question

California is the number 1 agricultural state in the U.S.

answer

True

question

Agriculture is California's most important industry by percent GDP

answer

False

question

The U.S. spends a lower percentage of household income on food than any other country in the world

answer

False

question

California farms produce more grain and other low value commodities than other states

answer

False

question

California farms and ranches are smaller in acreage but larger in value than US farms and ranches

answer

True

question

In 2013, California produced a record of 46.4 million dollars worth of agricultural products

answer

True

question

U.S. agricultural income is expected to decline to its lowest level in 9 years, due to low grain, dairy and hog prices

answer

True

question

Farmers who hold senior water rights have been spared from water cutbacks during the drought

answer

True

question

The US Census of Agriculture defines a farm as an entity with more than $1,000 in agricultural profits

answer

False

question

Milk and cream is the number one commodity in California, according the California Department of Food and Agriculture

answer

True

question

Farmers get a price break on water from the Central Valley Project if their farms are under the current acreage limitation

answer

True

question

Surface water is the most abundant source of fresh water in California in a normal year

answer

False

question

Agriculture is unique because of seasonality and reliance on weather, among other factors

answer

False

question

Farm owners are increasing wages and offering housing, benefits and education to maintain farm worker loyalty

answer

True

question

Tulare was California's most productive agricultural county in 2013

answer

True

question

Agriculture uses about 43% of the total water available in California

answer

True

question

If you want to find an article for your research paper, you should search a database through the Kennedy library

answer

True

question

Cal Poly subscribes to many databases with full-text, articles, so you should never have to pay for an article to support your research efforts

answer

True

question

Most California farms are in the category of more than $500,000 in sales

answer

False

question

Many technologies to save water are expensive, and have not been adopted until current drought made them economically feasible for farmers.

answer

True

question

The Salinas Valley and Sonoma County both pump groundwater and both have issues with declining salmon populations as the primary environmental issue from overpumping water.

answer

True

question

What are the types of technologies that are helping make farms more productive?

answer

True

question

You find a source for your rutbaga research paper for ABG 101, a commerical website with the name "Rutabagas Rock" and the information seems geared toward elementary students, but it was dated 2015. What part(s) of the CRAAP test might be problematic for this source?

answer

relevance authority? purpose?

question

The company Dan Sutton works for, POVE, is a cooperative owned by five farming families

answer

True

question

Hayler Loehr works for Wells Fargo and does both agricultural and residential lending

answer

False

question

Agriculture is the only U.S. industry to have a trade surplus

answer

True

question

Prices of agricultural commodities have risen much more slowly than the price of agricultural inputs over the last 50 years

answer

True

question

A strong U.S. dollar makes U.S. products cheaper overseas, helping to to increase exports

answer

False

question

Almonds are the highest ranking California agricultural export

answer

True

question

China is California's biggest export customer

answer

False

question

Barges are the cheapest and most common form of transportation in the agricultural marketing channel

answer

False

question

U.S. farmers receive less than 10 cents of the value of every dollar spent on food.

answer

False

question

Haggens' rapid expansion by buying up 164 Albertson's stores has been an excellent strategy for growth for the company

answer

False

question

The food sector, the production agriculture sector and the input sector make up the three segments of the food production and marketing system

answer

True

question

Whole Foods is hiring more people in order to stay more competitive

answer

False

question

Trucking is in lower demand now that the economy is recovering and a surplus of drivers is predicted for the future

answer

False

question

Companies like Nestle are trying to increase frozen food sales by creating new products and capitalizing on new food trends like gluten free, low sodium and less additives.

answer

True

question

Meat processing adds the most value in the food processing sector

answer

True

question

Costco is the nation's largest retailer and grocery store chain.

answer

False

question

Taste preferences, income, and the number of buyers are factors that contribute to changes in quantity demanded.

answer

False

question

The Law of Demand says that price and quantity demanded are inversely related.

answer

True

question

Cal Maine and other large egg producers conspired to inflate egg prices, which is more easily done in an oligopoly market structure

answer

True

question

Growing organic dairy cattle and making artisan cheese from their milk allows a producer to operate in a monopolistic competition market structure

answer

True

question

A shift in demand is caused by either a price or quantity change

answer

False

question

Weather, number of sellers, and changes in the cost of inputs are factors that can change the supply

answer

True

question

Coke and Pepsi are selling smaller cans of soda of higher prices, something they can do because they're in an oligopoly market structure.

