Agribusiness in the US
Agribusiness includes the production, wholesale and processing levels of the food supply chain to the point of retail sale. Businesses in the industry include meat processors, grain wholesalers, agricultural machinery manufacturers and farmers. In recent years, COVID-19 caused revenue for the indust...
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| Format: | Market Research |
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| Language: | eng |
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| Summary: | Agribusiness includes the production, wholesale and processing levels of the food supply chain to the point of retail sale. Businesses in the industry include meat processors, grain wholesalers, agricultural machinery manufacturers and farmers. In recent years, COVID-19 caused revenue for the industry to decline, as spending on food away from home took a big hit. Despite this, agribusinesses benefited from the fact that grocery spending was still strong. The recovery from the pandemic created supply chain disruptions and excess demand, which resulted in high agricultural prices, boosting revenue. The relaxation of pandemic restrictions also made more people eat out, creating another source of income for agribusinesses.
Despite these positive trends, the industry faces major threats from rising interest rates, which has made the cost of borrowing for new food processing plants and farm equipment more expensive, causing revenue to drop in 2022 and 2023. International markets have also disrupted agribusinesses, as trade wars and the appreciating dollar has caused exports and revenue to fall. Overall, revenue for agribusiness has declined at a CAGR of 0.7% over the past five years, reaching $4.1 trillion in 2023. Revenue will creep downward 1.9% in that year.
The near future looks more optimistic for agribusinesses. The growing economy will result in rising incomes, raising spending on agricultural products and boosting revenue. The dollar will also depreciate, causing a boom in exports and reviving international markets. Biofuels are forecast to become more important, as concerns about climate change will increase their production. Since biofuels are made from crops, more investment in them will benefit the industry. Agricultural prices will decline modestly, so this will dampen the performance of agribusinesses somewhat. Overall, revenue for agribusiness will rise at a CAGR of 0.5% during the outlook period, reaching $4.2 trillion in 2028. Profit will remain steady, comprising 4.8% of revenue in 2028. |
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