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 3,400 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 slaughter houses, 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.

Trade Restrictions Limit Markets

Trade restrictions on exports limit market access and make exports more expensive for foreign customers.

Volatility in Commodity Prices

Raw farm product prices can change due to supply in the domestic or global market, shifts in consumer demand for products made with the commodity, and imports that gain or lose US market share.

Industry size & Structure

The average farm raw material product wholesaler employs about 20 workers and generates over $60 million in annual revenue.

    • There are 3,400 farm raw material product wholesalers in the US, operating 6,100 facilities, employing about 68,600 people, and generating annual revenue of $207 billion.
    • 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 21, 2022 - Strike Threat Worries Grain Farmers
                                    • A looming rail strike has farmers worried about getting harvested grain to market and future delays in the delivery of critical inputs, like fertilizer, in time to start planning for the next season, FB News reported in November. The threat by railway unions to strike comes amid already poor rail service conditions, a protracted truck driver shortage, and historically-low water levels on the Mississippi River. In October, the American Farm Bureau Federation along with more than 300 agriculture-related organizations, urged President Biden to continue to work with the railroad unions and railroads to ensure that the tentative agreement brokered this summer is ratified by the parties, according to FB News. As of late-October, six of the 12 unions had approved the labor agreement, while two rejected it and there are concerns others may follow suit. About 20% of industry shipments are transported by rail.
                                    • The US Department of Agriculture’s first crop rating for US winter wheat found nearly 75% of planted acres are in some level of drought, per the latest drought monitor. As a result, winter wheat condition ratings in early November 2022 were well below 2021’s 45% good to excellent and were at a record low for this time of year, according to AgWeb. The crop came in at only 28% good to excellent, with 35% of the crop rated poor to very poor. The last time the ratings were this low was in the drought year of 2012 at 40% good to excellent. On a regional basis, in Oklahoma only 11% of the crop is rated good to excellent, only 24% in Kansas, and in Texas only 4% is rated good, with none of the crop in the excellent category.
                                    • Highly pathogenic avian influenza (HPAI) has returned with migratory birds, posing a threat to poultry flocks. The 2022 avian influenza outbreak is the US's worst since 2015, The New York Times reported in October 2022. To date, the virus has affected 47 million farmed birds, nearly as many as in the 2014-2015 season, according to NYT. Unlike in 2015, the virus did not fizzle out over the summer but continued to circulate in wild birds, many of which spend their summers in the Arctic. Now, as wild birds fly south for the winter, they are bringing the virus with them. HPAI has killed about 6.4 million turkeys, or about 2.9% of US annual turkey production. The virus and inflation are causing turkey prices to rise to an average of $2.99 per pound, up from $1.59 this time last year, according to the USDA.
                                    • Distributors of raw farm products struggling with transportation delays should benefit from the US railroad industry’s drive to improve service. US freight railroads are adding back locomotives and reopening idled “hump” yards, reversing years of streamlining efforts as they seek to reduce service delays, The Wall Street Journal reported in September 2022. (Humps are artificial hills at railyards that efficiently transport a large volume of goods to different destinations.) The move reverses efforts by railroad operators to use fewer trains and operate on tighter schedules to cut costs and increase profits. But regulators and some customers complained these efforts made railroads more vulnerable to service disruptions, which increased during the pandemic due to labor shortages. Despite efforts of all the major US railroads to improve service, shippers say they are still facing delays and are relying more on trucks than they’d like.
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