As an example, in 1999 the largest hog producer and pork processor in the United States, Smithfield Foods Inc., announced its proposed acquisition of Murphy Family Farms, the country's second largest hog producer. Traditional agriculture refers to the production of bulk commodities, in which large quantities of undifferentiated, broadly graded products are sold in anonymous spot markets. Price, quantity, and broad quality parameters are the key types of information needed. In traditional agriculture, the different steps of the production system can operate relatively independently from one another. Value-added agriculture refers to the vertically coordinated production system that designs agricultural production to meet the needs of a specific customer market.
Specific product attributes is a key item of information.
The focus is always on the final food product rather than the initial bulk commodity. In such a system, the production steps are interdependent. The shift towards value-added agricultural products is evident in the area of U.S. export growth. As a percentage of total agricultural exports, U.S. exports of bulk commodities have declined from nearly 75 percent in the mid-1970s to roughly 40 percent in 1996. Consumer foods, on the other hand, have risen from less than 5 percent of total exports to nearly 40 percent.