Agria Competition
Now Viewing Agria's competition in: Agriculture Crop Production
Recent Developments
Congress Passes Veto-Proof Farm Bill - Congress has passed the Farm Bill with veto-proof margins, although President Bush has threatened to veto the $300 billion legislation. A key objection of the President is the amount that would be paid to wealthy farmers. Married farmers with joint incomes of up to $1.5 million a year and individuals who make more than $750,000 could still qualify for some crop subsidies.
Ethanol Tax Credit may be Reduced - The Farm Bill includes a measure to cut the ethanol tax credit from 51 cents per gallon to 45. Much of the ethanol used in the US is made from corn, and farmers may be negatively impacted if a reduced tax credit leads to less ethanol use. The bill also cuts taxes on US ethanol imports, which may reduce US ethanol production.
Wheat Price Collapse Unlikely - US wheat prices aren't likely to collapse in 2008 even if production in other countries rebounds after poor harvests in 2007. Rising world food demand is likely to sustain prices as countries try to build their strategic wheat reserves. World wheat stocks are at their lowest in 30 years after prolonged drought in Australia and poor harvests in Canada, Europe, and the former Soviet Union in 2007.
Competitive Landscape
Demand is driven by federal agricultural policy programs, food consumption trends, and the grain and oilseed export market. The profitability of individual companies depends on maximizing crop yield and minimizing disease risk. Large companies have advantages in highly automated technologies and access to the latest in seed and crop technologies. Small operations can compete effectively by harvesting heirloom, non-genetically modified (GM), or specialty products. The industry is highly labor-intensive: average annual revenue per employee (operator and hired laborers) is $100,000.
Agriculture Crop Production Industry Forecast
from Hoover's/D&B subsidiary First Research
The output of US cotton, grains, tobacco, fruit, vegetables, and other crops is forecast to grow at an annual compounded rate of 5.9 percent between 2007 and 2012.
Agriculture Crops Growth Spikes
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: Weak dollar drives export demand
- Economies of scale favor large operators
- Risk: Commodity prices fall
Industries Where Agria Competes
- Agriculture
- Agricultural Support Activities & Products
- Livestock, Agricultural & Exotic Animal Feed & Services
- Animal Production
- Crop Production
- Grains & Oilseeds Production
- Agricultural Support Activities & Products
