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 out of 1-2 locations, employs fewer than 25 workers, and generates $29 million annually.

    • The farm supplies wholesaler industry consists of 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 (VA), Central Farm Supply (KY), Coastal Agriculture Supply (TX), and Heartland Ag (IL).
                                Industry Forecast
                                Farm Supplies Wholesalers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 23, 2024 - Employment and Wages Rising
                                • Employment by farm supplies wholesalers grew 1.7% in March compared to a year ago and was up from the prior month as the industry began staffing up for the spring planting season, according to the latest US Bureau of Labor Statistics data. Average industry wages rose 3.7% over the same period to $29.45 per hour, according to BLS wage data. Seasonally-adjusted total sales for miscellaneous nondurable goods wholesalers, which includes farm supplies wholesalers, rose 3.2% in February compared to a year ago was up 9.2% vs. January, according to the Census Bureau. Sales for the US farm supplies wholesalers industry are forecast to grow at a 2.56% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund.
                                • 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.
                                • 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's (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.”
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