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Farm Support Services Industry Profile Excerpt
| SIC Codes: 0721, 0722, 0723, 0724 NAICS Codes: 11511, 11521 Page Length: 10-12 Last Quarterly Update: 12/22/2008 View Sample Industry Profile |
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The US farm support service industry includes around 9,000 companies and 75,000 individuals with combined annual revenue of $15 billion. No major companies dominate. The industry is highly fragmented: the top 1 percent of companies employs 20 percent of the workforce. Around 80 percent of all companies employ fewer than 20.
This industry includes companies that support crop and animal farm operations but don't themselves harvest crops, raise farm animals, or own farmland.
COMPETITIVE LANDSCAPE
Demand is driven by domestic trends in crop and livestock production. The profitability of individual companies depends on establishing a value-added benefit to farms and keeping wages low. Large conglomerates like Cargill have advantages in vertical integration and economies of scope (offering a wide range of services). Small companies can compete effectively by specializing in a niche industry or service. The industry is labor-intensive: average revenue per worker for a typical company is $140,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include post-harvest crop activities like drying, cleaning, shelling, sorting, grading, and packing (45 percent of industry revenue); animal support activities like breeding livestock and pets, boarding and training horses, spraying cattle with insecticides, and stud services (25 percent); and soil preparation services like plowing, fertilizing, and planting, cultivating, and protecting crops (15 percent). Other services include machine-harvesting crops, crop farm management services, and farm labor contracting on citrus groves, vineyards, and orchards.
Of the 9,000 farm support service providers, half specialize in crops ...
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