An Introduction to the Food SystemBread

AG BM 102

Bakery in Serbia

A jug of wine, a loaf of bread and thou

A jug of wine, a loaf of bread and thou

The Rubaiyat of Omar Khayyam

The Story of Bread

• Very ancient product

• Important in diet

• Important in culture

• Omar Khayyam

• Bible – loaves and fishes

• Marie Antoinette – “Let them eat cake.”

Important Agents in Bread

• Farmer

• Elevator

• Miller

• Baker

• Retailer

• Trucker

Who Gets the Money?

Share of Money to Functions

• Farmer 4% - 3.4% for wheat – rest other

• Elevator – almost zero

• Miller – 2%

• Baker – 69.3%

• Retailer –18.3%

• Trucker – 4%

• Non-farm ingredients –1.9%

Marketing Defined

• The set of economic and behavioral activities involved in coordinating the various stages of economic activity from production to consumption

• In simple terms, it is what occurs to farm products from the time they leave the farm gate until they reach the consumer.

• It provides time, form, and place utility.

Stages of MarketingFood at Home

• Farmer

• Assembler

• Processor

• Wholesaler

• Retailer

• Consumer

Wheat Harvest in Kansas

Stages of MarketingFood Away from Home

• Farmer

• Assembler

• Processor

• Distributor

• Food Service

• Consumer

Terminal Grain Elevator

Functions of Marketing

• Exchange Functions

• Physical Functions

• Other Functions

Exchange Functions

1. Buying

2. Selling

Physical Functions

1. Storage

2. Transportation

3. Processing

Holsum Bread Truck

Other Functions

1. standardization

2. financing

3. market intelligence gathering

4. risk bearing

Summary

• Why is marketing important?

• It is the biggest item in food costs!

• Provides valuable services

• Everyone has an essential job

• Everyone gets paid to do it

• Does farmer get enough?