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 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 51 workers and generates $56.5 million annually.

    • The agricultural chemical manufacturing industry consists of 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 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, 2024 - Shipments Rising Amid Falling Prices
                                    • Inventories and shipments of agricultural chemicals rose in March ahead of the busy spring planting season. Seasonally-adjusted inventories of ag chemicals ticked up 0.3% in March compared to a year ago and fell 0.9% from February, while shipments increased by 0.2% year over year and jumped 20.7% month over month, according to the latest data from the Census Bureau. Producer prices for pesticide and other agricultural chemical manufacturing extended their steep slide falling 16.6% in March compared to a year ago after falling 14.7% in the previous annual comparison, according to the BLS. Employment by pesticide, fertilizer, and other agricultural chemical manufacturers was relatively flat (up 0.5%) while average wages at chemical manufacturers rose 2.2% in April year over year to $30.06 per hour, per BLS wage data. rose in March ahead of the busy spring planting season. Seasonally-adjusted inventories of ag chemicals ticked up 0.3% in March compared to a year ago and fell 0.9% from February, while shipments increased by 0.2% year over year and jumped 20.7% month over month, according to the latest data from the Census Bureau. Producer prices for pesticide and other agricultural chemical manufacturing extended their steep slide, falling 16.6% in March compared to a year ago after falling 14.7% in the previous annual comparison, according to the BLS. Employment by pesticide, fertilizer, and other agricultural chemical manufacturers was relatively flat (up 0.5%) while average wages at chemical manufacturers rose 2.2% in April year over year to $30.06 per hour, per BLS wage data.
                                    • 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.
                                    • Global fertilizer usage is expected to climb in 2024 and 2023 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.
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