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section 1 notes Material Type: Notes; Professor: Gasser; Class: Agribusiness Management; Subject: Agricultural Science; University: Southern Utah University; Term: Spring Semester 2011;
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Agra business mgnt Structure of farms and ranches Number of operations decreasing Total land use relatively constant Average production per farm is increasing Why are operations larger? Economies of scale Expensive new technology and training time Expensive labor due to non-farm employment opportunities Labor-saving technology increases production potential per person Desire for greater income and standards Alternative to expanding Strategic alliances and partnerships High volume low margin producers Expand production of familiar products Generic commodities Thin profit margin Low volume, high value producers Alternative products Promotion and marketing are critical Speciality product and service providers Specialize in specific skills Maximize use of technology Marketing of services and interaction with customers are important Part-time operators “lifestyle” operations Supplement to non-farm income
New technology Precision equipment Herbicide resistant crops Information Better collection tools Easier Controlling assets Human resources Dealing with people Communication Consumer demands Integration and coordination Environmental health Globalization 1/19/ Management VS Labor Management making decisions Strategic Overall long-term strategy Strategic mgnt
Calculating taxable income flexibility Accruel accounting Transactions recorded when produced or services provided Inventories and accounts receivable are recorded as revenue Accounts payable are recorded as expenses Advantages More accurate Disadvantages More time and knowledge required to track it 1/26/ Cash Seed, chemical, fuel, expense $ Accrual Fertilizer expense $ Seed chemical fuel expense $ Fuel expense $ Grain revenue $ 1/28/ Value of assets Be conservative and consistent Market Value Current net market price Cost Original purchase cost Not for items produced Lower of market or cost Avaoids overly high value Farm production cost Accumulated costs of production Requires good cost of production records Cost less accumulated depreciation Only for depreciable assets Current “book Value” Depreciation Decreases in value of asset Business expense Distributes cost over life of asset Depreciable assets Greater than 1 year of useful life Determinable useful life Used in a business Cost Total price paid for asset Useful life Years of use in the business Salvage value Expected market value at end of useful life Can be zero if used until worn out Book value
Income tax Depreciation