answer

True

question

In perfect competition, businesses have a lot of influence on the price they receive for their products

answer

False

question

The corn seed industry operates in an oligopoly market structure, with a few large brand names selling most of the seeds in the U.S.

answer

True

question

Monsanto won a Supreme Court decision upholding its patent rights on its seed technology

answer

True

question

The "Happy Cows" advertisements are the product of private marketing campaign funded by a small group of California dairy producers

answer

False

question

Marketing orders can be amended or terminated once the growers have voted them in, they're usually voted on every four years or so

answer

True

question

Some marketing orders, such as the one for raisins, can limit the supply on the market in an attempt to raise prices

answer

True

question

Advertising is the biggest expenditure of marketing orders, in general

answer

True

question

Once a marketing order is passed, it is voluntary for growers to participate and pay for it

answer

False

question

The consequences of staying out late to celebrate your birthday versus studying for an important agribusiness exam could be referred to as:

answer

opportunity cost

question

Agriculture employs a large number of people

answer

true

question

California is the nation's number one farm state, based on the dollar value of products produced

answer

true

question

California farmers and ranchers produce over ______ crop and livestock commodities

answer

350

question

California leads the nation in the production of ________ different crop and livestock commodities?

answer

82

question

The top three states, listed in order from 1-3 in agricultural production are

answer

California Iowa Nebraska

question

_____ County is California's leading agricultural county, producing over $________ billion in agricultural commodities?

answer

Fresno ?

question

List five of the top ten commodities produced in California

answer

Almonds Milk Grapes Lettuce Hay Strawberries Tomatoes Nursery products

question

The average size of a California farm is

answer

327 acres

question

The average size of a US farm is

answer

435 acres

question

California farms and ranches are predominately family owned and operated, or corporately owned and operated?

answer

family

question

There are approx. __________ farms and ranches in California

answer

77, 900

question

California exports are valued at _________ billion dollars of agricultural production

answer

$21.2

question

California produces _________ percent of the milk in the United States?

answer

10%

question

Natural Sources of Water

answer

Precipitation- rain and snow (200 million acre-feet per year) Surface Water (71 mil ac/ft. avail. per year) Ground Water

question

Central Valley Project

answer

Authorized by Congress in 1937 500 miles of canals and aqueducts Shasta Lake is major reservoir Delivers 7 million acre feet annually

question

Which water project primarily serves Sacramento and San Joaquin Valleys?

answer

Central Valley Project

question

Ag uses 90% of ______

answer

Central Valley Project water

question

Federally funded water projects

answer

- Central Valley Project - All American Canal - Coachella Canal

question

State Water Project

answer

approved by CA voters in 1960 600 miles of canals and aqueducts Oroville is major reservoir

question

Which water project primarily provides water for urban use, but is also used for ag irrigation?

answer

State water project which provides 4.1 million acre feet; but 2 million are for LA's Metropolitan Water District

question

Which water project is funded by the State

answer

State Water Project

question

When was the Colorado River Aqueduct approved?

answer

1922

question

When was the All-American Canal approved?

answer

1928

question

Colorado River Aqueduct

answer

supplies water to Metropolitan Water District of Southern California

question

All-American Canal

answer

supplies water to Coachella and Imperial Valleys (3.4 million acre feet) mostly ag use

question

Urban/Industrial Use of Water

answer

11%

question

Agriculture

answer

43%

question

Environmental

answer

46%

question

If only "developed water" is counted, ag uses approximately

answer

80%

question

U.S. agriculture

answer

represents 4.8% of U.S. GDP employees 10,000,000 people

question

U.S. spends __ of income on food consumed at home, around ___total for all food

answer

7% 13%

question

Why agribusiness unique?

answer

food is vital to survival biological, depends on nature seasonal weather uncertainity many types of businesses variety of market conditions rural areas government involvement

question

US food expenditure is low

answer

13% of income

question

Farm Share (goes back to the farmer)

answer

15.5 cents

question

Marketing share

answer

84.5 cents

question

Farm and Agribusiness 10.8 cents

answer

10.8 cents

question

Food processing

answer

22 cents

question

Packaging

answer

4 cents

question

Transportation

answer

3.5 cents

question

Retail trade

answer

12.2 cents

question

Foodservices

answer

32.2 cents

question

Three primary segments of the food system

answer

food sector production agriculture sector input supply sector

question

Most production comes from a small number of ___ farms

answer

giant

question

Each farmer feeds ____ people

answer

155

question

2.2 Million Farms as of

answer

2012

question

____million acres in farms in the US

answer

920

question

Input sector Three primary categories of inputs

answer

manufacturing service distribution

question

Input sector

answer

contributed to increase in productivity- but input costs have risen much faster than agricultural prices

question

Productivity

answer

output/input

question

Global manufacturing input brands....

