Agriculture, Forestry, Fishing & Hunting: An Overview

Introduction

The industry is that of agriculture, forestry, fishing and hunting. It comprises of several establishments that involve the growth of crops, raising animals, harvesting of timber, catching fish as well as other farms found in their natural habitats (North American Industry Classification System, 2020). In the industrial sector, the establishments are known as ranches, nurseries, greenhouses, hatcheries or dairies.

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There are two primary activities distinguished in the sector; agricultural production and its support activities. The farms and ranches are necessary for holding tasks in agricultural production. The other activities that are part of agricultural support include systems that perform tasks such as preparing farms, preparation of soils, harvesting, planting and general management.

One significant activity in the industry is that of crop production where the growth of crops is for food and fibre. Some establishments include farms, nurseries, greenhouses, whose primary engagement is growing plants, crops and seeds. The process of production involves activities such as labour, use of capital, specialization in the input, crop rotation and physiological characteristics (North American Industry Classification System, 2020). The process comes to an end when the commodity grows to reach the point for market sale.

Animal production and aquaculture perform the tasks of raising or fattening cattle necessary for the sale and other times inclusion of animal products. There are ranches and farms that engage in grazing and breeding the animals (North American Industry Classification System, 2020). Such animals are kept because they are necessary for the products they produce and eventual sale. In timber production, there is a need for suitable lands for the trees to mature so that harvesting is done.

Market Structure and Market Characteristics

The industry of agriculture, forestry, fishing and hunting is necessary for the livelihoods of most individuals as they are a means to living. The agricultural markets are said to be perfectly competitive, which means that crops are homogeneous products produced by many sellers, and the buyers are well-informed of the prices (Van der Ploeg, 2019). There is a large number of sellers that creates a situation such that one firm does not have the power to influence the total supply.

For the industry, one characteristic is such that the intersection of demand and supply is necessary to determine the market price. The presence of many sellers does not allow a single individual to effect the changes to the price levels. Some of the crops, such as wheat and soybeans, get marketed by agricultural brokers.

The marketing of livestock is different, that includes contracts in cases where the farmers have large-scale livestock. For the case of larger animals such as beef cattle, they are sold at auctions. Such instances of auctions get advertised before time and contain vital information of the farmer's reputation, statistics and the lineage of the product.

Microeconomic Relationships, Market Outcomes, Trends in the Industry

At the microeconomic level, the issues related to the agriculture, forestry, fishing and hunting industry include those of resource use during production, processing and also distribution. Economists determine the demand for resources by businesses and compare it to the response in terms of supply during production (Van der Ploeg, 2019). In terms of the market economy, the focus is on the flow of food through channels in the market up to the final destination, and prices get determined at each stage.

Concerning the financial sector, economists focus on issues of financing of the business as well as the supply of capital to the establishments. The relation with the resource economy is that individuals focus on the use and preservation of resources (Van der Ploeg, 2019). There are also other relationships that involve the Government such that there are programs built for specific commodities necessary to support the income of farmers and provide reasonably priced products to consumers with low-income.

The current trend in the market in the U.S. is that of a mixed economic system such that there are markets that are free to determine prices while there are others where regulations are applied. Generally, agricultural economists take into account the way agricultural business affect the economy and whether there are opportunities to grow.

How the Government might impact the Industry's Market Prices, Output and Structure

The Government intervenes the agriculture, forestry, fishing and hunting industry by having price controls, regulations and other enforcements. The Government influences factors such as what a farmer grows, the location of farms, transportation and processing of products, trading of commodities and the price the farmer is to receive (Van der Ploeg, 2019). There are programs designed by the Government to implement policies relating to the handling of all the industry's output. The Government authorizes programs for food and nutrition, trading, farm credits, conservation and market support.

At the state level, the Government impacts the industry's structure by providing services for food safety and inspection, protection of the environment and also conserving soil. At the local level, the Government promotes agricultural education. They also perform other tasks such as approving laws related to the markets and food assistance. Policies instituted by the Government need to balance the costs as well as the benefits for the farmers, consumers and other competing interests.

References

North American Industry Classification System, NAICS (2020). Agriculture, Forestry, Fishing and Hunting. United States Census Bureau. https://www.census.gov/cgi-bin/sssd/naics/naicsrch?chart_code=11&search=2017%20NAICS%20Search

Van der Ploeg, J. D. (2019). Labor, markets, and agricultural production. CRC Press. https://library.wur.nl/WebQuery/wurpubs/fulltext/358315