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.

Chemical Regulation and Liability

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

Seasonal Demand Dependent on Weather

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

Industry size & Structure

The typical agricultural chemical manufacturer operates from a single location, employs 44 workers and generates $56.8 million annually.

    • The agricultural chemical manufacturing industry consists of about 755 companies that employ 36,900 workers and generate $42.3 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

                                    May 18, 2023 - New Online Tool for Agrochemical Formulators
                                    • DOW Crop Solver is a new online tool that helps formulators of agrochemicals speed up inert ingredient selection and evaluation, accelerating product development, AgriBusiness Global reported in May. Dow Industrial Solutions’ DOW Crop Solver (DCS) provides information on additives in the early stages of development, enabling formulators to save time by avoiding unnecessary formulation iterations while also reducing wasted material, ensuring more successful formulation in the field, according to AgriBusiness Global. (An inert ingredient is any substance other than an “active” ingredient that’s intentionally included in a pesticide product.) As agrochemicals become more complex, selecting the right inert ingredients is key to addressing challenges facing traditional pesticide development and for developing stable, efficient crop protection formulations that allow the active ingredient to realize its full potential. DCS offers easy-to-find technical data on inert ingredients and formulators the option to request samples.
                                    • US organic food sales – a demand indicator for organic pesticides and other agrochemicals – topped $60 billion for the first time last year, almost doubling 2021’s growth and accounting for 6% of total food sales, according to the 2023 Organic Industry Survey, released in May by the Organic Trade Association (OTA). Sales of organic produce once again topped all organic categories, totaling $22 billion and accounting for 15% of all US fruit and vegetable sales. The sector’s 4% growth rate was nearly twice the pace of 2021. The accelerated growth of the organic sector defied inflation, supply chain disruptions, geopolitical events, a labor shortage and other adverse factors. "Organic has proven it can withstand short-term economic storms,” OTA CEO Tom Chapman said in a press release.
                                    • The US Environmental Protection Agency has slightly narrowed the window for farmers in major soybean-producing states to use a weedkiller criticized for drifting away from where it is sprayed, Reuters reports. The 2023 deadline for farmers to spray dicamba in Iowa, Illinois and Indiana will be June 12, instead of June 20 last year. The EPA approved a June 20 deadline for South Dakota, instead of June 30 last year, according to Reuters. The new deadlines are intended to reduce risks, the agency said. Some scientists consider an earlier deadline to be safer because high temperatures can increase the risk for dicamba to drift from where it is sprayed. Farmers and scientists have reported problems with dicamba drifting and causing damage to nearby plants not genetically modified to resist the herbicide. Some have called for an outright ban on the use of dicamba.
                                    • Fungicides are becoming more important and their use is increasing as diseases and abiotic stress hostile to plant growth become a greater threat to crops, according to CropLife. About half a million acres of corn were treated with fungicides in the late 1990s and early 2000s, while today, more than 20 million acres are treated, CropLife reports. The development of full-season high-yielding hybrid seeds (aka racehorse hybrids) has created a larger window for diseases to threaten crop yields. Also, new fungal diseases like tar spot and Curvularia leaf spot have emerged. While fungicides may not be needed every year, over a span of five years, with abiotic stress present in just one or two of those years, the average yield bump over the five years is almost always 15 to 18 bushels across any given location, explains says Tyler Harp, Fungicide Technical Product Lead with seed giant Syngenta US.
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