1H 2020 Agribusiness M&A Report

Like almost every industry, the global coronavirus pandemic has been incredibly disruptive on many parts of the Agribusiness Industry. In developing countries, issues such as border closures and supply chain disruptions have amplified food security issues. In much of the developed world, massive changes in consumer behaviour have created huge imbalances in supply and demand. Labour intensive agricultural production and processing operations have struggled with virus outbreaks among the workforces which have led to shutdowns in many cases, while others operate at reduced capacity in order to help ensure worker safety. Nevertheless, we all must eat, and the virus has had much less impact on agriculture and food than it has on other more sensitive industries, such as travel and tourism. It has, however, exposed weaknesses and vulnerabilities in the industry, such as labour supply and supplier concentration in segments such as Protein Processing. According to Purdue University’s latest Ag Barometer Index, almost two-thirds of respondents remain very worried about the pandemic and its impact on their business, down from three-quarters of the respondents in the March survey. More than half plan to reduce their capital expenditures and approximately 40% expect their financial performance in 2020 to be worse than last year…