What Is Agribusiness?

Organic Local Farmer Giving Veggies to Shopper Outside

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Agribusiness refers to farming, but the term oddly is not often used in correlation with actual farms. Instead, agribusiness most commonly means an agriculturally related business that supplies farm inputs, such as machinery and seed supply.

Agribusiness also is used to describe businesses that are involved in the marketing of farm products, such as warehouses, wholesalers, processors, retailers, and more. Use of the term agribusiness by critics of corporate farming has created an aura of negativity around the term, associating it with large corporations and companies that produce environmentally questionable, nonorganic products while ensuring that smaller, potentially sustainable farms fail to turn a profit.

The true definition of agribusiness provides a shorthand way of describing businesses related to agriculture.

It's possible to major in agribusiness at a variety of different colleges and universities across the U.S., ranging from Cornell University in Ithaca, N.Y., to Iowa State University. Degrees focus on the economics of farm management and the science of agricultural management.

Examples of Agribusiness Companies

Deere & Company, which makes John Deere equipment, may be one of the best-known examples of a classic agribusiness company.

Deere & Company doesn't own farms or produce food products, but nearly every farmer owns a John Deere tractor, baler, or some other piece of the quintessential green and gold farm equipment.

Monsanto Company, which manufactures the herbicide Roundup (glyphosate) and various Roundup Ready genetically modified seeds, is another example of an agribusiness company. Another, Dow AgroSciences LLC (a wholly-owned subsidiary of the Dow Chemical Company), makes pesticides, herbicides, and fungicides, in addition to marketing seeds.

The Archer Daniels Midland Company, or ADM, processes oilseeds like canola and soy, processes corn into ingredients such as corn syrup, dextrose, and starch, and transports crops both nationally and internationally.

The term agribusiness generally isn't used to refer to actual farms, although Smithfield Foods Inc., the largest U.S. producer of pork, owns and runs its farms. Smithfield is owned by Chinese company WH Group (formerly Shuanghui International), which is the largest pork producer in the world and the largest meat producer in China.

Agribusiness Vs. Organic Farming

In the United States, you'll normally hear the term agribusiness used in contrast to organic agricultural businesses. For example, many people when talking about large-scale commercial agricultural operations will use the term agribusiness, but you won't hear the term used in relation to small-scale, organic farms.

Small family farms, smaller organic agriculture companies, and organic farmers often feel they have to compete with giant agribusiness companies when looking to gain a place in the agricultural marketplace. There's a persistent feeling among family farmers that they're an endangered species, due to the encroachment of agribusiness and corporate farms.

Small organic farms often use agribusiness products like John Deere tractors. Also, small organic farms aren't necessarily competing with larger, corporate-owned farms for the same market. For example, a customer who prefers to buy pastured pork because it's humanely produced and has a higher level of beneficial nutrients is unlikely to view conventionally produced, store-bought pork as an acceptable substitute.