Agriculture Industry Description

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Top Agriculture Industry Description

Companies and organizations that produce, grow, raise, harvest, process, store, market, and/or sell food and other crops and livestock.

Summary

The agricultural industry is, at once, very old and very new.  It encompasses a variety of players who span the spectrum from the farmers who till the soil and nurture the animals to the scientists who splice jellyfish genes into potatoes so the plants will glow when they need water.

Farmers' cooperatives took root in the early part of the 19th century and remain significant in the industry. Cooperatives such as CHS (grain) and Sunkist Growers (fruit) often formed so members could capitalize on their strength in numbers in order to buy supplies at lower cost, build facilities, and negotiate better prices for their crops. Many co-ops have merged or formed joint ventures to further increase their buying power or product offerings. Dairy Farmers of America and New Zealand's Fonterra are two prime examples.

A number of food cooperatives have been expanding their capabilities, often becoming a part of the processing stage of food production. Ocean Spray Cranberries has a processing unit that was formed by the co-op to turn its raw ingredients into consumer-ready foods. Conversely, grain cooperatives have stuck to their traditional storage and marketing services. Many live in the shadows of the larger companies that offer similar services, such as Archer Daniels Midland and Bunge Limited.

Historically, livestock farmers haven't formed cooperatives. Instead, they generally contract with larger companies to supply animals for processing. Vertically integrated producer-processors, such as Perdue Farms, supply farmers with newly hatched chicks and feed, and later gather back full-grown birds to be turned into supermarket-ready products. Having reached the apex of vertical integration, Tyson Foods has pursued horizontal integration, having added the beef and pork dominance of IBP (now Tyson Fresh Meats) to its own firm grip on the US poultry market.

At the root of all growth in the agriculture industry is an increasing world population. Agri-biotech companies are looking for ways to help feed the growing number of global mouths through genetic modification (GM), which continually strives to create sturdier plants and animals, disease resistance, and higher crop yields. Although GM plants are already in the food supply, public concern over them has led to a slowdown in advancement and has stung firms, including Monsanto and Syngenta, with public criticism. Nonetheless, consolidation, vertical integration, and genetic modification are all part of the agricultural industry's push to produce more food, cheaply, while making steady profits. As opportunities arise in emerging markets, many agribusinesses will utilize these options to stake their claim.

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Agriculture Industry Terminology



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