Farm Support Services

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 9,350 companies in the farm support services sector provide a variety of services for either crop or animal production. Services include farm management services, farm labor contracting, pest control, packaging of crops, breeding, and sheep dipping and shearing, among many others.

Dependence On Farm Production

Farm support services companies are subject to supply and demand fluctuations in animal and crop production.

Impact of Immigration Reform

Many farm services companies employ migrant workers, particularly farm management services and farm labor contractors.

Industry size & Structure

The average farm support service provider employs about 9 workers and generates $2-3 million in annual revenue.

    • The farm support services industry includes about 9,345 companies that employ some 95,720 workers and generate around $24.5 billion in annual revenue.
    • Farm support services companies vary widely in the type of services provided and processes used.
    • Large firms include Archer Daniels Midland, Cargill, and Syngenta.
    • California, Texas, Florida, Washington, and Oregon are home to most farm support services providers.
                            Industry Forecast
                            Farm Support Services Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            May 30, 2024 - Slow Price and Sales Growth
                            • Prices paid by farmers for services rose 1.3% in January compared to a year ago but fell 3.5% versus the previous month, according to the latest data from the USDA. December’s rise, which represented a peak, followed a year of relatively flat prices that farmers paid for services. After two years of robust growth in 2022 and 2023, sales for the US farm support services industry are forecast to grow at a tepid rate of 1.1% this year. From 2024 to 2028, sales for the US farm support services industry are forecast to grow at a 2% compounded annual rate, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund, Inc.
                            • Farmworkers face a high risk for exposure to bird flu, USA Today reports. In April, Texas reported the first confirmed human H5N1 infection associated with the outbreak after confirmation by CDC. To date, only two people in the US have tested positive after being exposed to a wave of bird flu spreading among cows. Fortunately, those people, dairy farm workers in Texas and Michigan, experienced only eye irritation. To guard against the potential for spread between humans and animals, the USDA has announced it will provide financial support (up to $2,000 per affected premises per month) for producers who supply PPE to employees and/or provide outerwear uniform laundering, for producers of affected herds who facilitate the participation of their workers in USDA/CDC workplace and farmworker study. Farm labor contractors will want to closely monitor developments on the spread of bird flu to humans.
                            • Net farm income – a broad measure of farm profitability – is projected to decline this year compared to last, 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 to last 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 decrease by $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.
                            • Most US farmers and ranchers can expect to pay more for labor this year, according to the USDA’s Farm Labor Survey (FLS). According to the FLS, workers hired directly by farm operators in 13 states will pay more than $1 more per hour to their H-2A employees (the visa program for foreign temporary agricultural workers) in 224 than they did in 2023, while farmers in 31 states will pay between 50 cents and $1 more. Only in six states is the increase for 2024 less than 50 cents per hour. The smallest increase is forecast for the Midwestern states (Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio, and Wisconsin), while the largest percentage increase is in Hawaii, where farmers can expect to pay $1.49 per hour more this year for H-2A program workers than they did in 2023.
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