CropLife 100 Custom Application: Good Growth, But the Potential for Risk

CropLife 100 Custom Application: Good Growth, But the Potential for Risk

Among CropLife 100 retailers, the custom application category has been a relatively steady one. For many years now, annual sales in this sector (which comprises both custom application and precision agriculture products/services) have regularly topped the $1.5 billion mark. This year, 2017, was no exception with revenue in custom application growing almost 3% to just below $1.6 billion. Market share for the category remained steady at 5%.

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Split into its two separate segments, the year was a bit mixed. Taken by themselves, custom application services among CropLife 100 retailers in 2017 increased 5% to just under $1.3 billion. For precision agriculture products/services, however, demand from grower-customers fell more than 6%, from $311 million in 2016 to $291 million.

The Risk of Dicamba

Going into 2018, many survey respondents stated that they believed the trouble with dicamba application work could pose a risk to the sector’s financial future.

For many months now, various states where dicamba-resistant crops have been planted have reported an inordinate amount of grower-customer complaints regarding off-target movement of dicamba applications. In fact, a few states such as Arkansas had so many such notices filed (more than 1,000) that they have proposed banning dicamba’s use past the middle of April for the 2018 growing season.

According to most agronomy experts, U.S. growers are projected to plant more than 40 million acres of dicamba-resistant crops in 2018, up from approximately 25 million in 2017, which means the issues regarding off-target movement could persist for the foreseeable future.

Among CropLife 100 retailers, a majority (58%) have already seen this issue play out in their areas. And many respondents in the open-ended question regarding what one agricultural trend was causing them the most stress going into 2018 chose dicamba as their No. 1 concern. “Dicamba-tolerant crops,” wrote one respondent. “The challenge with dicamba and knowing what the future will bring on spray dates while trying to sell seed,” said another.

As we move into 2018, what could really make off-target dicamba application an issue is how some insurance companies have responded to damage claims thus far. Many have reportedly told growers that they won’t reimburse them for yield losses because of off-target dicamba events. In these cases, say industry insiders, the growers’ only recourse to recoup lost revenue might be to sue manufacturers or custom applicators for damages.