The business of agribusiness - Agribusiness Management - page 14

all other sectors suggests that the impact of the food and agribusiness sector as defi ned in
Table 1. 1 is undervalued. Yet without the contribution of transportation, energy, or packag-
ing, the product would not reach the end consumer.
In the food dollar accounts, the ten industry sectors that transform agricultural commodi-
ties to food products use four main factors of production to add value. The four are salary
and benefi ts, property income, output taxes, and imports. At 50.8 cents per food dollar,
salary and benefi ts comprise half of the food dollar ( Figure 1.4 ). The 33.0 cents of property

income represents payments for machinery, equipment, structures, natural resources, prod-
uct inventory, or other assets that compensate the various owners for services provided
(Canning 2011). The remainder of the 2008 food dollar is split between the U.S. government
for taxes and imports or international assets.

The three primary sectors of the food system
The U.S. food production and marketing system, for purposes of discussion in this text, is
divided into three sectors: the food sector, the production agriculture sector, and the input
supply sector ( Figure 1.5 ).
We start with the food sector . This is the sector in which food processing, marketing, and
distribution occurs ( Figure 1.5 ). Here we have fi rms such as Kraft, Hormel, Kroger, and
McDonald's, as well as thousands of other fi rms, large and small. This group closely tracks
consumer tastes and preferences, adapting to meet changing needs.
Next in line is the production agriculture sector . Purchased inputs, natural resources,
and managerial talent are combined to produce crop and livestock products. Agribusinesses
in this sector vary in size, number, and focus—from the local grower selling strawberries to
neighbors to the 100,000 head cattle feedlot; from the rice farmer in Louisiana to the canola
grower in North Dakota; from the pork producer in North Carolina to the mega-dairy in
Arizona.

Output
taxes Imports Property income Salary and benefits

7.8¢ 8.4¢ 33.0¢ 50.8¢

Figure 1.4 Factor payments for the 2008 food marketing bill
Source: Canning 2011 .