Rhodes, V. James, Jan L. Dauve, and Joseph L. Parcell. The Agricultural Marketing System--Sixth Edition.

Rhodes, V. James, Jan L. Dauve, and Joseph L. Parcell. The Agricultural Marketing System--Sixth Edition, Holcomb Hathaway Publishers: Scottsdale, Arizona, 2007, 372 pp., $53.95.

One of the major strengths of agricultural economics and agribusiness management programs is the requirement of a solid grounding in microeconomics. Students who understand basic economic principles such as supply and demand, marginal analysis, how markets operate, and the benefits of specialization and trade have a distinct advantage in grasping the fundamental business skills such as finance, production, and marketing. The new sixth edition of this book by Rhodes, Dauve, and Parcell is an excellent way to ensure that this critical connection between economics and marketing is formed.

This text has endured for six editions because of its unwavering focus on that objective. As they state in the preface: "The focus of this text has always been, and remains, on training future managers, decision makers, and opinion leaders as to the economic drivers of the agricultural value chain" (p. xi). As generic business programs give way to "domain based programs" such as agribusiness, others are learning the importance of fully understanding the industry in which they operate. We have known for years that our strength comes from our appreciation of the biological and perishable nature of the agricultural commodities and food products that we sell. Agricultural economics and agribusiness were global before global was more than an afterthought in most other business curriculums. Many of our special institutions such as futures and options markets are gaining greater acceptance in business school curriculums. All of these issues are addressed in this text.

The material is offered using a behavioral systems approach "that focuses on the interdependence and coordination of all the participants and all the functions in the entire system. It focuses on the flow of products as it is facilitated by a flow of market intelligence and on those firms and institutions where major decisions are made and where market leadership is exercised. Such an approach examines market power in the system and the leadership roles exercised by large or innovative firms. It shows how differing market structures require different types of production and marketing decisions.... In the 1990s the behavioral systems approach spawned contract production and marketing to enhance control of value, risk, and decision rights (functional and institutional elements). For example, a hog processor might offer a marketing contract to a would-be supplier in order to control quality (functional) to meet a special retailer need (institutional)" (p. 10).

These topics are presented from the perspective of an agribusiness manager and shows "marketing problems as problems facing managers, whether he or she is a farmer, an assembler, a processor, or a retailer" (pp. 10-11).

The book is organized in two parts. Part I (Marketing, Market Competition, and Consumer Markets) deals with applying microeconomic analysis to marketing issues. These include a discussion of how the different market situations--perfect competition, oligopoly, and monopolistic competition--affect how firms operate and market their products. A chapter is devoted to price determination, how markets clear, and how to use price as feedback to guide future production decisions. Separate chapters deal with an economic analysis of consumer purchasing decisions, and agricultural trade.

Part II (The Marketing System) takes a broader perspective on marketing by examining subjects that transcend a single firm. These topics include different pricing and exchange systems with emphasis on price discovery and price setting systems, contractual exchange arrangements, and the impact of vertical integration on the whole process. A chapter covers contractual arrangements that include trading by description and quality and how grading affects this process. Details of the grading of selected commodities such as grains, cattle, beef, fruit/vegetables and milk/dairy are provided. Storage and transportation marketing activities are covered in a single chapter.

The final six chapters concentrate on the changing marketing environment faced by agribusiness firms. An extensive chapter is devoted to the increasingly important subject of market price risk. The authors show how hedging using futures and options provide an effective way to avoid much of this is variance. Three chapters are devoted to the development and use of market power in marketing channels. The final two chapters in this section are devoted to the role of the processors, wholesalers, and retailers who deal with differentiated products and national brands. Each topic in this section is presented from a systems perspective so that it "offers readers an understanding of how decisions at one level in the value chain impact all other levels and explores if, how, and when the system changes and evolves as a result of cumulating individual decisions" (p. xii).

Rhodes, Dauve, and Parcell bring a comprehensive look at the subject of agricultural marketing that includes discussion of contemporary issues in marketing from a mainly agricultural commodity perspective. All the topics are presented in a straightforward manner with many examples.

To assist student learning, each chapter begins with a preview of the important ideas and terms so that students will know what to look for while they are reading. A summary of the key points is also given at the end of the chapter plus a number of students questions. A small group exercise is also given so students can apply what was learned. The chapter organization leads itself to the use of active learning so there can be less reliance on straight lecture presentation. It is unclear whether the book comes with instructor support in the form of visuals and teaching manuals.

The behavioral systems approach is an effective way to address this topic. It is important for students to understand how economics can enhance a manager's ability to understand what is happening within their business and how to navigate its external business environment effectively. The authors of this text do both very well.

James G. Beierlein

Pennsylvania State University