answer

Monsanto Syngenta John Deere Cargill

question

Services

answer

Financing - Farm debt is nearly $250 billion - Farm Credit Services is major ag credit provider Farm management services Grading and Inspection Consulting

question

Distribution

answer

ways of getting manufactured inputs to farms/ranches - cooperatives - Dealer networks for farm equipment, etc - Seed and fertilizer representative that visit farms Lots of logistics/supply chain management involved

question

Marketing channel

answer

- the path that raw agriculture products take from the farm to the final consumer

question

What steps does the marketing channel include?

answer

transportation packing/cooling sales at various levels of marketing channel Food processing Wholesale Retail Food Service

question

Transportation

answer

Ag is a major user of US transportation system Measured in ton-miles (weight x number of miles)

question

Ag commodities used

answer

13% of ton miles in 2007

question

Processed food to retailers used

answer

8% of total (transportation)

question

Which type of transportation is the lowest cost?

answer

Barge .72 cents

question

Most common type of transportation by ton-miles

answer

trucking

question

Packing/Cooling

answer

-first stop after fresh produce is harvested -sorted, graded -quality control -packed -refridgerated -shipped

question

Food processing

answer

take raw agricultural products and change their form for a wide variety of uses typically adds shelf life to the product 25, 616 food processing plants in the US meat processing adds most value

question

14% of US manufacturing Employees

answer

food processing

question

Food retailing

answer

Supermarket -15,000 items -10-25,000 square ft Superstore - 25,000 items - 40,000 sq. ft Warehouse club -membership based - 6,000- 12,000 products Ex. Costco, Sam's club SuperCenter (Walmart, Target) - 17,000 sq. ft

question

Top 4 Grocery Retailers

answer

Walmart Kroger Albertson's Pulix Supermarkets

question

Food Service comprises the

answer

largest portion of the food marketing bill (think dollar bill diagram)

question

Institutional Food Service

answer

Hotels, universities, airlines, hospitals, etc - 38,000 firms - $128 billion in annual sales

question

Food Wholesaling categories

answer

Merchant wholesalers Manufacturer's sales offices and branches Wholesale Agent/Broker

question

Merchant wholesalers

answer

70% of total Buy groceries from processors/manufacturers, re-selll to retailers or institutions for a profit Take title to goods (ownership) before re-selling

question

Manufacturer's sales offices and branches

answer

Wholesale businesses run by large food manufacturers and processors

question

Wholesale Agent/Broker

answer

Buy/Sell on commission, do NOT take title to the goods

question

Linkages in the food sector

answer

vertical integration -own more than one segment of the food sector Ex. Dole, Foster Farms, Wineries

question

Top Export Countries for California Ag Products

answer

1. Canada 2. EU 3. China/Hong Kong 4. Japan 5. Mexico

question

Benefits of International Trade

answer

increased exports and sales extend the product life diversify across markets, reduce risk global brand recognition access to lower cost raw materials

question

Opportunity cost

answer

the lost value of using your resources for the next best alternative: what you give up to do what you're doing

question

Utils

answer

non-monetary measurement of satisfaction or utility

question

Marginal utility

answer

the additional satisfaction gained from consuming one additional unit of a product

question

Total utility

answer

the total level of satisfaction gained from consuming a particular amount of a product

question

Law of Diminishing Marginal Utility

answer

Marginal utility declines as more of a good or service is consumed during a specified period of time

question

Demand

answer

the amount that consumers are willing and able to buy in the market at various prices

question

Law of Demand

answer

as price increases, consumers will purchase less of a product: inverse relationship between price and quantity demanded

question

Change in Quantity Demanded

answer

movement up or down the same demand curve caused by a change in 1. price 2. supply

question

Factors Influencing Consumer Demand

answer

1. Income 2. Taste and preferences 3. Expectations of future price changes 4. Number of buyers 5. Price of substitutes or complements

question

Supply

answer

the quantities that producers are willing and able to put on the market at different prices Direct relationship between price and quantity

question

Law of Supply

answer

As price increases quantity supplied increases and vice versa

question

Change in Quantity Supplied

answer

Movement along Supply Curve - caused by a price change

question

Factors that Change Supply

answer

Change in technology Change in the price of inputs Weather/Disease Change in the price of other products that can be produced Subsidies/Government involvement Number of Suppliers

