Agribusiness Commodity Systems
Agribusiness Commodity Systems
Agribusiness Commodity Systems
AGRIBUSINESS
COMMODITY SYSTEMS
WENDELL L. ULTRA, L. Agr.
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
PROCESSING SECTOR
• The Agribusiness Processing
Subsystem
oThe transformative activity in the
agribusiness system
oProvides competitive advantage to
the raw and undifferentiated
agricultural product
oThe agro industrial sector of
agribusiness
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Characteristics of Agricultural
Raw Materials
•Seasonality
•Variability
•Perishability
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Importance of Agro-industries
• Agricultural products increase value through agro-
industries. This sector therefore maximize the use of
agricultural raw materials.
• Agro-industries strengthen the agricultural base of the
country which consequently improves the industrial
base. The development of industrial sector relies
heavily on the developed production and agro
industrial sectors.
• In the Philippines, processed products accounts for a
larger percentage of exports as compared to fresh
one. Of the country's top 25 agricultural exports, 20
are processed products.
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Importance of Agro-industries
• Agroindustry's have been contributing more
than 50% to the total manufacturing sector's
gross value added.
• Play an important role in economic
development through increased employment
• Add storability, palatability, transportability and
nutritive value through different levels of
transformation
• Pave the way for activating "sideway linkages" -
linkages derived from the use of by-product
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Upstream
Sorting / Grading
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Downstream
Canning facility
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Food industries
Non-food industries
2. Plant Location
•It has implications on:
oQuality of the raw materials received
oProducts sold to the market
oCosts involved in moving the RM and
the finished products.
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
3. Inventory Management
• Seasonality of raw materials
• Minimize imbalance between supply and capacity
o Less storage capacity for perishable materials but more
processing capacity
• Proper and adequate physical facilities
o Storage for finished good, supplies and equipment parts.
• Agro-industrial raw materials are characterized by
seasonality, perishability, and variability
• Inventory management – dependent on availability
and timing of raw material supply
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Examples:
• Storage capacity of raw materials and storage cost
• Capacity of other physical facilities like refrigerators
• Storage capacity of warehouse of finished products
• Shelf life of raw materials and finished products
Purposes/Benefits of Packaging
•Protect
•Perform
•Inform
•Safety in delivery and transport
•Consumer choice
•Tailored portion sizes
•Convenience
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
1. Chemical
Caused by contact of the food with air, light, heat and
containing gases.
May be manifested in the product as browning due to
the reactions between protein and sugar, rancidity due
to the fat oxidation when excess fat or oil is released
by the food, or other chemical reactions, which may
lead to off-flavors or off odors.
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
C. Packaging to Inform
Is best shown by the use of property – make labels
that serve as source of information needed by the
consumer.
A food label includes any tag, brand, mark, pictorial,
or clear descriptive matter, written, printed, marked,
embossed or impressed, or attached to a container
of food.
Labelling means any written, printed or graphic
matter (1) upon any article or any of the containers
or wrapper or (2) accompanying the packed food
(BFAD AO No. 22. Bs. 1984)
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Packaging in Agribusiness
• Packaging – the totality of products,
services and systems used to prepare goods
for preservation, transport, distribution,
retailing and consumption. (Philexport)
Issues in packaging
• High-cost of packaging materials due to high-tariff
rates.
• Local packaging materials are too limited and do
not meet export market requirements.
• Cost is the related factors.
Solution:
• EO 264 – tariff reduction on non-agricultural products
including packaging materials and inputs thereof (issued
July 1995)
• Tariff reduction is 50% (18% to 9%)
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Product name
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Net contents
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Growth Areas
Aseptic (sterilized) packaging for fruit juices, drinks
and food
Conveniences and tamper-evident packaging
Modified and controlled packaging particularly for
fruits and vegetables
Microwavable, dual-ovenables
Single serve or unit quantity packaging or one-use
size (OUS)
Venturing of glass into new product application –
light weighing and improves surface decorations
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Packaging Potential
• Growth of the food industry means growth of
packaging
• FFV offers a lot of potentials to the packaging
industry because if their high perishability
• Potentials in packaging technology
development
• Potentials in packaging products
manufacturing
• Many potentials in returnable packaging
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
e. By-Products
• Economic opportunities that can be derived from
wastes, protect environment
• Processors must be able to identify potential by-
products and their commercial value.
• e.g. molasses and ethyl alcohol as by-products of
sugar milling operations
• Example: sugarcane (30% residues)
o Fuel for furnaces
o Molasses – monosodium glutamate, alcohol
o Mud – manure treatment (high phosphorus content)
Market-linkaging activities must also include by-
products marketing
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Problems
• Lack raw materials which meet quality specification
due to inefficient agricultural production and
marketing
• Low level of technology: Technological disadvantage
of small processing firms.
• Lack of quality standards
• Lack of research and development at factory level
• Market related problems such as competitive
market/low access to large markets (presence of
many substitute processed products resulting to
increased competition – especially in food
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Problems (cont.)
• Inconsistency in product qualities due to poor
practices
• Lack of cooperative efforts among small-
scale processors to advance interests
• High cost of processing
• Inability to meet food safety regulations and
packaging requirements
• Poor access to financing institutions
• Inadequate management skills
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Solutions to Problems
•Government interventions
oTrainings
oTax incentives
oResearches provided to MSMEs
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Trends
• Filipino’s consumption of packaged foods
was encouraged through promotion.
• There is increasing demand for variety of
products which offer new flavors,
convenience and health benefits.
• Increasing income of the consumers is a
driver in the development of impulse and
indulgence products to satisfy consumers
craving for something new and different,
• Nestlé is number one in packaged products
Actualizing vision |
NORTHWEST SAMAR STATE UNIVERSITY Harnessing potentials | Improving lives
Trends
• Nestlé uses health positioning through
different products emphasizing wellness