Agribusiness industries are facing numerous challenges and opportunities resulting from various fundamental forces. This is the second in a two part series of articles discussing these forces creating change in the agribusiness industries, and how companies and decision-makers are being affected by, and adapting to, them.

Production animal health is driven by innovation through capital intensive research and development. Sophisticated treatments mean these firms increasingly partner throughout the meat supply chain as knowledge providers as well as product suppliers. Societal goals for methods of production will increasingly join innovation as a key driver of the sector.

Porter’s Five Forces, plus technology and drivers of change, are used to analyze the U.S. livestock sector. Key animal agriculture issues are expected to be: 1) consumer demand in domestic vs. international markets; 2) cost competitiveness; 3) product differentiation; and 4) driving forces from regulations, retailer decisions, or activist’s movements.

Meatpacking is traditionally defined as the process of converting live animals to meat products. Today’s meatpackers operate in every part of the meat chain from animal genetics to complete meals. Porter’s Five Forces are used to frame the dynamic forces confronting this mature industry facing global economic and social changes.

Product differentiation is the main form of rivalry in the seed, pesticide, and farm machinery portions of the crop input supply industry. Product differentiation increases market share and profitability of the companies that produce the highest performing crop inputs. Technology and regulation may expand or restrict opportunities to differentiate.