Page 34 - Strategic_Plan_finanal_jlw_PDF_NeatFlip

This chart represents the
latest cost structure of the
industry. It shows the
proportion of revenue
each cost item absorbs,
with the remainder
representing profit.

The comparison to all
other industries in the
sector provides a
benchmark that shows
how the industry differs
from its peers.

Evaluation Two Vegetable Farming in the US Industry Code 11120

The Vegetable Farming industry is composed of vegetable and melon farmers, but it does
not include notable crops such as corn, soybeans or wheat. Vegetables are a staple in the US
diet and, despite per capita fruit and vegetable consumption stagnating slightly over the
five years to 2016; Americans have continued to demand vegetables in high quantities.
Relatively steady demand, coupled with high retail prices for vegetables during the past
five years, has fertilized industry growth.

Additionally, a push toward healthy eating has increased the market for fresh vegetables, as
opposed to processed vegetables, benefiting the industry; fresh vegetables yield higher
profit margins for farmers as they generally sell for more than double the price of
processed vegetables. As a result, over the past five years, industry revenue is expected to
grow an annualized 2.5% to $26.2 billion, including an increase of 0.4% in 2016.

For the past decade, both the number of small local farms and the number of larger
commercial farms has been growing. According to data from the 2012 agriculture census
(latest data available), the number of vegetable farms with more than 5,000 acres grew
45.0% in the 10 years to 2012, while the number of farms with less than 0.9 acres grew
75.0% over the same period.

Large farms are more profitable than medium ones as they tend to invest more heavily in
automated planting, harvesting, and sorting systems, thereby increasing productivity and
decreasing cost per unit.

Prepared for Growers Ice Company, Inc.
34
Jim White, PhD --- JL White International