My, what a difference a year can make. In 2006, many in the ag retail community were just about ready to bury the crop protection products side of their businesses under a thick layer of biotech and triple-stacked seeds. For the year, sales for CropLife 100 retailers in the crop protection products category dropped a steep $821 million to just under $5.3 billion. Market share for crop protection products dipped to 39% — the lowest percentage in nearly a decade.
“In 2006, we finally saw what we had been fearing — a mass shift and decrease in crop protection,” said Jim Shelton, agronomy division manager for Landmark Service Cooperative. Many of the 2007 CropLife 100 retailers surveyed thought 2006 would mark the beginning of a steady downward spiral for the category.
A Nice Comeback
In 2007, however, crop protection product sales rose, if not from the grave, at least back into the land of respectability. Growing 3.8%, the category had revenue among CropLife 100 retailers of more than $5.5 billion. Although this rate of growth wasn’t good enough to keep the crop protection product segment from losing market share (down 2% to 37%), it was still welcome news to ag retailers that expected the worse.
“In our area, more preemerge grass treatments were used on Roundup Ready corn vs. last year,” says David Hintzsche, president for Hintzsche Fertilizer, Inc. “The other big change was the increased use of fungicides for corn this year. There was some use last year with good results, but many more acres were applied this year. Higher corn prices also supported this trend because there was an easier payback on the investment.”
Dan Kennedy, general manager for Ritter Crop Services, agreed that higher commodity prices made crop protection product investments more common in 2007. “I think for the most part, this was farmers going for the highest yields possible,” says Kennedy. “When commodity prices are higher, they will put more inputs into the crop. I think we are seeing the same thing in fertilizer.”
To appreciate just how widespread this positive news was in 2007, consider the performance of the category’s three sub-segments — herbicides, fungicides, and insecticides. In 2006, all of these segments suffered revenue losses or no gains. For example, when CropLife 100 retailers were asked if their herbicide sales increased in 2006, only 42% said this was the case. The other 58% either experienced sales declines or flat revenue for the year.
In 2007, the percentage of retailers seeing their herbicide sales increasing 1% to 5% jumped to 74%. Better still, only 6% of respondents said their herbicide sales declined.
For insecticides, the news was also much better in 2007. During the year, 59% of CropLife 100 retailers reported sales increases in this segment. This compared with only 37% that had revenue gains in 2006.
Far and away, however, the star of the crop protection products’ universe in 2007 was fungicide. According to the 2006 CropLife 100 survey, only 44% of retailers had sales gains in this segment during that calendar year. In 2007, this percentage jumped ahead significantly, to 81%. Even more impressive, only 15% of respondents indicated their fungicide sales dropped in 2007, down from 30% the prior year.
Of course, this growth for the fungicides segment was tied to its preventive use by growers. Of the products available for this effort, strobilurins were the most popular, being used by 89% of those growers with fungicide programs. Triazoles were second at 39%, followed closely by chlorothalonils at 34%.
Going into 2008, 94% of CropLife 100 retailers expect preventative fungicide use to continue to be a “significant or steady growth opportunity” for their businesses. Only 6% of respondents believe this trend would have no impact on their operations.