The ag retail marketplace has witnessed plenty of ups and downs over the past five years: The Great Recession happened, which by extension led to lots of grower-customers forgoing fertilizer application work during 2008 and 2009; the number of herbicide-resistant weeds continued to multiple at an alarming rate; and the agricultural industry experienced its worst drought since the late 1980s, to name just a few.
Through all these changes, however, the one ag retail industry constant has been the crop protection products category losing overall market share. At times, it seemed as if nothing could stem this downward slide.
But as it turns out, all the category needed was a lot of rain to turn its fortunes.
According to the 2013 CropLife 100 survey, the crop protection products category had its best year in more than a decade. Overall, sales for the sector were up almost 8% to $8.5 billion. Furthermore, for the first time since the 21st century began, the category managed to grow its overall market share, up 1% to 29%.
When asked why 2013 has turned into a positive year for the crop protection products category, virtually every CropLife 100 respondent credited one factor: Rain. “This was one of the rainiest springs ever for many parts of the country,” says Amy Asmus, co-owner of Asmus Farm Supply, Rake, IA. “And with this much water coming down and sometimes sitting in the fields, there was more disease and insect pressures than growers have seen in many, many years. Naturally, this translated into more crop protection products being used for control.”
Fungicides In The Field
The numbers for the CropLife 100 survey bear this out. For example, according to respondents, their fungicide sales saw a significant uptick during 2013. Based upon the data, 68% of CropLife 100 retailers recorded fungicide revenue increases during the year — an improvement of 16% from the 2012 numbers. And for the most part, grower-customers were apparently using these fungicide applications even if they didn’t have a problem in their fields. According to respondents, 82% of their customers were applying fungicides as a preventive measure to protect their crops. This was a full 4% higher than the number of grower-customers who used fungicide application as a preventive option during the 2012 growing season.
For insecticides, the picture was a little different. In 2012, 74% of CropLife 100 retailers reported that their insecticide sales had increased from the year before, with another 16% reporting no change in their overall revenues in this segment. According to the 2013 survey, these numbers weren’t significantly different. This year, 72% of CropLife 100 retailers said their insecticide sales had grown, with 6% recording no increases from 2012.
As for the final crop protection product segment — herbicides — 2013 was a bit worse than 2012 had been. According to 78% of 2013 CropLife 100 retailers, their herbicides sales for the year were up vs. 2012. However, this represented a 4% drop from the number of ag retailers that reported herbicide revenue gains from the season before. Furthermore, 16% of respondents in the 2013 survey said their herbicide sales had actually dropped from 2012. This compared with a tally of 9% of 2012 ag retailers that experienced a herbicide sales decline.
Hope For The Future
Despite this poor performance in 2013, most CropLife 100 ag retailers believe that the herbicides segment of the crop protection products business has the most promising future in terms of market penetration. The reason for this is simple: The continued spread of herbicide-resistant weeds. According to most recent data, there are at least 14 species of weeds that show single or multiple forms of herbicides resistance spread out across hundreds of thousands of farmland in more than 30 states. And new varieties seem to be showing up each month, according to many weed researchers.
CropLife 100 ag retailers have noted this problem in their annual survey results. According to the 2013 survey, 77% of respondents say that herbicide-resistant weeds are a major issue for grower-customers in all or some of their crop fields. Another 20% of those surveyed say these types of weeds are at least a minor problem for their customers. Only 3% report no herbicide-resistant weed issues in their areas of the country.
According to CropLife 100 retailers, these weeds will present a major challenge for the industry going forward. “We’re going to have to start re-educating some growers,” said Jeff Nagel, agronomist for Ceres Solutions, Terre Haute, IN, in the recent Managing Weed Resistance report, published by CropLife® magazine. “It’s really a shift toward a more ‘systems approach’ to weed management.”
And this should translate into more and different herbicides being used in the coming years to combat this issue.