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

The pandemic and war in Ukraine prompted major supply disruptions resulting in a sharp rise in volatility of commodity prices including wheat and oilseeds.

Trade Restrictions Limit Markets

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

Industry size & Structure
Industry Forecast
Farm Raw Product Wholesalers Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

Jan 23, 2024 - Producer Prices Plunge
  • Producer prices for farm raw product wholesalers declined 14.2% in 2023 to their lowest level in more than a decade in December. Prices are falling amid rising labor costs, squeezing industry margins. Sales and inventories for farm raw product wholesalers both declined in September compared to a year ago. Meanwhile, overall employment rose in November year over year and average industry wages climbed nearly 10% to $26.89 per hour.
  • Ongoing uncertainty surrounding the federal budget is making it difficult for the USDA and producers to plan for the future, Agriculture Secretary Tom Vilsack told attendees at the American Farm Bureau Federation (AFBF) annual convention in January. Vilsack said that while the latest Continuing Resolution (CR) purportedly keeps funding at certain levels, potential cuts in any final budget deal could create greater shortfalls in the middle of the year. “As long as there’s uncertainty, it’s very difficult for farmers potentially to make long-term decisions or long-term planning.” The previous CR passed in November included an extension of the 2018 farm bill at current levels through Sept. 30, 2024. Calling for a new Farm Bill, AFBF President Zippy Duvall said “The current farm bill was written before the pandemic, before inflation spiked, and before global unrest sent shock waves through the food system. We need programs that reflect today’s realities.”
  • Food price inflation is expected to ease in 2024 as agricultural commodity costs ease, Bloomberg reported in November. Prices of sugar, coffee, corn, and soybeans are projected to fall amid better supply prospects, according to a new report from Rabobank. Demand is also expected to remain subdued with US consumers still squeezed by the rising cost of living. Global food commodity costs are finally easing after years of being roiled by the COVID-19 pandemic, extreme weather events, and Russia’s invasion of Ukraine. A United Nations gauge of global costs has slid about 25% since hitting a record in March 2022, helping to lower broader inflation, according to Bloomberg. However, the outlook remains uncertain for some commodities such as wheat, which may face potential restrictions on Russian exports, according to Rabobank.
  • The outlook for 2023’s cotton crop is poor by historic standards, according to the USDA Crop Progress Report. As of the first week of August, 41% of cotton acreage rated in good or excellent condition – the fifth-worst ranking in the past 20 years. The bleak outlook is being driven by Texas – the nation’s largest cotton producer – which has 55% of its acreage in poor or very poor condition. As of the August Crop Production report, the US average upland cotton yield for 2023 is projected at just 773 lb. per acre, which if realized would be the fourth lowest yield in the last 20 years. The USDA also forecasts 8.5 million upland cotton acres to be harvested, suggesting the abandonment rate – the percentage of unharvested planted acreage – to equal 22%. Cotton prices will likely be volatile until the market has a good estimate of how many bales will be produced.
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