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 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 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

                                    Coronavirus Update

                                    Nov 11, 2021 - Funding For Biofuels Producers Still Not Released
                                    • A group of US senators is pressing Agriculture Secretary Tom Vilsack and the Biden administration for answers about the delayed release of $700 million in pandemic relief aid for biofuels producers, which is now four months past the promised rollout date. Ethanol producers are already handling many challenges over the future of 15% ethanol fuel blends (E15) after a Circuit Court of Appeals reversed a 2019 EPA rule that allowed for E15 sales outside of the summer season. A bipartisan group of senators introduced a bill in July that would pave the way for year-round E15 sales.
                                    • Farm raw product wholesalers are among the companies struggling to get enough shipping containers. “It’s extremely difficult, we’re seeing lead times like we’ve never seen before in my almost 10 years here,” said Chris Wiegert of Healthy Food Ingredients, a company with processing plants in Minnesota, North Dakota, South Dakota and Nebraska. Experts say that thousands of containers filled with consumer goods from Asia move into US markets every day, but instead of returning filled with products grown by US farmers, more of the containers are exporting air. Officials with the Port of Los Angeles, the largest container port in the US, said that they shipped out a record number of empty containers in August. Ocean-going carriers can make more money by quickly returning empty containers to China for another load of goods for American consumers. “Look, there’s no argument that businesses should chase a high fee,” said Wenberg. “But these carriers agreed through our ocean shipping act, and are obligated in terms of operating in the United States market, to give our companies access to the system.”
                                    • The US Department of Agriculture (USDA) announced its intent to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity so that farmers, ranchers, and consumers have more choices in the marketplace. USDA also announced more than $150 million for existing small and very small processing facilities to help them weather COVID, compete in the marketplace and get the support they need to reach more customers. USDA is also holding meatpackers accountable by revitalizing the Packers and Stockyards Act, issuing new rules on “Product of USA” labels, and developing plans to expand farmers’ access to new markets.
                                    • A trade group representing some of America’s biggest baked goods companies is taking advantage of pandemic-related delays in updating new biofuel volumes requirements for the coming year to urge the Biden administration to ratchet back its biofuel ambitions. The American Bakers Association argues that using fuel made from crops could raise the cost of bread, donuts, and other foods. The group is also meeting with lawmakers about the issue because its members are hearing from suppliers of soy and canola oil – staple ingredients in many foods – that they could run short of by the end of the year as demand from the biofuels industry compounds already tight global markets.
                                    • Global trade in food and agricultural products increased 3.5% year over year in 2020, according to the World Trade Organization (WTO), but a USDA working paper says that the impact of the coronavirus was obscured by such factors as the de-escalation of trade disputes, particularly between the US and China. “Holding other factors constant, our estimates suggest that COVID-19 reduced overall agricultural trade by the approximate range of 5% to 10%, an effect two to three times smaller than our estimated effect for nonagricultural trade,” said the working paper from the USDA’s office of the chief economist.
                                    • The USDA allocated an additional $1.1 billion to increase payment rates for more than 410,000 cattle producers under the Coronavirus Food Assistance Program (CFAP) 1 program. The USDA will continue taking applications from swine producers and contract growers for CFAP-AA but would not release payments to pork producers as of late March. The department stated that the payments to pork producers "are likely to require modifications to the regulation as part of the broader evaluation and future assistance." Raw farm product wholesalers are likely to benefit from increased investment in the livestock industry.
                                    • China is forecast by the US Department of Agriculture (USDA) to import a record $27 billion worth of farm products in fiscal 2021 (started on October 1) and regain its rank as the top foreign market for American farm products.
                                    • Wholesale farm product sales decreased 0.1% month over month on an adjusted basis but increased 28.3% in value year over year on an unadjusted basis in September, according to the US Census Bureau. Year over year changes may be abnormal due to the large pandemic-related decrease in sales during September 2020.
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