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 749 Agricultural chemical manufacturers in the US produce fertilizers, pesticides, and repellents, herbicides and fungicides, soil amendments, plant growth regulators, 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 51 workers, and generates $56.5 million annually.
- The agricultural chemical manufacturing industry comprises about 749 companies that employ 38,200 workers and generate $42.3 billion annually.
- The industry is concentrated, with the 8 largest fertilizer companies representing 60% of segment revenue and the 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
Recent Developments
Jul 18, 2024 - Payroll Costs Climb
- Producer prices for agricultural chemical manufacturers fell 6.9% in May compared to a year ago after tumbling 21% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Following a steep runup that kicked off in the fourth quarter of 2020 and peaked in April 2022, prices have fallen sharply. Meanwhile, employment by agricultural chemical manufacturers grew 4.2% in May year over year to a new high. Average industry wages at chemical manufacturers rose 4% annually in June to top $31 per hour for the first time, BLS data show. Shipments of agricultural chemicals are seasonal, typically peaking in March ahead of the spring planting season and bottoming out in July.
- Fertilizer prices typically fall with the end of the high-demand spring planting season, but not this summer, according to a July article in AgWeb’s Farm Journal. Fertilizer prices are high right now largely because of global forces, including high natural gas prices in Europe, which have caused producers there to decrease production. Producers in Brazil have also scaled back production due to high costs. China, a major exporter of fertilizer, is restricting exports of nitrogen and phosphates used to make fertilizer to ensure domestic supply and low prices. In response to extreme heat, Egypt’s government is restricting industrial activity and redirecting gas supplies to cool homes. Finally, US import restrictions on Morocco, Russia, and China limit supply. "These products are all very world-driven," Josh Linville, VP of fertilizer at StoneX, told AgWeb, adding, "We don't always set the tone or the price - the rest of the world can do that."
- Fewer farmers are farming fewer acres but producing more each year, according to the USDA’s 2022 Census of Agriculture (CoA), released in February. Between the 2017 and 2022 censuses, the number of farms in the US declined by 141,733 or 7%, while the number of acres operated by farm operations declined by 20.1 million (2.2%) over the same period, a loss equivalent to an area about the size of Maine. While the number of farm operations and acres operated fell, the value of agricultural production rose from $389 billion in 2017 to $533 billion in 2022 (40% nominally and 17% adjusted for inflation), per the CoA. The number of farms purchasing chemicals fell 3.4% in 2022 versus the 2017 CoA to about 864.2 million, per the USDA.
- Food producers are switching to green fertilizers to reduce carbon emissions along their supply chains in advance of new climate-disclosure rules, according to the renewable energy news site Reccessary. In March, the US Security and Exchange Commission voted to approve its final rule on disclosure of climate-change-related information for public companies beginning as early as fiscal year 2025. (An appeals court has since issued an administrative stay.) In anticipation of the coming regulatory changes, producers, including PepsiCo, Nestle, and Heineken, are turning to green fertilizer start-ups to help tackle emission levels, Necessary reports. Green fertilizers are nitrate-based mineral fertilizers with the same chemical and physical composition as fertilizers produced with fossil fuel sources but with a much lower carbon footprint because they are produced with renewable energy. The ag chemical industry is stepping up efforts to produce lower carbon ammonia and practices that improve nitrogen use efficiency.
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