WIS029 AGRICULTURAL ECONOMICS 02/23/1990 01:25 PM D1 268 Lines Agriculture Marketing/Distribution and Retail Services Agricultural Economics (30-60 days) This unit deals with agricultural economics. Topics include career opportunities and employment information, economic background, economic principles, budgeting skills, and recordkeeping and analysis. Objectives To acquaint students with employment information and career opportunities in the farm management and agricultural economics area To develop student understanding of basic concepts and principles of agricultural economics To assist students in applying economic principles to a variety of problems in farm management To provide students with opportunities to prepare various types of budgets and statements for farm operations To provide students with a basis for evaluating farm indebtedness and borrowing in specific situations To improve student understanding of economic terminology To have students apply the principles of marginal physical product, marginal value product, and the law of diminishing returns To provide students with information of cost concepts and opportunity cost interpretation To emphasize to students the importance of budgeting to farm resources and profit potential To instruct students on how to file farm financial records To give students opportunities to explore methods of reducing price and product risks To increase student ability to estimate credit capacities and interpret loan repayments Competencies At the conclusion of this unit, students will be able to explain current employment information such as job descriptions, job availability, personal and educational requirements, working conditions, opportunity for advancement, and other factors relative to potential employment in the agricultural economic industry and relate it to their personal needs and aspirations; understand appropriate use and meaning of economic terms; examine the principles of marginal physical product, marginal value product and the law of diminishing returns; prepare "Enterprise Budget," "Partial Budget," and "Whole Farm Budget" forms; calculate the percent return for an individual enterprise and for an entire farm business; assemble a farm balance sheet and cash flow statement; and construct a loan repayment schedule. Subject Matter (Basic skills integration areas are shown in brackets following title.) Careers - Current and future employment needs - Job descriptions - Training requirements - Working conditions - Opportunities for advancement - Other factors Basic economic background - Economic term definitions - Classification and definition of farm Economic principles [Mathematics, Social Studies] - Product functions - Law of diminishing returns - Supply and demand Opportunity costs of agriculture [Mathematics] - Various opportunity costs defined - Applying the theory of opportunity costs Cost concepts [Mathematics] - Various types - Applications - Profit versus cost Budgeting principles [Mathematics] - Purpose of budgeting - Enterprise budgeting steps - Steps to budgeting for a change (partial) - Steps to budgeting for an entire farm business (complete) Farm business records [Mathematics] - Importance - Types - Analysis Risk and uncertainty - Classification - Farm product risk reducers - Price risk reducers Financing [Mathematics, Social Studies] - Sources of financial funds for the farm business - Economic reasons for borrowing funds - Economic reasons for not borrowing funds - Borrowing costs - Credit and borrowing capacity/limit - Cash flow debt repayment - Determination of economic life of leveraged assets Motivational Activities Discuss regional agricultural economics using data from a local farm or which is representative of farms in the area. Take field trips to farms to collect management information. Develop problems for students to solve using a computer. Compile farm management information from current literature. Develop farm management games for the class to play. Invite resource speakers to give presentations to the class. Take field trips to local agribusinesses. View films, videotapes, and slides about topics related to this unit. Learning Activities Participate in a Supervised Agricultural Experience program. Evaluate the crop enterprises grown on the family or a local farm. Inventory livestock, crop, and equipment on the family or a local farm. Analyze farm business records of a computer-simulated farm. Calculate loan payments on a truck loan. Compare farm net worth statements from other students' simulated farms. Instructional Materials Textbooks and References Agricultural Economics by John W. Goodwin. Reston, VA: Reston Publishing, 1982. Agricultural Economics and Agribusiness by Gail L. Cramer and Clarence W. Jensen. 4th ed. New York: John Wiley and Sons, 1985. Available from National Farm Book Company. Agriculture, Economics and Resource Management by Milton M. Snodgrass and Tim Wallace. 2nd ed. Englewood Cliffs, NJ: Prentice Hall, 1980. Available from National Farm Book Company. Doane's Farm Management Guide. 16th ed. St. Louis, MO: Doane Agricultural Service, 1985. Economics: Applications to Agriculture and Agri-business by E.P. Roy et al. Danville, IL: Interstate, 1981. Available from National Farm Book Company. Financial Planning in Agriculture by Kenneth Schneeberger and Donald D. Osburn. Danville, IL: Interstate, 1977. Available from National Farm Book Company. Bulletins and Pamphlets The following are available from the Cooperative Extension Service. Economic, Agronomic and Environmental Implications. NCR310. Economic and Social Changes on Wisconsin Family Farms. R3105. The Economics of Using Reduced Tillage for Corn on Cash Crop Farms. A3363. Futures Markets - Development and Language. A2913. Producer Marketing Management - Cross Hedging Agricultural Commodities. NCR217-12. Producer Marketing Management - Primer on Agricultural Options. NCR217-1. Producer Marketing Management - Seasonality of Cattle Prices. NCR217-10. Producer Marketing Management - Seasonality of Hog Prices. NCR217-11. Producer Marketing Management - The Minimum Price Contract - A New Marketing Alternative. NCR217-9. Producer Marketing Management - Understanding and Using Basis for Grains. NCR217-8. Rental Agreements for Farm Machinery, Equipment and Buildings. NCR214. Theory of Pricing and Storage of Field Crops with an Application to Soybeans. R3421. The following are available from Vocational Agriculture Services. Income Possibilities for Your Farm. U2043. Fundamentals of Marketing Agricultural Products. U2046. Planning a Profitable Farm Business. U2001b. Record Keeping on the Farm. U2008c. Using Farm Real Estate Loans. U2033a. Periodicals Agricultural Outlook Crops and Soils Doane's Agricultural Report Drovers Journal Farm Journal Successful Farmer Wisconsin Agriculturalist Laboratory Resources The following are available from the Ohio Agricultural Education Curriculum Materials Service. Coordinated Financial Statements for Agriculture. 804X. 2nd ed. Century Communications, 1984. Set of Financial Statements. 805X. 1980. You and Your Balance Sheet. 806X. 1985. Films, Videotapes, and Slides The following is available from the Bureau of Audio Visual Instruction. Farm Records: The Net Worth Statement. 11342 (VHS videotape, color, 35 minutes). University of Wisconsin, Department of Agricultural Journalism, 1984. The following is available from Doane Agricultural Service, Inc. Increasing Earnings through Farm Records. 353A (Filmstrip). The following is available from the Grange Farm Film Foundation. In the Pursuit of Excellence - Agricultural Excellence. (16mm film, color, 13 minutes.) The following is available from the United States Department of Agriculture. Agricultural Outlook Charts. A-55 (Slide set). Equipment and Facilities Computers/printer