Create a 2 pages page paper that discusses agribusiness marketing. Agribusiness Marketing Sugar Recent trend The US sugar industry has wide markets in domestic as well as international markets. The government of the US had formulated several policies for the betterment of sugar industry. Some of these policies include better tariff, loans and subsidies for producers etc. The framework of the industry is constituted by small number of producers and processors. But they process it on a large scale. US also ranks among third in the world sugar consumers where India and European Union share the first two places.
US sugar industry is one of the major outperforming sugar industries in the world. The US is one of the chief importers of quota and non-quota sugar. The importing of sugar is mainly for the purpose of re-export after processing and refining. The major candy companies seem to pay low prices for the producers of sugar. But the final product supplied to the consumers is being levied a higher price.
Forecast of the future of the industry
The price of the US sugar has always shown an upward trend as compared to the other nations since 1982. US have become one of the major importers of sugar. This imported sugar is again re-exported after refining. Thus the value of quality sugar produced by US will again grab increased price in the market in future. Apart from being a part of food, sugar is also widely used for industrial purposes. The wider use of sugar for making ethanol and electricity has expanded the future market potential for the industry. Therefore, sugar companies have started adopting new and improved technology for processing and thereby preparing themselves to increase the productivity in the future. The country, with its sophisticated technological resources which are used in production, has made its sugar internationally competent due to quality and could garner more market share in the international level.
Mclane Company Inc
Mclane Company Inc is the largest logistics company in the country. “Founded in 1894 in Cameron, Texas, McLane Company has grown from a local merchant to an international distribution and logistics leader.” (When Technology and Experience Matter, 2007). The company has been very keen on the better management of the supply chain of the agribusiness. The company has a very good network of marketing channels for the timely distribution of commodities at the desired destinations. The company has set up 18 well run distribution centers in the US. They also have separate grocery distribution center for dealing with the supply transportation of the agribusiness products. This has made the timely transmission of the commodities for the farmers very easier. McLane is also opening up new distribution centers for further expansion of the distribution network. Thus a good network and supply chain management have helped them to make their operations very effective.
The producer has to be aware of the fact that corn has been very largely used by the country for making ethanol. Considering this fact the corn producers must plan to sell the harvested corn in the industrial market rather that going for the food market. Due to the demand for corn in the production of ethanol, the price of corn will rise in the present market. It is also expected to surge very well in the future. “Owing to the soaring demand for ethanol, corn prices have also jumped to an unparalleled level in US.” (Soaring Demand for Ethanol Spikes Corn Prices in US, 2007).
Future crop of the land owner in Arizona
The land in Arizona, generally, is arable for growing wheat, cotton, alfalfa and corn. Even though the land is suitable for growing these crops it is advisable to grow the one that grabs maximum returns. It is already seen that there is a great demand for corn in the US market due to its requirement for making ethanol. Cotton is also a product that has great prospect. In the last financial year where the demand for the cotton was 17 Millions of 480-lb bales the country could produce only 13 Millions of 480-lb bales. This shows that there will be a sharp rise in the demand and therefore potential for cotton is quite good. Wheat is one of the major export crops of the US. Almost 50% of the wheat produced in the country is exported. As compared to these crops the demand for alfalfa is much less.
Considering the demand of the four crops it can be seen that there is going to be good demand in the market corn and cotton. Therefore, a farmer should look at these factors and plan his agricultural production accordingly. Alfalfa can be ignored from this year’s cultivation, as large scale production in this crop wouldn’t reap much benefit to the farmer. Corn can be grown in abundance to meet the market demand due to which the prices are likely to soar. Wheat and cotton can be grown on equal scale. As mentioned earlier the supply of corn for ethanol production will yield more returns that from the food market. The corn, cotton and wheat should be grown on a 40:30:30 ratios for a farmer to effectively tap the market potential during the coming year.
When Technology and Experience Matter. McLane. 2006. 30 Oct. 2007. .
Soaring Demand for Ethanol Spikes Corn Prices in US. Environmental Expert Com. 12 Apr. 2007. 30 Oct 2007. .