Value-added Agriculture

Student Name: ______________

What is – Value-Added Agriculture?

Adding Value:

BUT – Don’t Raw Commodities already have value?!

Many raw commodities have value in their _______________ ___________________ They are raised by an agricultural producer; then

sold by that producer for further processing

____________, _________, ___________, _____________, ____________ all HAVE value.

They are ____________ ______________

Could producers get MORE $$$ for their products if they –

•1.

•2.

•3.

www.acclaimimages.com

It’s important to identify value-added activities that support investment in _____________, ________________________, & ___________

Additional opportunities for adding value include: 1.

2.

3.

1.

2.

3.

For ALL of the Capturing vs. Creating Value Slides (there are 10 of them)– take a few minutes and draw a quick picture in the blank boxes located next to the definitions.

Make sure the picture represents the definition to YOU – the Learner!

www.cs.miami.edu

Adding value to products can be accomplished in a number of different ways, but generally falls into one of two main types:

Creating Value

Innovation

Industrial Innovation

Capturing Value

Coordination

Creating Value: _____________________________

___________________________________________

Innovative new products

Enhance a product’s characteristics

Enhance services

Create brand names

Develop unique customer experiences

Creating Value through - Innovation: Improving existing processes, procedures, products and services or creating new ones

Market unique or branded products

Produce identity-preserved or specialty crops

Combine family activities or recreation associated with direct on-farm marketing

Creating Value through - Industrial Innovation: Processing traditional crops into nonfood end uses

Ethanol from corn

Biodiesel from soybeans

Particleboard from straw

Capturing Value: ________________________

_______________________________________

Meant to ‘capture’ more of the consumer dollar through:

1.

2.

3.

4.

Direct Marketing Selling products directly to

the consumer

Selling beef animals ‘on the hoof’

Selling homemade soaps & lotions to the general public

Think – eBay!

Think - Tyson Chicken:

http://images.google.com/images?svnum=10&hl=en&gbv=2&client=firefox-a&channel=s&rls=org.mozilla%3Aen-US%3Aofficial&q=Tyson+Chicken&btnG=Search+Images

Vertical Integration –

Producer Alliances: Individuals / companies from the same level of the food chain consolidate in order to produce and market a superior product

Cooperative Efforts: Individuals or companies pool their products in order to increase bargaining power.

Minimizing Costs: 1.

2.

3.

Adding value often requires a _______________ __ ________________

These techniques provide producers with a _________ __________ in the marketplace

There are _____ strategies for adding value

6 Key Strategies for Adding Value 1.

2.

3.

4.

5.

6.

Changing the physical state / form of products

1.

2.

3.

Producing products in ways that enhance value

1.

2.

3.

Differentiating agricultural products in order to enhance their value

1.

2.

3.

Bundling Products

1.

2.

Producing and marketing commodities that improve operating efficiency up the supply chain

1.

Owning assets somewhere up the supply chain for further processing

1.

2.

3.

Producers use one (or more) of these six strategies:

1.2.3.

BOTTOM LINE:

______________________________________

Producers used to have a ‘produce-then-sell’ mentality 1.

2.

3.

TODAY’s Agriculture includes:

1.

2.

Agriculture is moving towards a _____ _______The international market for value-added

products is _________ Consumers have increasing _______, ________ &

________________ needs

Food processors want to improve ____________.

Technology enables producers to produce what ____________ ___________!

Producers who add value will become more than commodity producers – 1.

2.

3.

They will be producing _________________ ________________: (steaks, hamburgers, bread etc.)

How much value can be added? 1. 2. 3. 4. 5. 6. 7. 8.

Adding Value to Products – The Basic “How-to List” Gather intelligent market information on _________

& _____________________. Make sure an opportunity exists!

Start with a ________ ______________ Add a healthy dose of _________ to create a

product desired by ______________ Make sure you have a valuable edge on the

____________

Adding Value to Products – The Basic “How-to List” cont. Opportunities come in many ________ & _______. You must do your _________! Research is required Be _________ and _________to succeed! You are no longer a commodity producer – you are

____________________, ______________ & _______________________ food products

Follow these basic steps: 1. 2. 3. 4. 5. 6. 7. 8. 9