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 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 5,000 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.

Weather Effects Demand

The agricultural products that customers purchase can change based on the weather conditions in their area.

Farms Consolidate, Specialize

Almost 60% of farm production now comes from farms with $1 million or more in annual sales, up from 31% in the early 1990s.

Industry size & Structure

A typical farm supplies wholesaler operates out of 1-2 locations, employs less than 20 workers, and generates $28 million annually.

    • The farm supplies wholesaler industry consists of about 5,000 companies that employ 116,800 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

                                Coronavirus Update

                                Apr 15, 2022 - USDA Hikes Loan Rates
                                • The USDA’s Farm Service Agency (FSA) is raising its lending rates for agricultural producers. In April 2022, the FSA raised the rate on farm operating loans to 2.75%, up from 2.125% in January. FSA loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment, or meet cash flow needs. Rising interest rates discourage borrowing by farmers, potentially reducing demand for farm supplies.
                                • Farm supplies wholesalers are seeing greater opportunities to sell biological products alongside traditional synthetic pesticides and fertilizers. Biologicals are naturally derived, sustainable, and may be organic-certified, but are formulated for a wide range of crops. Biologicals can enhance a plant’s efficiency in using nutrients, reduce plant stress, and control pests, all of which support greater crop yield. A flood of new, scientifically tested products is entering the market, giving farm supply wholesalers more options.
                                • Farm supplies wholesalers face the same supply chain disruptions that are hitting other industries. A key issue in early 2022 is a shipping container shortage. Top shipping and ports industry executives and analysts are warning that the crisis may persist for another year despite plans to produce more containers. Increasing the stock of containers and improving their availability to exporters alone will not ease the crisis because the entire supply chain is suffering from shortages of workers, missing truck drivers, contraction of the fleet of container ships, and related reduction in the availability of slots on container ships and the imbalance in trade flows. Many empty containers are stranded in inland depots, ports, and adjoining empty patches of land in the US and Europe, as there aren’t enough vessels sailing back to Asia where these boxes are needed. Moving loaded containers from east to west is more lucrative than hauling empties in the reverse direction, so empty containers may stay where they are for some time. Some others are parked at shipment hubs across Asia, waiting for ships willing to do the short-haul trips within the region.
                                • Farm income is projected to decrease $23 billion in 2022 because of a sharp decline forecast in federal government payments and higher input costs, according to the Food & Agricultural Policy Research Institute (FAPRI) at the University of Missouri. FAPRI estimates net farm income at $99.3 billion, a $23 billion drop (18.8%) from net farm income for 2021. The difference effectively matches expected drops in federal subsidies created in response to the pandemic.
                                • Employment in the farm supplies wholesalers industry increased 0.2% year over year in Feb 2022 and was up 1.4% compared to the pre-pandemic month of February 2020.
                                • The global fertilizer market is forecast to grow 4.4% annually through 2025 to reach $3 billion, according to Markets and Markets. The global herbicide market is forecast to grow 6% annually to reach $43 billion by 2024, according to Market Research Future.
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