question

Prices increase if

answer

Supply decreases Demand increases

question

Prices decrease if

answer

Supply increases Demand decreases

question

Demand Price Elasticity

answer

-measures consumer response to price change -reflects the percentage change in quantity demanded when the price changes by 1% - Shows how well the Law of Demand works for a particular good

question

Price Elasticity

answer

Ep= % change in quantity r/% change in price

question

Products have Elastic Demand if:

answer

There are many substitutes for product It is a luxury good A large portion of your budget is spent on it

question

Products has Inelastic Demand if:

answer

It is a: - necessity - accounts for a small part of your budget - there are no substitutes - has addictive qualities

question

Income Elasticity

answer

measures consumer response to a change in disposable income- change in demand for goods with each 1% change in income

question

Disposable income

answer

the personal income left after paying taxes

question

Income elasticty

answer

% of sales/ % of income

question

Engel's law

answer

When incomes of consumers increase, the proportion of income spent for food decreases, ceteris paribus

question

Normal Goods

answer

Goods for which consumption rises when income increases, and vice versa up to a point Includes vegetables, most meats, many fruits and dairy products

question

Inferior Goods

answer

Goods for which consumption falls when income increases Includes beans, flour, rice, top ramen etc.

question

Luxury Goods

answer

goods for which consumption increases at a higher proportion than income increases Includes; seafood, eating at restaurants, fruit juices

question

Supply Elasticity

answer

% change in quantity supplied per 1% change in output price Supply tends to be inelastic in the short run (one season) Supply tends to be elastic in long run (two or more seasons) Producers cannot immediately change production to respond to price changes

question

Inelastic demand:

answer

between 0 and 1 (absolute value) * the closer to zero the more inelastic

question

Elastic demand:

answer

;1

question

Income elasticity

answer

Inferior Normal Luxury

question

Luxury

answer

Greater than 1

question

Inferior

answer

Negative value

question

Normal

answer

positive, but ;1

question

Perfect Competition

answer

Many producers Homogenous No barriers to entry No one producer can affect the market Price takers- price is dictated by supply and demand in the market Ex. apples, citrus, beef

question

Monopolistic Competition

answer

Many producers (but fewer than perfect competition) Differentiated or brand name product Advertising Few barriers to entry Some influence on price Ex. organic products, GMO apples, wine

question

Oligopoly

answer

Few producers Huge Companies Advertising is very important Price fixing is illegal but companies have great influence on their prices Ex. Pepsi, Coke, Cheetos, Fast Food, Cereal

question

Monopoly

answer

1 producer Barriers to entry (gov. or capital) Heavily regulated Price makers

question

Marketing orderss

answer

for all producers in the industry, controls quality and quantity supplied to the market - self-regulation, passed by growers

question

Marketing Agreements

answer

Voluntary, producers work together to agree to increase advertising, product quality Ex. California Leafy Greens

question

Marketing orders were authorized by

answer

the Agricultural Marketing Act of 1937

question

Both Federal and State marketing orders/research

answer

and promotion programs

question

Currently there are ___ active federal marketing orders and ______ California state marketing orders

answer

30 53

question

What a Marketing Order Can Do

answer

Establish grade and size standards Establish pack and container standards Enforce standards, hire industry inspection and certification Fund research, usually through a university Generic advertising "got milk" "It's the cheese" Establish how marketing order is funded- producers per unit sold Establish how marketing order is funded- producers pay per unit sold Control quantity sold on the market- both domestic and export markets Require imported products to adhere to same quality guidelines as domestic products

question

Research and Promotion

answer

Assess fees on producers to fund marketing research, export promotion and generic adversiting "Beef, It's What's for Dinner" Pork, the Other White Meat"

question

Beef and Pork programs were legislated by 1985

answer

farm bill

question

1996

answer

farm bill allowed any commodity group to request and R&P Program, following a similar process to a marketing order

question

5 Primary Types of Legal Structure

answer

Cooperatives Sole Proprietorship Partnership Corporation LLC

question

For-Profit Business Ownership Structures

answer

Sole Proprietorship Partnership Limited Liability Company Corporation

question

sole proprietorship

answer

an individual who owns, manages, and assumes all the risk and derives all the profits from a business

question

sole proprietorship advantages

answer

easiest to create/start oldest most popular business legal structure all profits and taxes paid Owner - all decisions and control - business decisions are private

question

sole proprietorship disadvantage

answer

owner charged all losses (debts and liability) personal and business assets available business ends w/death difficult to pass to heirs limited captial depends heavily on one person

