Farm Raw Product Wholesalers
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 3,335 farm raw product wholesalers in the US purchase grain, crops, and livestock from area farms, ranches, and breeders, then aggregate the products or animals and sell in larger volumes to slaughterhouses, grain mills, poultry farms, yarn and textile manufacturers (cotton, wool), food manufacturers, exporters, landscaping firms and builders (sod), biofuel producers and other manufacturers and wholesalers.
Volatile Commodity Prices
Farm commodity prices have declined from the peak levels they rose to during spring 2022 following Russia’s invasion of Ukraine.
Trade Restrictions Limit Markets
Trade restrictions on exports limit market access and make exports more expensive for foreign customers.
Industry size & Structure
The average farm raw material product wholesaler employs 18 workers and generates about $104 million in annual revenue.
- There are 3,335 farm raw material product wholesalers in the US, operating 6,130 facilities, employing about 71,700 people, and generating about $348 billion in annual revenue.
- The industry is somewhat concentrated with the 20 largest firms controlling 56% of industry revenue.
- Large grain wholesaling companies include Cargill, Scoular, Tronson Grain, and Pacificor.
- Large livestock wholesaling companies include Smith Farms, East Carolina Stockyard, and South Texas Cattle Marketing.
Industry Forecast
Farm Raw Product Wholesalers Industry Growth
Recent Developments
Nov 23, 2024 - Wholesale Prices Rebounding
- Producer prices for distributors of farm raw products jumped 15.1% in September compared to a year ago, according to the latest US Bureau of Labor Statistics data. The double-digit rise in industry producer prices followed a similarly steep decline in wholesale prices year-over-year in July, as the market experiences considerable sales volatility. Meanwhile, employment by the industry grew 2.2% year over year in September, BLS data show. Sales of farm raw products have tumbled from their highs in 2022 when Russia’s invasion of Ukraine drove up prices for grains, oilseeds, and other commodity products.
- Purchasers of farm raw products marketed as organic will need to verify products have proper organic certification as the USDA comes down hard on fraudulent claims, Farm Progress report. Since the implementation of the Strengthening Organic Enforcement (SOE) final rule in March, the agency has uncovered several incidents of fraud in the organic marketplace, particularly involving imports, and is prosecuting offenders. “We are certainly finding product that has been sent to the United States that cannot be sold as organic in the United States, and we are stopping that,” said Jennifer Tucker, deputy administrator for the USDA’s National Organic Program. Moreover, the grace period where distributors and others along the supply chain were granted an extension to get certified, has expired. As such, farms, businesses, and other entities working in organic supply chains are now required to comply with the new SOE regulations.
- Updated projections for 2024 farm income don’t look quite as gloomy as they did earlier this year, AgWeb’s Farm Journal reports, citing new data from the Economic Research Service (ERS). New numbers from the ERS show that net cash farm income for 2024 will fall by about $12 billion, down about 7% from 2023, and net farm income will fall by $6.5 billion or 4.4%. That’s compared to ERS projections released in February that suggested net farm income would fall 26%. The primary cause for 2024’s decline in farm income is commodity prices. Cash receipts or sales are expected to fall by $27.7 billion. When combined with the inventory adjustment for crops, the value of crop production is forecast to decrease by $25.6 billion from 2023, with the largest decline coming from corn and soybeans. Fertilizer expenses for crop farmers are expected to fall by almost 10%.
- The Biden administration in May announced new standards for sustainable aviation fuel (SAF), FarmProgress reports. The Treasury Department and Internal Revenue Service issued new guidelines for tax credits for SAF meant to spur production of SAF that reduce greenhouse gas emissions by at least 50% compared to petroleum-based jet fuel. Agriculture Secretary Tom Vilsack called the new guidelines for tax credits an “important steppingstone” that acknowledges the role farmers can play in lowering greenhouse gas emissions. The USDA also announced a pilot program to encourage farmers to “bundle” climate-smart agriculture practices for SAF feedstock. Corn-based ethanol producers can earn a tax credit if they incorporate multiple practices, such as no-till farming, cover crops, and enhanced efficiency fertilizer. Soybean SAF producers can also earn the tax break if they practice no-till farming and cover cropping, per FarmProgress.
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