It also provides manufacturing, processing, quality control, product procurement and a range of other services to its local cooperatives for the benefit of their farmer owners. This is significant given the business environment of the past 5 years. Farmers today continue to operate in a very challenging business environment. Farm income continues to be highly variable due to the inherent risks involving production agriculture and the volatile nature of commodity markets. Commodity prices remain depressed.
Production costs continue to increase.
The global marketplace continues to be characterized by subsidized foreign competition and artificial trade barriers. Globalization continues to drive changes throughout every sector of the economy. This has led to increasing consolidation at every level as businesses attempt to gain the size, scale and efficiencies needed to remain viable and competitive long term. This is underscored by recent mergers in the energy, chemical, insurance, banking, financial services, manufacturing, and transportation industries, as well as in agriculture, especially in the food processing and retailing sectors. In addition, the businesses that farmer cooperatives buy from or sell to continue to grow in size and market share.