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Agricultural Industry Agricultural Industry and the Economy 1
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Agricultural Industry With the current economic slump affecting almost every industry, it is inevitable that the Agricultural Industry would be severely affected in several ways. Overall, the Agricultural Industry has been hit hard with current economic slump that we are in. The agricultural and food industry includes the following categories: regulation, research and development, manufacturing, agriculture, food processing, marketing, wholesale and distribution, and retail (FSA, 2008). It is defined by the Economic Research Service of the USDA as the following: “The U.S. food marketing system links farms to consumers via food manufacturing, wholesaling, and retailing (food stores and foodservice facilities). The cost of marketing services, including transportation, processing, and distribution of farm products, account for a substantial portion of food prices, with the farm value component accounting for the remainder.” (Martinez, 2007) An average of nearly $3.2 billion dollars was collected in food sales alone in 2004. The Agricultural Industry has been up and down for years, and hit a downfall in 2000 because of minor economic changes dealing with foods and goods being transported from oversees. The Agricultural Industry took about 3 years to equal and surpass their previous record highs after that. (BTS) Years later after reaching stability, the economy goes into a slump again, and a worse situation occurs in the Agricultural Industry. Prices of gas were recently at record highs, along with the price of oil at record highs. Not to mention that economists have estimated that these highs are not going down anytime soon, and should increase this summer to $4 or more. As an aviation specialist stated in an article from the Times, “The global Agricultural Industry is facing a recession far more severe than the slowdown of the airline industry that was endured after the terrorist attacks of 2001”. (TimesOnline) I am sure the Agricultural Industry would agree with that statement. 2
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Agricultural Industry Unfortunately, that event is still in our minds and is one of many reasons that our economy is feeling the heat along with our pockets. The situation with the economy has mostly affected the agricultural industry by forcing super markets and grocery stores to raise their prices on foods and goods. This is ultimately because farmers and oversees shipping prices have also risen. So how does this, and other factors of the economy, affect the Agricultural Industry? The sales of supply, and demand of the food industry tend to profoundly subsist upon consumer trends and preferences. Although these corporations do put on the market their food production sales directed at selling towards large quantities of food to corporations, consumer sales are where the most sources of profits lies. As a result, these areas are maximized in the sense that the marketing of wholesales and distribution of
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Agricultural_Industry_Final_Paper - Agricultural Industry 1...

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