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 9,660 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 Ag Production and Farm Income
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 9-10 workers and generates $2-3 million in annual revenue.
- The farm support services industry includes about 9,660 companies that employ some 94,850 workers and generate around $24.6 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, and Florida are home to most farm support service providers.
Industry Forecast
Farm Support Services Industry Growth
Recent Developments
Jul 30, 2024 - Pricing Flat Amid Tight Farm Budgets
- USDA data show that prices paid by farmers for services rose 2.1% in April compared to a year ago but were relatively unchanged from March. Prices farmers pay for services have been essentially flat so far this year. Slowing demand for key commodities such as corn, wheat, and soybeans is depressing prices for farmers and constraining their spending, according to the latest estimates from the USDA. Meanwhile, average wages for farm and field workers have risen to record levels, further straining farm budgets.
- In July, the USDA began accepting applications through its Emergency Assistance for Livestock, Honeybees, and Farm-raised Fish Program (ELAP) to provide financial assistance to eligible dairy producers who incur milk losses due to Highly Pathogenic Avian Influenza (H5N1) infection in their dairy herds. The USDA expanded its Farm Service Agency ELAP through the rule-making process to assist with a portion of financial losses resulting from reduced milk production when cattle are removed from commercial milking in dairy herds having a confirmed positive H5N1 test. To qualify for assistance, positive test results must be confirmed through the USDA’s Animal and Plant Health Inspection Service. H5N1 infections have been detected in dairy cows in a dozen states, including Colorado, Kansas, Michigan, Minnesota, New Mexico, Ohio, and Texas. An outbreak of bird flu can cost dairy producers in some states $10,000 a day in lost revenue due to reduced milk production.
- 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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