Community Business Resouce Council

Agriculture Industry

 
     
 
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Understandng Agriculturre Industry

Agriculture Critical Business Challenges

If you are experiencing any of these critical business challenges, then CBRC would like to help. Our Business Strategist has helped agriculture companies overcome their frustrations by conducting a strategic growth analysis - then involving them with designing a business solution to generate revenue and solve their critical business challenges.

 

Here are a few of those business challenges that we have solutions:

  • Dependence on Agriculture Industry - By definition, farm support services depend heavily on the success of crop and livestock farms. Rising input and labor costs may actually help some service providers, as it may make sense for a farm to outsource certain labor- or capital-intensive tasks. However, the livelihood of many support services depends heavily on factors beyond the company's control, including grain prices, demand for meat and food crops, trends in imports and exports, fuel costs, and federal farm support programs.
  • Cash Flow, Employment Highly Seasonal - Many farm services depend on a few critical weeks (planting and post-harvest) for the majority of profits. Employment levels can swing considerably depending on food demand, farm worker wages, and growing conditions. Because of the highly seasonal nature and the changes in year-to-year demand, few service providers can count on renewable contracts.
  • Dependence on Low-Cost Labor - Other than specialty service providers such as animal breeders, agricultural support service wages rarely exceed rates paid to hired farm workers. In general, farmers look at support services as a source of low-cost labor for tasks that the farm might otherwise do itself.
  • Competition from Value-Added Processors - Some food processors are expanding services to include post-harvest activities like drying, packing, irradiation, ripening, curing, and grading. Depending on the product, farmers may bypass the services of a third party and deal directly with a value-added processor for post-harvest tasks, processing, and warehousing. Some processors now bring refrigerated trucks and post-harvest technologies to the farm to immediately process and ship agricultural products.
  • Dependence on Technical Expertise - Agricultural and livestock support services often provide their own equipment to service a field or livestock operation. Since around 90 percent of all farm support services employ fewer than 20 people, companies often depend highly on the technical knowledge of a few key employees. Given seasonal demand for services, retaining these key technical experts over multiple years can be difficult.
  • Disease and Contamination - Companies that manage livestock or provide post-harvest services for agricultural crops must be mindful of sanitation and safe food handling practices. Produce can become contaminated with E.coli or salmonella. Horse trainers, boarding facilities and kennels, farriers, and breeders must all be careful to handle animals properly. Facilities face the risk of death and disease from foot-and-mouth disease, "white line" disease in horses, and canine parvovirus.
Agriculture Industry Trends
  • Fewer Farms Outsource Post-Harvest Crop Activities - The number of companies and employees decade. More US farms are supplying their own post-harvest labor or are working with processors that provide post-harvest services. Around 1,000 companies provided post-harvest activities in the late 2000s compared to 1,400 in the late 1990s.
  • Increase in Animal Support Services, Employees - More companies and workers provide support services for livestock production, though total industry revenue has remained flat. The number of companies specializing in non-veterinary animal support services has increased about 30 percent over the past decade to around 4,200, and employment has risen 20 percent. Most of this growth is in companies with fewer than 20 people. Industry revenue has remained flat at around $2.5 billion.
  • Cotton Ginning Declines - Cotton ginning is a significant post-harvest crop activity, particularly in Texas and several southeastern states. Industry revenue from cotton ginning has fallen from $1 billion a decade ago to around $600 million. Fewer than 3,000 people now work in around 250 US cotton gins, a drop of around 20 percent for both workers and companies compared to a decade ago.
Agriculture Industry Opportunities
  • Soil Decontamination - Pre-harvest specialists that plow and fertilize farmland may be able to extend services to include soil decontamination. Overuse of fertilizers in corn fields and increased regulation to reduce levels of volatile organic compounds (VOCs) may lead to opportunities in site and field remediation. New vapor extraction technologies can remove 85 to 100 percent of VOCs.
  • Value-Added Products - Post-harvest crop specialists can consider extending their product reach to add fresh-from-the-farm products. Companies that dry, sort, grade, and pack are in excellent position to convert prepared produce into finished, value-added products. Post-harvest specialists may be able to work in conjunction with processors and wholesalers to establish new products and brands.
  • International Consulting - Companies can provide consulting to lower crop loss rates for developing countries and international relief agencies. Crop losses are as high as 50 percent in developing nations, depending on the crop, according to Food Security in a Climate of Change. Such losses can worsen famine and starvation. Non-governmental organizations (NGOs) often hire support service experts to help indigenous populations better manage the post-harvest process.

 

 

 

 

 

 

 
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