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Rob Heidrick

Industry Lowdown: Agriculture Sector

by Rob Heidrick | Dun & Bradstreet Editor

July 8, 2016 | No Comments »

Take a look at some of the trends, challenges, and opportunities from industry profiles in the agriculture sector updated by D&B First Research editors in the past month.

Opportunity: Ag Tech Delivers Cost Savings
More farmers are reducing costs by using information-based technologies, according to a new USDA study. Four of the most commonly used are yield mapping, soil mapping, auto-guidance machinery steering, and variable rate technologies. Yield mapping technology can save corn farmers up to $25 an acre, and soil mapping and GPS-based machine steering can each deliver at least $13 an acre in savings, survey results showed. Variable rate technologies, which control the application of inputs such as seed, fertilizer, or pesticides, can be combined with the others to augment savings. Smartphone apps designed by farmers or machinery manufacturers also are popular and can lead to savings. Universities with strong agriculture programs may have lists of farming apps on their websites.

To learn more about this and other industry trends, see our Crop Production industry report.

Opportunity: US Pork Exports Rise
US pork exports to China and Hong Kong, a key end-use market for producers, were up nearly 80% in volume and more than 50% in value for the first four months of 2016 compared to the same period the year before, according to the National Pork Board. The board, which works to promote US pork products overseas, also points to increases of more than 20% in volume and value in pork exports to Central America, at a time when bottlenecks at West Coast ports, the high dollar, and global competition presented challenges for US pork exporters. The US Meat Export Federation has reported positive results from a workshop in Mexico to develop pork products for that market in cooperation with the country’s largest pork importers. The USDA expects higher volume of pork production in the US for 2017 but warns of stiff competition from other exporters, including the EU, Canada, and Brazil, for Asian customers.

For more insight, see our Animal Production industry report.

Trend: Corn Exports from South America Poised to Increase
Policy changes in Brazil and Argentina are reducing corn production and export costs, which could put downward pressure on prices and change the competitive landscape for US corn farmers. Brazil is the second-largest corn exporter behind the US, and Argentina is third. A new government in Argentina has adjusted exchange rates, simplified its exporting process, and eliminated export taxes on corn. The USDA’s Economic Research Service predicts that Argentina’s policy changes could make that country’s Northern Heartland region the lowest-cost corn exporter in the world. Brazil has expanded its corn production area and increased its second, later crop of corn, bringing it to the international market in September-January, when US farmers typically see the lowest prices for their product. All this comes at a time when prices for US exports were already pressured by the strength of the dollar. However, demand for US corn has been strong in 2016 in markets such as Mexico, Colombia, and South Korea, according to the US Grains Council.

Find more information in the Grain Farming industry profile.

Challenge: New Food Safety Rules Impact Dairy Processors
New FDA rules issued under the Food Safety Modernization Act (FSMA) intensify the regulatory compliance duties of dairy product manufacturers. The FSMA aims to shift the focus towards contamination prevention, instead of response, by improving supply chain transparency. One new measure impacting dairy processing facilities is the Food Defense Rule, which requires facilities to create and maintain plans to prevent intentional adulteration. The plans must document vulnerabilities, mitigation and monitoring strategies, and corrective actions, according to Dairy Foods. The similar Preventative Controls Rule for Human Food, finalized in 2015, protects against unintentional adulteration. The stricter rules come as food contamination incidents make headlines, but dairy producers fear that smaller businesses will struggle under the increased regulation.

See our Dairy Products Manufacturing report for more on this and other industry trends.

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Rob Heidrick is an industry editor on the First Research team. He covers food and beverage manufacturing, hospitality, and recreation, as well as the government and education sectors. Rob is also on the First Research social media team and an editor for Bizmology.

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