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
Jul 23, 2024 - Farm Profits Squeezed
- 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.
- Employment by farm supplies wholesalers grew 1.5% in May compared to a year ago, even with its pre-pandemic peak in June of 2016, according to the latest US Bureau of Labor Statistics data. Employment by the industry is seasonal, typically peaking in midyear. Average wages at farm supplies wholesalers rose 2.1% in May year over year to $29.54 per hour, just shy of their peak last October. Meanwhile, producer prices for miscellaneous nondurable goods merchant wholesalers, which includes distributors of farm supplies, jumped 14.7% in May year over year after rising by 2.9% in the previous annual comparison, BLS data show.
- 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.
- Net farm income – a broad measure of farm profitability – is projected to decline this year compared to 2023, according to the latest USDA Farm Sector Income Forecast. In inflation-adjusted 2024 dollars, net farm income is forecast to fall by $43.1 billion (27.1%) from 2023 to 2024, and net cash farm income is forecast to decrease by $42.2 billion (25.8%) compared with the previous year, If realized, both measures in 2024 would fall below their 2003-2022 averages (in inflation-adjusted dollars). Overall, farm cash receipts are forecast to fall $21.2 billion (4.2%) from 2023 to $485.5 billion in 2024 in nominal dollars. Direct government farm payments are forecast at $10.2 billion in 2024, a $1.9 billion drop from 2023. Total production expenses are forecast to increase by $16.7 billion from 2023 to $455.1 billion in 2024.
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