Farm Supplies 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 4,900 farm supplies wholesalers in the US purchase animal feeds and additives, fertilizers, agricultural chemicals, pesticides, plant seeds, and bulbs in bulk and resell them to customers in smaller volumes. Primary customers include farms, other distributors, farm and garden supply retailers, nurseries and greenhouses, and landscaping businesses.
Adverse Weather
Changes in area weather conditions affect demand for agricultural products.
Farm Consolidation and Specialization
Large-scale farms – those with gross cash farm income (GCFI) of $1 million or more – represent about 5% of US farms but account for more than three-quarters (78%) of US farm production, according to USDA figures for 2022.
Industry size & Structure
A typical farm supplies wholesaler operates from 1-2 locations, employs fewer than 25 workers, and generates $29 million annually.
- The farm supplies wholesaler industry comprises about 4,900 companies that employ 120,300 workers and generate $140 billion annually.
- The industry is somewhat concentrated, with the 20 largest firms representing 50% of industry revenue.
- Large domestic companies include Southern States Cooperative (VA), Central Farm Supply (KY), Coastal Agriculture Supply (TX), and Heartland Agricultural Services (IL).
Industry Forecast
Farm Supplies Wholesalers Industry Growth
Recent Developments
Sep 23, 2024 - Employment and Wages Rising
- According to the latest US Bureau of Labor Statistics data, employment by farm supplies wholesalers grew 1.5% in July compared to a year ago. Employment by the industry is seasonal, typically peaking in midyear. Meanwhile, average wages at farm supplies wholesalers rose by 3% year over year in July to $29.41 per hour, down from their recent peak of $30.25 in June. Producer prices for miscellaneous nondurable goods merchant wholesalers, which includes distributors of farm supplies, were in record territory in July, jumping 11.3% YoY after rising 5.1% in the previous July-versus-July annual comparison, BLS data show.
- Updated projections for 2024 farm income don’t look quite as gloomy as they did earlier in the 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 widening spread between input prices paid by farmers and what they receive for outputs in the form of lower commodity prices is squeezing farm profits, according to Farm Progress. Current farm income instability due to inflationary pressures, high interest rates, and several supply chain disruptions have farmers facing higher input costs while receiving lower commodity prices. Moreover, as commodity prices have fallen the gap between the two widened in 2023 and 2024. The percentage change in crop output prices between 2023 and 2024 (-13.8%) is much larger than the percentage decrease in input prices (-1.38%) during that period, USDA data show. Without any relief in the form of improved crop prices, farmers will continue to suffer from cost/price squeezes, eroding farm profit margins and reducing their purchasing power, according to Farm Progress.
- Fewer farmers are farming fewer acres but producing more each year, according to the USDA’s 2022 Census of Agriculture (CoA), released in February. Between 2017 and 2022, the number of farms in the US declined by 141,733 or 7%, while the number of acres operated by farm operations declined by 20.1 million (2.2%) over the same period, a loss equivalent to an area about the size of Maine. While the number of farm operations and acres operated fell, the value of agricultural production rose from $389 billion in 2017 to $533 billion in 2022 (40% nominally and 17% adjusted for inflation), per the CoA. The latest CoA reveals that average production expenses per farm rose nearly 40% compared to the previous CoA, to $223.2 million in 2022 from $159.8 million in 2017.
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