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What are the Different Types of Agribusiness Companies?

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  • Originally Written By: Klaus Strasser
  • Revised By: C. Mitchell
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  • Last Modified Date: 12 September 2016
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There are two broad categories of agribusiness companies, namely those that manage and own farms and those that provide essential goods and services to those farms. In general, “agribusiness” refers to corporations that center on food, be it meat or plant, that is intended for human consumption. Among farms, the majority tend to be major operations that provide food growth and production on a large scale. Smaller niche producers can also make up a significant market share in some places, though. These more focused operations often do just one thing — seafood production, for instance — and may serve only a narrow customer base. On the product supply side, companies can often be divided according to what they provide. Some deal with farm use machinery, like tractors and sorting machines; others deal with food preparation, slaughter, and packaging. Still more concern themselves with personnel and coordinating farm labor needs. Pesticides and chemicals suitable for commercial farms is another possible supply niche.

Large Corporate Farms

Corporate farms differ from small, private farms, which may grow food for local use or for sale at nearby markets or suppliers. Agribusiness companies generally employ modern business strategies with the aim of earning a profit on their goods. Some control the entire food production process, from growing plants to food processing and packaging goods. These agribusiness companies are often criticized by worker advocacy and environmental groups, which sometimes argue that the corporations force smaller farms to go out of business or cause environmental damage.

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Some of the bigger agribusiness companies produce many different types of goods, such as livestock as well as things like corn and wheat. Depending on the size of the corporation, activities may also be spread out among several smaller farms. Each of these may look to the outside observer like a small, possibly family-run business, and they typically carry different names despite being owned and managed by the same parent company.

Niche Markets

Corporations don’t have to be massive or far-reaching to participate in the agribusiness sector, and some are legitimately small operations. Most of these focus on regional supply and demand, and often produce only one or two food types. Some of the largest corporations are national or even international in reach, whereas smaller operations are more likely to be strictly regional.

Seafood operations are often considered to be businesses that have a more niche operation, and can be both large and small. Some specialize in providing certain markets with things like fresh crab and lobster, or may be engaged in creating canned tuna or sardines. These sorts of companies generally have their own fishing vessels to harvest fish and their own processing plant where the catch is processed and packaged.

Machinery Producers

Farm machinery producers are also in the agribusiness sector. These firms may manufacture any type of equipment that could be used in the agricultural process. This can include products such as tractors or equipment that is used in slaughterhouses. Some of these companies are hugely profitable and hold the market edge when it comes to providing certain things. Their primary focus is sales, and in most cases they aren’t actually engaged in using the equipment themselves.

Packaging and Processing

It’s also essential that food be packaged, and there are companies that focus specifically on this aspect of the production process. Some companies may lease out part of their business to another similar business in order to increase profits. Examples of this include businesses that rent packaging plant facilities to outside groups. This often means that smaller companies can have their food packed and processed at the larger plant, sometimes using cans or other packaging materials that are used, or have been designed, by the corporation.

Personnel Specialists

Other agribusinesses companies may specialize in providing personnel. This means that they focus exclusively or almost exclusively on finding qualified workers, such as field laborers or production and processing plant employees. Many of these businesses also hire farm managers to supervise operations, while some firms provide management services and consultation themselves. Leaders of these sorts of companies often come from a hands-on farming background which gives them a lot of experience when it comes to knowing what these sorts of operations need, but they can also simply be experts in human resources.

Agrichemicals

A number of chemical companies that create fertilizers and pesticides for conglomerate farms can also be classified within the agribusiness sector. Large farming operations often have different needs when it comes to chemicals than smaller farms do, and they often contract directly with the manufacturers to provide things more or less “to order.” Researchers from these sorts of companies sometimes work directly with farm owners and managers to create chemical products designed specifically for certain uses. The widespread use of chemicals on commercial farms has raised a lot of concern with both environmentalists and human health lobbyists, but the efficiencies these sorts of products provide make them very compelling to farm owners.

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Post 5

What are some of the various agribusiness careers, and what are their educational requirements? I have an economics degree and I was hoping to transfer my skills to the agribusiness industry. I would like to live in a more rural environment so my kids do not have to grow up in the city. I want them to experience some of the things I did during my childhood, but I would still like to earn enough to support my family.

Georgesplane
Post 4

@BoniJ & Parmnparsley- You two discuss some of the major dilemmas that I constantly think of. I grew up on a small farm, and now I am going to school to pursue an agribusiness degree. I am not pursuing this degree because I am content with the status quo, but because I want to find organic and sustainable solutions that will feed the masses for the long-term.

I now live in the city and I miss the access to healthy food I used to have in the rural areas of the country. I believe that supply chains, energy use, and mass production practices are a large part of the problem. I want to find ways to reduce food miles, increase access to fresh foods, and reduce the energy and resource footprint of large agribusiness. Wish me luck!

parmnparsley
Post 3

@fiorite- While you make some valid points about the progress of society, more needs to be done towards creating more sustainable agribusiness. Current methods strip the nutrient value from our food supplies, and many of these technological advancements are rushed to market without any long-term evidence proving they are safe. I would have to agree with BoniJ on this subject.

Many of the practices of big agribusinesses are causing severe long-term problems that will only be compounded as the population grows. Developing nations are becoming dependent on industrialized nations for food security thanks to the technology advancements brought on by the green revolution. Soil erosion is occurring at an unsustainable pace because of monoculture techniques pushed by agribusinesses.

Finally, big

agribusiness is too dependent on fossil fuels for energy and fertilizer. This final issue poses a major question, what happens to the global food supply when the cost of energy and fertilizers skyrockets and all that is left are poor soils?
Fiorite
Post 2

@BoniJ- I would counter your argument that agri-business companies solely engineer foods to make a profit. While I am sure that profit is a large part of genetically engineered and modified foods, the reality is this technology is necessary to sustain our population. You said it yourself; "we are no longer an agricultural society". This is simply one reason why technology and large agricultural businesses are necessary. Private enterprise needs to be profitable, but the population demands cheap food. Historically, Americans spent much more of their income on food. Now food is cheap, and the population is secure in knowing that it can feed itself.

This brings me to the other reason that agricultural businesses need to modify the foods

we eat. Not all crops can grow in all places, or during times of drought or disease. Agricultural engineering ensures that food crops can be grown without worry of drought or disease wiping out entire crops. Agribusiness has ensured that famine does not exist amongst the industrialized nations, allowing people to trudge on in their advancement of society.

These are just my thoughts, but I believe that agricultural engineering is an important part of why this country and other industrialized nations have seen so much growth. A small segment of society can worry about the food needs of an entire nation, allowing the rest of the population to be productive in other sectors of the economy.

BoniJ
Post 1

Since we are no longer an agricultural society, we have to depend on agribusiness to provide us with reasonably priced, healthy food. I know that some of these big food businesses do engineer some of our fresh food products, in order to make a profit. This is not healthy, but I'm not sure what we can do about it, besides making everyone aware of it. and putting pressure on the companies and the government.

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