Although no ag retailer would characterize it this way, the crop inputs marketplace is much like a race. Each year, the various input categories inevitably vie for a finite amount of grower-customer dollars. In some years, all categories enjoy value growth (as they did in 2010). Still, even in these years, some categories don’t keep pace with overall market growth and lose market share. It seems these racers are also one or two steps behind the rest of the pack.
In 2010, the runner behind position was held by the crop protection product category. For the year, according to CropLife 100 survey responders, crop protection sales did improve 3% to $6.6 billion. But, since this rate of growth lagged behind the overall market’s of 9%, crop protection once again saw its share of total revenues fall, down 2% to 32%.
For those observers that closely follow the fortunes of the crop protection market, this turn of events has become the norm. During the early years of the 21st century, the category was the dollars leader among CropLife 100 retailers for crop inputs. In fact, as recently as 2002, the crop protection product category accounted for almost half of all crop inputs/services sales at 49%.
Since that high-water mark, however, market share for the category has been on a slow, but steady, decline. Fertilizer finally surpassed crop protection as the top earning crop input/service category in 2006. And it’s been downhill from there. Whereas $1 out of every $2 spent by grower-customers at the ag retail level went to buy crop protection products back in the early 2000s, this number has dropped to less than $1 out of every $3 spent today.
Fun For Fungicides
If there has been an exceptional bright spot for the crop protection category recently, it would be the performance of the fungicides segment. Traditionally, fungicides have tended to lag behind its herbicide and insecticide in terms of market performance and awareness.
But that has changed in recent years. Thanks to heavy promotion of plant science and preventive application by crop protection manufacturers, the fungicides segment has enjoyed steady growth the past few seasons. For example, in the 2009 CropLife 100 survey, 46% of respondents said that their year-over-year fungicides sales had improved 1% to 5% from 2008.
The news was even better in 2010. According to this year’s survey, 62% of respondents saw increased fungicide sales. Better still, only 22% reported a sales loss in this segment, down by half from the 2009 survey.
The reason for this growth seems to tie back to increasing grower-customer awareness on the benefits of preventive fungicide use. When our survey asked respondents to characterize their customers’ attitudes toward preventive fungicide use on corn and soybeans, 15% said they understand the benefits of such a program and actively seek application work for it. Another 47% said that their grower-customers understand these benefits, but still need an “aggressive sell” from retailers to actually sign up for fungicide application work. Only 5% of respondents indicted their customers still didn’t understand or appreciate the benefits of preventive fungicide application.
For the herbicides segment, the news in 2010 was much worse. In the 2009 CropLife 100 survey, a sizable 68% of respondents said their herbicide sales for the year were up 1% to 5%, with another 22% reporting a sales decline. In 2010, however, only 36% of ag retailers saw their herbicides revenue improve. The majority, 46%, had sales decreases of 1% to 5%.
For this segment, the drop in glyphosate prices that occurred during 2009 could be negatively impacting the numbers. Or it could be that the growing glyphosate resistance problem isn’t as widespread as believed. When CropLife 100 retailers were asked to describe weed resistance in their regions of the country, only 30% said it was a major problem. The majority, 44%, described it as only “a minor problem” in their territories. Thirteen percent of respondents said glyphosate resistant weeds were not a problem at all.
In the final crop protection segment, insecticides, 2010 looked a whole lot like 2009. In both years, 42% of CropLife 100 retailers said their insecticide sales increased 1% to 5%. The only change was that 33% reported a sales decrease in 2010, whereas the figure for 2009 was 35%.