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.
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 44 workers and generates $64 million annually.
- The agricultural chemical manufacturing industry consists of about 755 companies that employ 36,900 workers and generate $48.3 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
Recent Developments
Mar 18, 2024 - Strong Wage Growth Amid Declining Prices in 2023
- Employment by agricultural chemical manufacturers was relatively flat (up less than 1%) in December compared to a year ago after growing by 1.3% in the previous annual comparison, according to the US Bureau of Labor Statistics. Meanwhile, average wages at chemical manufacturers hit a new high of $30.95 per hour in December, a 10.3% year-over-year change, per the BLS. Industry wages continued to climb last year amid steeply declining producer prices for makers of agricultural chemicals, which have fallen from their peak in April 2022 following Russia’s invasion of Ukraine.
- 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 this year and last 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.
- The US Gulf Coast has become a magnet for fertilizer companies looking to produce climate-friendly blue ammonia thanks to generous subsidies in the Inflation Reduction Act and its existing export structure, Reuters reports. So-called blue ammonia is a low-emissions compound consisting of hydrogen and nitrogen to make fertilizer. Facilities under construction include a 1.1 million metric ton per year plant at Beaumont, Texas built by Dutch fertilizer producer OCI. The OCI plant, slated to open in 2025, would be the world's first new commercial facility to capture and sequester 95% of the emissions produced by making ammonia. Norway’s Yara is looking to invest in a blue ammonia plant in Ingleside, Texas that would capture about 95% of the carbon emissions. Other companies looking to build low-emissions ammonia projects along the Gulf Coast include Exxon Mobil, BASF, and LOTTE Chemical, Mitsubishi, and RWE, according to Reuters.
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