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 740 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 52-53 workers and generates $43 million annually.

    • The agricultural chemical manufacturing industry consists of about 740 companies that employ 38,600 workers and generate $31 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

                                    Nov 14, 2022 - Global Pesticide Use Soars
                                    • Global pesticide use has soared by 80% since 1990, with the world market set to hit $130 billion in 2023, according to a new Pesticide Atlas for 2022 released in October. The growth in pesticide use – driven in part by the European Union’s relaxation of some agricultural rules to prioritize food security following Russia’s invasion of Ukraine – is having a dramatic impact on human health and biodiversity, according to the Pesticide Atlas, which blames pesticides for driving a 30% decline in populations of field birds and butterflies since 1990 and an estimated 11,000 human fatalities and the poisoning of 385 million people every year. The report notes that almost one in 10 of Europe’s bees are threatened with extinction, due in part to the use of toxic chemical formulations in herbicides, pesticides, and fertilizers.
                                    • The global climate crisis is helping to drive an increase in pesticide use, according to the 2022 Pesticide Atlas. Published by a German environmental group, the Pesticide Atlas cites research on the effects of climate on insect activity from Seattle University. The research found that insect activity in crop-growing regions will rise along with temperatures, resulting in losses of rice, maize, and wheat by 10% to 25% for each degree Celsius that temperatures rise. Moreover, crops’ natural potential to resist pests decreases as a result of climate-related stress. Climate change also is altering pest populations and the ratio of pests to beneficial insects, further driving up pesticide usage. Measured in tons, pesticide use increased across six of the seven continents between 1999 and 2020, with South America up 119% and Europe down 0.2%.
                                    • The Biden administration in September 2022 announced $500 million in grant money to stimulate domestic fertilizer production. Under the new grant program, called the Fertilizer Production Expansion Program (FPEP), grants will be used to support “independent, innovative and sustainable American fertilizer production” to supply American farmers, said Secretary of Agriculture Tom Vilsack. Citing recent supply disruptions – notably the war in Ukraine, a major producer of fertilizer – Vilsack said the goal of the new grant program is to expand the manufacturing and processing of fertilizer and nutrient alternatives in the United States and its territories. Funding for the FPEP will be provided by the Commodity Credit Corporation.
                                    • The US Department of Agriculture in August 2022 announced a $300 million effort to support producers transitioning to organic farming and to strengthen organic markets. The USDA’s Organic Transition Initiative, funded in part by the American Rescue Plan, will provide support in three main areas: mentoring and advice; direct farmer assistance, and organic market security. USDA said the department hopes the program will reverse a trend of slow growth in farmers transitioning to organic, open opportunities for new and beginning organic farmers and expand consumer access to organic foods. While organically grown food is grown using no synthetic fertilizers or pesticides, pesticides derived from natural sources (such as biological pesticides) may be used inorganic production.
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