Agricultural Chemical Manufacturing
Description
Companies in this industry manufacture fertilizers and pesticides. Major companies include BASF and Bayer (Germany), Corteva Agriscience (US), Nutrien (Canada), Sumitomo Chemical (Japan), Syngenta (Switzerland), and Yara (Norway). Many smaller companies are involved in mixing purchased raw materials to produce customized fertilizer compounds with special characteristics.
The global agricultural chemical manufacturing industry is driven by food production requirements, according to ADRM Software Industry Data Models. Large, fast-developing countries with major agricultural economies are increasingly being targeted for industry growth.
The US agricultural chemical manufacturing industry includes about 1,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $30 billion.
COMPETITIVE LANDSCAPE
Demand for agricultural chemicals relies mainly on demand for various crops, which in turn depends on crop prices. The profitability of individual companies is linked to efficient operations and marketing. Big producers have large economies of scale in production. Smaller companies can compete effectively by making specialty chemicals or fertilizer mixtures for local markets. The US industry can be considered as highly concentrated with the 50 largest companies accounting for about 80% of the industry's revenue.
International trade in fertilizers is large, because phosphate rock and potash are available only in a few countries. The high product value makes bulk shipping costs relatively unimportant. The relative cost of natural gas (for nitrogen fertilizers) has a large effect on trade.
The US is usually a net importer of fertilizer, largely due to limited domestic supplies of nitrogen and potash, according to the US Department of Agriculture. The US imports most of its fertilizer supply from Canada, followed by Russia and Saudi Arabia as one of its key suppliers, according to the Observatory of Economic Complexity.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include agricultural and commercial pesticides, which account for about 45% of the industry revenue followed by synthetic ammonia, nitric acid, and ammonium compounds at more than 10%. Other products include phosphoric acid (5%).
Nitrogen fertilizers include products like ammonia, urea, ammonium nitrate (AN), and urea-ammonium nitrate (UAN). Phosphorous fertilizers include phosphoric acid, mono-ammonium phosphate (MAP), di-ammonium phosphate (DAP), and superphosphates like tri-sodium phosphate (TSP). Potassium fertilizers (potash) are common salts of potassium such as potassium chloride (muriate of potash) and potassium sulphate (sulphate of potash). Nitrogen is the most important fertilizer.
Nitrogen fertilizers are based on ammonia, which is made from the nitrogen in the air, using natural gas as a source of hydrogen and heat. Nitrogen fertilizer plants are often located near sources of natural gas. Phosphate fertilizers are produced from phosphate rock that is mined, crushed, and treated with sulfuric acid. The largest deposits of phosphate rock in the US are located in Florida. Potash is mined from salt deposits and purified into different grades of fertilizer by various solution and crystallization techniques. Potash and phosphate manufacturing plants are often located near potash and phosphate mines.
Pesticides include herbicides (mainly used to control weeds), insecticides, fungicides, various animal poisons, and biological agents. Herbicides account for about half of global pesticide industry revenue, with the remainder primarily generated from insecticides and fungicides. Most pesticides are synthesized from basic industrial chemicals.
Fertilizer mixtures contain various concentrations of nitrogen (N), phosphorous (P), and potassium (K, with the phosphorous and potassium concentrations often specified as equivalents of phosphorous pentoxide (P2O5) and potassium oxide (K20). Fertilizer mixtures are often made in local plants from basic fertilizer bought from large producers. Local soil and crop conditions typically require custom mixtures of the three main fertilizer products.
The global agricultural chemical manufacturing industry is driven by food production requirements, according to ADRM Software Industry Data Models. Large, fast-developing countries with major agricultural economies are increasingly being targeted for industry growth.
The US agricultural chemical manufacturing industry includes about 1,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $30 billion.
COMPETITIVE LANDSCAPE
Demand for agricultural chemicals relies mainly on demand for various crops, which in turn depends on crop prices. The profitability of individual companies is linked to efficient operations and marketing. Big producers have large economies of scale in production. Smaller companies can compete effectively by making specialty chemicals or fertilizer mixtures for local markets. The US industry can be considered as highly concentrated with the 50 largest companies accounting for about 80% of the industry's revenue.
International trade in fertilizers is large, because phosphate rock and potash are available only in a few countries. The high product value makes bulk shipping costs relatively unimportant. The relative cost of natural gas (for nitrogen fertilizers) has a large effect on trade.
The US is usually a net importer of fertilizer, largely due to limited domestic supplies of nitrogen and potash, according to the US Department of Agriculture. The US imports most of its fertilizer supply from Canada, followed by Russia and Saudi Arabia as one of its key suppliers, according to the Observatory of Economic Complexity.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include agricultural and commercial pesticides, which account for about 45% of the industry revenue followed by synthetic ammonia, nitric acid, and ammonium compounds at more than 10%. Other products include phosphoric acid (5%).
Nitrogen fertilizers include products like ammonia, urea, ammonium nitrate (AN), and urea-ammonium nitrate (UAN). Phosphorous fertilizers include phosphoric acid, mono-ammonium phosphate (MAP), di-ammonium phosphate (DAP), and superphosphates like tri-sodium phosphate (TSP). Potassium fertilizers (potash) are common salts of potassium such as potassium chloride (muriate of potash) and potassium sulphate (sulphate of potash). Nitrogen is the most important fertilizer.
Nitrogen fertilizers are based on ammonia, which is made from the nitrogen in the air, using natural gas as a source of hydrogen and heat. Nitrogen fertilizer plants are often located near sources of natural gas. Phosphate fertilizers are produced from phosphate rock that is mined, crushed, and treated with sulfuric acid. The largest deposits of phosphate rock in the US are located in Florida. Potash is mined from salt deposits and purified into different grades of fertilizer by various solution and crystallization techniques. Potash and phosphate manufacturing plants are often located near potash and phosphate mines.
Pesticides include herbicides (mainly used to control weeds), insecticides, fungicides, various animal poisons, and biological agents. Herbicides account for about half of global pesticide industry revenue, with the remainder primarily generated from insecticides and fungicides. Most pesticides are synthesized from basic industrial chemicals.
Fertilizer mixtures contain various concentrations of nitrogen (N), phosphorous (P), and potassium (K, with the phosphorous and potassium concentrations often specified as equivalents of phosphorous pentoxide (P2O5) and potassium oxide (K20). Fertilizer mixtures are often made in local plants from basic fertilizer bought from large producers. Local soil and crop conditions typically require custom mixtures of the three main fertilizer products.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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