Agricultural Chemical Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 755 agricultural chemical manufacturers in the US produce fertilizers, pesticides, and repellents, herbicides, and fungicides, soil amendments, plant growth regulants, and seed treatments. Customers include chemical distributors, farms and ranches, seed producers, nurseries and greenhouses, farm support services, pest control firms, veterinary practices, landscaping firms, golf courses, home improvement and garden stores, and consumer retail.

Seasonal Demand Dependent on Weather

Demand for agricultural chemicals is tied to weather conditions and the seasonality of farming.

Chemical Regulation and Liability

Agricultural chemical manufacturing is highly regulated to protect workers, the environment, and product users.

Industry size & Structure

The typical agricultural chemical manufacturer operates from a single location, employs 44 workers and generates $64 million annually.

    • The agricultural chemical manufacturing industry consists of about 755 companies that employ 36,900 workers and generate $48.3 billion annually.
    • The industry is concentrated with the 8 largest fertilizer companies representing 60% of segment revenue and 8 largest pesticide companies generating 71%.
    • Large companies include Syngenta AG, FMC, Adama, Drexel, Nufarm, Valent, and Corteva Agriscience (former agricultural chemicals division of DowDuPont), as well as agriculture divisions of diversified chemical manufacturing companies such as Monsanto (Bayer) and BASF. Large firms may have domestic and foreign operations.
                                    Industry Forecast
                                    Agricultural Chemical Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jan 18, 2024 - Falling Prices, Rising Wages
                                    • The producer price index for manufacturers of agricultural chemicals, which measures prices before reaching farmers, sank nearly 20% in December compared to a year ago but has bounced back from a more than two-year low in September. Seasonally-adjusted shipments and inventories of agricultural chemicals both declined in September year over year. Employment by agricultural chemical manufacturers ticked up in November year over year while average wages at chemical manufacturers rose in December, finishing 2023 up about 6.7%.
                                    • Global fertilizer usage is expected to climb this year and last after falling in 2021 and 2022 when the high price of nutrients affected affordability, Progressive Farmer reported in December. Fertilizer prices moved lower in 2023 as supply returned to the market and nutrients became more affordable. Global fertilizer usage is projected to increase 3% in 2023 after declining 7% in 2022. Dutch multinational banking and financial services company Rabobank is projecting an increase of nearly 5% in 2024 as lower fertilizer prices prompt the world's farmers to increase purchases. Rabobank estimates 2024 global nitrogen fertilizer consumption at 108 million metric tons (mmt). Nitrogen fertilizer production is estimated at 109 mmt. Global consumption is expected to rise through 2030, but at a modest 1.42% compounded annual growth rate from 2021 to 2030, per Rabobank.
                                    • The US Gulf Coast has become a magnet for fertilizer companies looking to produce climate-friendly blue ammonia thanks to generous subsidies in the Inflation Reduction Act and its existing export structure, Reuters reports. So-called blue ammonia is a low-emissions compound consisting of hydrogen and nitrogen to make fertilizer. Facilities under construction include a 1.1 million metric ton per year plant at Beaumont, Texas built by Dutch fertilizer producer OCI. The OCI plant, slated to open in 2025, would be the world's first new commercial facility to capture and sequester 95% of the emissions produced by making ammonia. Norway’s Yara is looking to invest in a blue ammonia plant in Ingleside, Texas that would capture about 95% of the carbon emissions. Other companies looking to build low-emissions ammonia projects along the Gulf Coast include Exxon Mobil, BASF, and LOTTE Chemical, Mitsubishi, and RWE, according to Reuters.
                                    • Biological pest control is among the new strategies revolutionizing the agribusiness industry, according to a recent article in AgriBusiness Global (ABG). Traditional pest control methods, which typically rely on chemical pesticides, can be harmful to the environment and human health. However, recent R&D efforts are focusing on developing biological pest control strategies that use natural enemies of pests, such as predators, parasites, and pathogens. Agricultural biologicals are a diverse group of products derived from naturally occurring microorganisms, plant extracts, beneficial insects, or other organic matter. By harnessing the power of nature, farmers can effectively manage pests while minimizing the use of harmful chemicals. Biological pest control not only reduces environmental impact but also promotes biodiversity and enhances ecosystem resilience, per the ABG article.
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