question

partnerhsip

answer

advantages - more capital resources - no business tax, partners pay income tax - business dealings are private disadvantages - unlimited liability for each partner - lack of continuity and stability - good legal assistance is necessary

question

three types of partnerships

answer

general limited registered limited liability

question

general limited registered limited liability

answer

a legal entity that is separate and distinct from shareholders who own it, from the individuals who manage it, and its employees, that is created by state law and organized to carry on a business for profit or non-profit

question

corporation types

answer

business- c- corporation closed- private (or closely held); also called s-corporations

question

advantages corporate structure

answer

liability limited to firm assets same individual legal rights operate perpetuity, easier to change ownership lower tax rates generally tax-deductible employee benefits Easier to raise capital

question

corporate structure disadvantages

answer

more difficult to create more difficult to dissolve more reporting of activities required, lacks secrecy double taxation: business is taxed and owners pay income tax higher organizational costs

question

limited liability company

answer

advantages - separate legal entity - very flexible - liability protection - moderate cost to establish - easy to transfer ownership - can choose how to be ____ disadvantages - newer type of business arrangement - banks may not be so willing to lend - more difficult to anticipate problems

question

cooperatives

answer

a business owned by its users to provide a specific service at cost owned by its users: Farmers are the owner/users specific service: co-ops are not one stop shops, many farmers use several co-ops at cost: co-ops don't make profits on its members Have been allowed since 1922 - Capper Volstead Act; exempts agricultural co-ops from anti-trust laws, w/in certain guidelines

question

How are cooperatives organized

answer

owned and controlled by the people who use their services voting: each member has at least one vote; some base voting on level of business members elect a board of directors, all must come from active members board of directors hires general manager to run daily operations

question

Benefits of Cooperatives:

answer

Give farmers the chance to vertically integrate: can help control another level of the marketing channel lower costs of production and marketing Can help gain higher prices for products Works with marketing orders to carry out regulations on dairy and certain fruit and vegetable marketing efforts

question

Types of Cooperatives

answer

Marketing Cooperative Bargaining Supply Service

question

Marketing Cooperative

answer

Provide the following services to farmers: - Guranatee place to sell their product -Comand a slightly higher price - Allows farmers to brand-name their product Ex. Sunkist, Ocean Spray, Calavo, Blue Diamond Also help eliminate price risk by Pooling

question

Importance of Marketing Coops

answer

In the U.S. 25% of all agricultural products are sold through coops. In California, 40% of all agricultural products are sold through coops

question

Supply Coops

answer

provide inputs to farmers at lower costs Most common inputs purchased: fuel feed fertilizer chemical/seeds

question

How do Supply Coops make money

answer

Non-members and members both pay retail prices Members get a refund at the end of the year Non-members- the Cooperative keeps those profits, and can either reinvest or give the profits back to the members

question

Pooling

answer

put all growers with product of a particular grade together, and pay them the average sale price for that period

question

Bargaining Cooperatives

answer

Negotiate price w/processors- do not market or process the product themselves Increases the small farmer's bargaining power Groups together farmers to gain bargaining power and price premiums for grade quality low overhead manager, several field staff

question

Supply Coops aren't as important in CA

answer

25% inputs in US 5% in CA

question

Service Coops

answer

offer one very specific service- usually started as a result of rural areas being undeserved Ex. electricity in Midwest rural phone service cotton gins Farm Credit System

question

Fixed costs

answer

do not change with production levels, also called overhead costs

question

variable costs

answer

change with production levels, increase and decrease with output

question

quasi-fixed costs

answer

fixed at some level, then change with production

question

Fixed Costs

answer

D- Depreciation I- Insurance R- Repairs T- Taxes I- Interest

question

Variable Costs

answer

Raw materials or inputs Inventory Levels (Cost of Goods Sold) Labor if it's hourly

question

Total costs

answer

Fixed costs+variable costs

question

Total revenue

answer

quantity sold x price how to accomplish profits increase total revenue decrease total costs

question

5 c's of credit

answer

1. Collateral 2. Capital 3. Capactity 4. Character 5. Conditions

question

Collateral and Capital

answer

Found in a Balance Sheet (a snapshot of who owns what in a business) Shows Net Worth- things that you own/have

question

Net Worth

answer

total assets- total liabilities

question

total assests

answer

all that you own, including bank balances, stocks, etc

question

total liability

answer

anything a business owes - both long and short term

question

net worth

answer

what is yours after debts are accounted for

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