Agribusiness Explained: What It Is, Challenges, and Examples

Agribusiness Explained: What It Is, Challenges, and Examples
Agribusiness Explained: What It Is, Challenges, and Examples

Agribusiness Explained: What It Is, Challenges, and Examples By JAMES CHEN Updated October 10, 2023 Reviewed by SOMER ANDERSON Agribusiness encompasses the economic sectors for farming and farming-related commerce. It involves all the steps for getting agricultural goods to the market, including production, processing, and distribution. The industry is a traditional part of any economy, especially for countries with arable land and excess agricultural products for export.


Agribusiness is a combination of the words “agriculture” and “business,” and it refers to commerce in farming and farming-related activities. Agribusiness covers the production, processing, and distribution of farm-based goods. Companies in the agribusiness industry comprise all aspects of food production. Climate change has amplified the pressure on many agribusinesses to adapt to large-scale shifts in weather patterns.

Understanding Agribusiness

Agribusiness treats the different aspects of raising agricultural products as an integrated system. Trading farm goods is among the oldest human undertakings, but advances in the last century have made it a high-tech industry. Farmers raise animals and harvest fruits and vegetables with the help of sophisticated harvesting techniques, including using GPS to manage their operations. Manufacturers have developed increasingly automated machines that require very little labor. Processing plants are constantly renewing how they clean and package livestock to make production cleaner and more efficient.

While consumers don't see each part of this industry, we rely on the sector's efforts to remain sustainable while aiming for lower food prices.

Agribusiness Challenges

Market forces considerably impact the agribusiness sector, as do natural forces, such as changes in the earth's climate. Changes in consumer taste alter what products are grown and raised. For example, shifting away from red meat might cause demand—and therefore prices—for beef to fall, changing how thousands of acres of farmland are used. Increased demand for produce may shift the mix of fruits and vegetables that farmers raise, requiring investments in irrigation systems and other ways of boosting production.

Climate change is perhaps the greatest common challenge for agribusinesses worldwide.

It is one of the industries most affected by and also involved in propelling climate change. Estimates vary widely but nevertheless show the depth of the challenge: agribusiness worldwide accounts for at least 21% of the world's greenhouse gas emissions, helping to drive the rise in global temperatures.

All this represents a major challenge for agribusinesses, which face pressure to adopt more sustainable production methods. Finding ways to reduce emissions and adapt to a changing climate will be key to future success.

Use of New Technology

The use of new technology is vital to remain competitive in the global agribusiness sector. Farmers need to reduce crop costs and increase yield per square acre to stay competitive.

Some farmers have adopted bee vectoring technology.

This involves raising bees and using them as a delivery method for biocontrol agents, which can help protect plants from pests, fungi, and diseases. Bees are key to agriculture, but populations have dropped in recent years. Almost half the honeybee colonies in the United States died in 2022. This new technology can encourage more beekeeping and promote the growth of more colonies, while improving crop yields and fighting disease.

Electronic drones have also played a greater role in agribusiness in recent years.

Farmers have used drones for tasks like scouting for pests and diseases, monitoring water stress, screening plants, locating stray livestock, and gathering data for flood risk modeling. Robotics, GPS technology, and moisture sensors also help farmers improve worker safety and apply pesticides and fertilizers more easily across closely-targeted areas, and reduce wasted water.

Agribusiness Examples

Agribusiness is a broad industry with a vast range of companies and operations. Agribusinesses include small family farms and multinational conglomerates in food production on a global scale. Some examples of agribusinesses include farm machine manufacturers, such as Deere & Company (DE); seed and agrochemical manufacturers, such as Bayer; food processing companies, such as ADM; farmer's cooperatives; agritourism companies; and makers of biofuels, animal feeds, and other related products.

What Is Agriculture?

Agriculture is the practice of raising crops, livestock, fish, trees, and other living organisms for food or other products. Agriculture has a long history, with humans beginning to farm plants about 11,000 years ago.

What Are the Three Main Categories of Agribusiness?

Agribusiness can be split into three major categories—agriculture, livestock, and forestry. Agriculture includes activities like planting and harvesting crops. Livestock concerns raising animals for products like milk, eggs, or meat. Forestry involves planting, growing, and harvesting trees for construction, papermaking, and other purposes.

What Are Some Agribusiness Jobs?

Agribusiness is a large industry involving many different types of farming and businesses, small and large. Those who work in the sector might be planting fields, building farm machinery, designing aquaculture tanks, and transporting animals and vegetables to the market.

What Is the Future of Agribusiness?

Agribusiness will likely evolve because of the effects of climate change. Other changes underway include the rise of genetically modified crops and industry consolidation.

The Bottom Line

Agribusiness is one of the world's oldest industries, with human agriculture beginning millennia ago. It is highly diverse and includes everyone from scientists developing new plants to industrial workers building farm equipment to laborers planting and harvesting food. Though the industry is facing major changes and challenges, largely because of climate change, it will continue to evolve as people's food needs change.