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

                            Jan 30, 2024 - Prices Rise for Farm Services
                            • Prices paid by farmers for services rose nearly 6% in June compared to a year ago and were up 0.3% versus the previous month, according to the latest data from the USDA. Sales for the US farm support services industry are forecast to grow at a 1.34% compounded annual rate from 2023 to 2027, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund. The forecast for slow growth for farm support services follows robust increases in 2021 and 2022.
                            • Most US farmers and ranchers can expect to pay more for labor this year, according to the USDA’s Farm Labor Survey (FLS) published in November. 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) 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.
                            • The US Gulf Coast has become a magnet for fertilizer companies looking to produce climate-friendly blue ammonia thanks to generous subsidies in the Inflation Reduction Act and its existing export structure, Reuters reports. So-called blue ammonia is a low-emissions compound consisting of hydrogen and nitrogen to make fertilizer. Facilities under construction include a 1.1 million metric ton per year plant at Beaumont, Texas built by Dutch fertilizer producer OCI. The OCI plant, slated to open in 2025, would be the world's first new commercial facility to capture and sequester 95% of the emissions produced by making ammonia. Norway’s Yara is looking to invest in a blue ammonia plant in Ingleside, Texas that would capture about 95% of the carbon emissions. Other companies looking to build low-emissions ammonia projects along the Gulf Coast include Exxon Mobil, BASF, and LOTTE Chemical, Mitsubishi and RWE, according to Reuters.
                            • Farm sector income is forecast to fall in 2023 after reaching record highs in 2022, according to the US Department of Agriculture Economic Research Service’s Farm Sector Income Forecast released in November. Inflation-adjusted net farm income – a broad measure of farm profitability – is expected to decline by 17.4% in 2023 to $151.1 billion compared with $182.8 billion in calendar year 2022. The forecast blames the $31.8 billion decline on lower government payments and higher production costs.
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