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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                    Coronavirus Update

                                    May 14, 2022 - EPA Releases Plan to Protect Endangered Species and Support Sustainable Agriculture
                                    • The US Environmental Protection Agency (EPA) in April released its first-ever comprehensive work plan to address the challenge of protecting endangered species from pesticides. The plan establishes four overall strategies and dozens of actions to adopt protections while providing farmers with access to pesticides. The plan will serve as “the blueprint for how EPA will create an enduring path to meet its goals of protecting endangered species and providing all people with safe, affordable food and protection from pests,” said EPA Administrator Michael S. Regan. In the coming months, EPA will engage with a wide range of stakeholders to identify opportunities for collaboration and will continue seeking input on more effective and efficient ways to meet its obligations under the Endangered Species Act when registering pesticides under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA).
                                    • The US Environmental Protection Agency (EPA) on April 28 2022 issued a notice of intent to suspend (NOITS), which when effective, will prevent the sale, distribution, and use of the technical-grade products that contain the pesticide dimethyl tetrachloroterephthalate (DCPA). DCPA is an herbicide used to control grasses and certain weeds in agricultural settings where crops including broccoli, kale, and cabbage, as well as tomatoes, onions, and herbs are grown. According to the EPA, the NOITS was issued due to manufacturer AMVAC’s long-standing failure to respond to EPA requests for necessary data, including a comprehensive study of the effects of DCPA on thyroid development and function in adults and before birth. If AMVAC fails to respond within 30 days, the NOITS will become final and it will be illegal for AMVAC to distribute, use, or sell its technical-grade DCPA pesticide product until the suspension is lifted. If the technical-grade product is suspended, it will be illegal for AMVAC to use it to formulate the end-use products used by growers. Stocks of DCPA end-use pesticide products that have already been formulated prior to the suspension may continue to be distributed, sold, and used according to the label.
                                    • Agricultural chemicals manufacturers are expected to see increased demand for herbicide and fungicide products to control frogeye leaf spot in soybeans and tar spot in corn in 2022. Cases of these crop diseases are rising in the US and can result in crop yield losses of 30% for soybeans and 40% for corn. Manufacturers are urging farmers to be proactive in treating crops to stave off the diseases and apply agriculture chemicals quickly if signs of these diseases are identified.
                                    • CropLife America and the Responsible Industry for a Sound Environment (RISE) are joining forces with over 350 other organizations to support the existing Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). A bill recently introduced in Congress could change how agricultural chemicals are evaluated and approved. The organizations are concerned that innovation and access to agricultural chemicals could become limited if the bill becomes law.
                                    • Prices for agricultural chemicals are inflated, having been on a steep rise since mid-2021. In March 2022, industry prices were up 68% from a year earlier. By segment, fertilizer prices jumped 112.6%, while pesticides and other agricultural chemicals were up 14.6%. The price increases are due to tight supplies of agricultural chemicals in the global market and higher input costs. Input costs were up 62% for gas fuels and 15.6% for chemicals and allied products like mineral inputs. Agricultural chemical manufacturers are passing their higher input costs up the chain to customers in efforts to manage profit margins.
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