Chapter 1 - Farm Management Now and in the Future

Question 1

In the Future

Answer 1

• Technology will provide new inputs
• More specialized products will be possible
• Competition with nonagricultural business for use of land, labor and
  capital will increase.

Question 2

Number of farms…

Answer 2

Decreasing (2,000)

Question 3

Average Farm Size…

Answer 3

Increasing ($180,000)

Question 4

Why are farms changing?

Answer 4

• Labor-saving technology
• Greater off-farm employment
• Desire for higher income
• High fixed costs in technology

Question 5

Alternative Business strategies for Farmers and Ranchers

Answer 5

• Part-time farmers and ranchers
• Specialty product and service (olives, grapes)
• Low-volume, high value
• High-volume, low value

Question 6

Big Data

Answer 6

• Ability to capture massive volumes of information

Question 7

Controlling Assets Fut.

Answer 7

• Need for outside capital
• Urban and rural financial markets will move closer together
• Increased need for documentation
• Increase in renting/leasing assets

Question 8

Human Resources Fut.

Answer 8

• Increased dependence on teams of employees or partners with division of labor
• Increased use of consultants and paid advisors

Question 9

Producing to Meet Consumer Demands Fut.

Answer 9

• More specialized and processed food
• Buyers are implementing stricter product standards
• More agricultural products will go to industrial uses.

Question 10

Contracting and Vertical Integration Fut.

Answer 10

• Some producers will specialize in a phase of production.

- Marketing contracts provide assured market for intermediate products.

Question 11

Environmental and Health Concerns Fut.

Answer 11

• Concerns about food safety and environmental preservation are high
  priority
• Increased rural population means more contact between farm and nonfarm residents, increased concern about animal waste, air and water quality
• Environmental audits are becoming routine in farm sales

Question 12

Globalization Fut.

Answer 12

• Expansion of markets can occur through international trade
• governments have tried to protect their own farmers from foreign competition using trade barriers
• World Trade Organization (WTO) is dedicated to negotiating free trade

Question 13

Effects of Globalization

Answer 13

• Specialization in products that have a comparative advantage
• Globalization can affect consumer tastes and preferences
• Producers around the world increasingly compete for same resources