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Agribusiness & Food Systems Defined

What is Agribusiness?

Over the years the word agribusiness has evolved in its meaning and usage. Daniel Block has long felt that the broadest use of the word more truly reflects the diversity, complexity, technological sophistication, and global scale of the agricultural economy of the 21st Century.

Webster's Dictionary defines agribusiness as "farming and the business associated with farming, as the processing of farm products, the manufacturing of farm equipment and fertilizers, etc."

Reflecting the dictionary definition, Mr. Block has included in the definition of agribusiness, "any firm whose profits are dependent on or derived from the eventual harvest of agricultural production or natural resources. An agribusiness is uniquely characterized by its on-going need to adapt to several forces including; the biological phenomena of nature, weather conditions, changing consumer preferences for foods and fiber and the global supply and demand for the products of this harvest."

Our definition of agribusiness therefore includes three major sectors — Producers, Agricultural Input firms, and Agricultural Output firms. Due to the globalization and the industrialization of agriculture many large agribusiness companies today are vertically integrated and may include all three of these sectors.

Agribusiness Producer: Farmer — Grower — Rancher / Aquaculturist — Forester — Fisher

Agribusiness includes the production sector of agriculture, traditionally referred to as the "farmer." The farmer or producer today can be an individual grower, rancher or dairy farmer, a large, fresh produce grower/packer/shipper, an aquaculture company producing seafood, a forest product company growing trees, or an ornamental plant producer.

Agribusiness Inputs

Inputs are the various resources and services producers use to produce agricultural products. Using our definition, agribusiness firms include computer software developers, financial services companies, insurance providers, accountants and attorneys, as well as the more traditional agricultural input companies such as seed, feed, fertilizer, farm equipment, irrigation, animal pharmaceuticals, livestock handling equipment, and horticultural supplies.

Agribusiness Outputs

Finally, agribusiness includes the output side of agricultural production such as the post-harvest processing of vegetables, fruit, fiber, poultry, and meats. Our definition of agribusiness output enterprises goes further to include the distributors, marketers, packagers, and retailers of agricultural food and fiber. It also includes firms involved in the post-harvest logistics of shipping and handling agricultural production such as the railroads, truckers, ocean carriers, and airlines.

All Agribusiness Sectors

In all of these agribusiness enterprises the firm's success relates in no small way to their familiarity and understanding of agricultural production and what affects the eventual harvest, handling, and distribution of agricultural production and bio- resources.

D.W. Block Associates, LLC

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