Issue link: http://psai.uberflip.com/i/1198719
Page 16 ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION JANUARY 8, 2020 • Agriculture is expected to remain a steady customer for portable sanitation establishments. While agribusiness overall has been declining in the past couple of years due to lower commodity prices and trade wars, portable sanitation is most often used when food crops are being harvested by hand. This demand tracks more closely to population growth and demand for fresh foods. The fruit and vegetable industry typically experiences a low level of volatility because fresh produce consumption does not fluctuate much year by year. Over the past five years, household disposable income has increased, causing people to increase purchases of fresh produce from grocery stores and to eat out more often. Both of these factors have driven increased demand for human-harvested fruits and vegetables. No new harvesting technologies are expected to substantially alter the need for human harvesting in the coming year, so the amount of portable sanitation required will not change on that basis. If demand portable sanitation in agriculture changes at all, it will more likely be due to fewer workers being available as the result of immigration pressures. Other Trends to Watch In addition to the forces affecting the economy and portable sanitation's major customer groups, there are several other factors to watch in the coming year. These include: • Consolidation. The largest players in the portable sanitation industry are expected to continue to consolidate regional leaders into their companies whenever possible to increase market share and profitability. Several business deals of this nature have already been announced, and industry intelligence sources suggest others are currently in the works. The metrics of the industry are such that profitability increases with economies of scale, and when consolidation happens it can force other companies to substantially lower prices or exit the industry. To dates, this consolidation has not precluded new, smaller firms from entering the industry, so the overall impact on the number of firms in the industry could be minimal, but it will affect larger markets in the short term. Companies that are not interested in selling should be proactive about how they differentiate themselves on a basis other than price to maximize their chances of thriving should they find themselves competing against a large consolidating firm. • Environmental regulations. Although the current White House administration has promised to reduce environmental regulations, it remains to be seen whether these will have an effect on portable sanitation operations. The EPA does not regulate portable sanitation companies directly. The environmental guidelines that affect the industry are set by state and local authorities whose willingness to reduce requirements may not be as robust. The PSAI is not aware of any significant easing of regulations within the US to date. The Economic Outlook…continued from page 15 …Continued on page 17