Environnmental Analysis

Environmental Analysis

Considering the performance of an organization is a major objective for a company, each

industry has its own distinct competition as well as challenges to succeed in today's

challenging macroeconomic environment, organizations must make frequent and time-

critical shifts in corporate strategy (Siebel Systems, Inc. (Nasdaq: SEBL). The

organization I chose is called the U.S. Wheat Associates which operates in the farming

industry. In 2005/2006 The U.S alone has grown more then 57 million metric tons of

wheat, the U.S. alone used about 31 metric tons and 27.5 metric tons was exported (US

Wheat Associates). The U.S. is the global market leader in the wheat export industry.

Producers are experiencing high prices for both inputs and wheat. It costs at least twice as

much per acre to produce wheat compared to two years ago. Producers must borrow more

operating capital or invest more savings to produce a crop and if something happens to

the crop, their savings and equity disappear relatively fast.(Oklahoma State University).

The key macroeconomic variables that affect the wheat industry would be Real GDP,

Nominal GDP, consumption expenditure, the purchase of new capital goods.

As well as the net exports of goods, foreign Investment, NAFTA, Grain quality Issues

and Innovation, Food Safety, and EEP ( Export Enhancement program) and other credit

guarantees.

There is a lot of combinations of factors that result in high wheat prices, which would

be strong competition for acres within crops, in an environment where wheat is losing

Competitiveness. Production problems, which includes bad weather conditions within

many wheat growing regions including the U.S., Australia and some portions of Europe.

Problems with too much global consumption, and how it is exceeding production

capabilities within the past seven to eight years. A crucial economic problem that lies

with this export would be the weak U.S. dollar, which promotes increased exports from t

the U.S, which is the largest wheat exporter and sells about half of its wheat crop

overseas in a typical year. Wheat supplies all over the world are at its lowest level in

thirty years, with supplies in the U.S. at its lowest in sixty years. A crucial macroeconomic

factor that has affected the wheat industry would be NAFTA. U.S farmers were

promised that NAFTA would provide lasting economic success through rising exports, as

well as lower food prices for consumers, but the promised benefits never happened. Farm

income has declined