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 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 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

                            Coronavirus Update

                            Apr 15, 2022 - Bird Flu Outbreak Hits Poultry Industry
                            • Poultry farmers are struggling with the worst bird flu outbreak in seven years. Since first detected in February 2022, the highly pathogenic H1N1 strain of avian influenza, has spread to farms across more than half of US states, killing nearly 25 million birds. As of mid-April, about 170 flocks had been affected, including the first cases in Texas, according to the USDA. The spread of the disease is expected to increase demand for farm support companies that provide culling and disease prevention services.
                            • Net farm income, a broad measure of profits and an indicator of demand for farm support services, is forecast to decrease 7.9% year over year in 2022 when adjusted for inflation, according to the federal Economic Research Service. Farm cash receipts are forecast to increase 6.8% in nominal dollars during 2022 but direct government farm payments are forecast to decrease 57% from 2021 forecast levels. Net farm income reached an estimated $123 billion in 2021, the highest since 2013, according to the US Department of Agriculture. At that level, income is 19.5% higher than the 10-year average, reflecting the economy-wide recovery from the coronavirus pandemic. Government aid is expected to equal one-third of net farm income, down from 2020 but still more than average.
                            • Farm support services in California struggled against drought conditions that are forecast to continue in 2022. In addition, the federal government announced in February that it would not release water to Central Valley farmers in 2022. 2021 was one of the driest years on record and about two-thirds of California is now under severe drought conditions. California farmers fallowed (removed from production) 295,000 acres of farmland in 2021, reducing rice, cotton, grain, and field crop production. Worsening the situation is the Sustainable Groudwater Management Act that took effect in 2021 and limits groundwater pumping in efforts to conserve. According to experts at the Public Policy Institute of California, farmers will need to fallow at least 500,000 acres by 2040 to achieve the state’s groundwater sustainability goals. Fewer and smaller farms impact demand for farm support services.
                            • The volume of livestock on hand is an indicator of demand for animal care and breeding. In early April 2022, breeders placed about 239 million eggs in incubators for hatching, up 1% from a year ago, and placed 188,000 chicks for meat production, up slightly from a year ago. Farms had 12.2 million heads of cattle on hand on March 1, 2022, up 1% from a year earlier, and the highest March 1 inventory since 1996. Sheep and lamb inventory at the start of 2022 was 5.07 million heads, down 2% from a year ago. Breeding sheep inventory was also down 2% and shorn wool production was down 3%, totaling 22.5 million pounds.
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