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 9,500 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 use 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.

    • Farm support services companies vary widely in the type of services provided and processes used.
    • More than 9,500 companies and over $24 billion in annual revenue.
    • About 89,400 employees in crop and animal production support services with annual payroll of $3.6 billion.
    • 92% of companies employ 20 or fewer people.
    • Large firms include Archer Daniels Midland, Cargill, and Syngenta.
                            Industry Forecast
                            Farm Support Services Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Feb 28, 2023 - Protecting Child Farmworkers
                            • Regulatory action to protect children hired to work in US agriculture is long overdue, according to Human Rights Watch (HRW). In February, HRW called on the next labor secretary to act to protect child farmworkers, noting that agriculture is the most dangerous industry open to child workers in the United States. Under US law, children as young as 12 can work unlimited hours on farms of any size with a parent’s permission, as long as they don’t miss school. HRW reports that thousands of children are injured while working on farms each year. A Government Accountability Office study found that while only 3% of working US children are farmworkers, they account for more than half of work-related child deaths. In February, five US senators wrote to the outgoing labor secretary urging action to protect children working on tobacco farms from injury and illness.
                            • High prices for crops and increased Chinese demand for crop imports are expected to give a boost to farmers, agricultural chemical suppliers, and grain traders, The Wall Street Journal reports. “We expect the market environment to be similar to 2022,” the CEO of agribusiness and food company Bunge Greg Heckman said on a recent analyst call, adding “That includes a globally tight crop supply, strong demand.” Farmers are expected to increase plantings this year to capitalize on high grain prices and offset higher input costs. Corn acres are expected to surpass 90 million, up about 2% from 2022, according to Farm Progress. US net farm income is projected at $137 billion this year, down 16% from 2022, when it hit its highest level in decades, according to a February report from the US Department of Agriculture.
                            • The high cost and short supply of fertilizer is expected to persist in 2023, Modern Farmer reported in December. Research from the Food and Agriculture Organization of the United Nations (FAO) along with the World Trade Organization (WTO) shows that the fertilizer crisis that’s been steadily growing since 2021 will continue this year, impacting agricultural production and food security worldwide, particularly in regions that rely heavily on imported inputs — such as Africa. A combination of lingering pandemic-fueled supply chain issues, Russia’s war in Ukraine, and high inflation are to blame for fertilizer being both harder to come by for farmers and much more expensive, according to Modern Farmer. Fertilizer accounts for about 35% percent of farmers’ costs when cultivating core crops such as wheat and corn, according to the US Department of Agriculture.
                            • A new technology that uses elevated solar panels holds promise for enabling farmers to use their land for energy and crop production simultaneously, The Wall Street Journal reports. Previously, farmers who wanted to install solar panels on their land had to choose between energy and crop production. Agrivoltaics frees up limited farmland for multiple simultaneous uses while contributing to the emissions reductions, according to WSJ. With US farmland becoming scarcer and more expensive, farmers are hoping they can deploy agrivoltaics without reducing crop yields. While the nascent technology currently accounts for a small fraction of the world’s total solar-energy capacity, about 2.9 gigawatts at the end of 2020, according to research firm Fitch Solutions, it’s expected to grow to more than 10 gigawatts by 2030, or the equivalent of more than 3,000 wind turbines, according to the US Department of Energy.
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