Summer Fungicides: Still A Difficult Sell
May 6, 2016 
Last year’s fungal epidemic set the summer of 2016 up for a positive fungicide application season, but closing the deal is anything but a slam dunk for retailers.
About a dozen years ago, Asian soybean rust (ASR) was working its way up to the U.S. from South America, where it had brought devastation to the Brazilian soybean crop. For a couple of years, retailers and farmers spent many hours learning about and preparing for what was assumed would be a cataclysmic disease invasion, while manufacturers geared up for unprecedented fungicide demand.
Thanks to a highly cold-sensitive spore, the U.S. has yet to see any sort of ASR outbreak. But in the process of education and preparation, the market grew to understand the potential benefits of fungicide use not just to suppress disease, but to bolster overall plant vitality. Manufacturers, in particular BASF with its Headline fungicide, began sharing research on yield benefits from applying fungicides regardless of disease pressure.
Market use of in-season fungicides, especially during the most recent boom years, steadily ticked upward as farmers in search of yield gain added fungicides to their arsenals. More money in farmers’ pockets led to more fungicide getting put down.
The yield results from farmers using fungicides has in general been positive, but the levels of benefit have been inconsistent and somewhat unpredictable. In a year of high disease pressure, or even high stress such as drought, the yield benefits shine. In a low pressure year, the yield bump is not as significant, and in some cases not enough to break even on the application.
“In our geography each year, we can get a seven- to nine-bushel response on average for corn, and somewhat better when disease pressure is higher,” says Jeff Nagel, crop protection manager at Ceres Solutions, Terre Haute, IN. Ceres has offered a fungicide program marketed as plant health and yield protection for 10 years, and at no time has the program proven consistently beneficial enough to farmer customers to move summer fungicides into the “must-have” services category.
“You need seven to eight bushels to cover costs, so to get the service in your favor you really need some disease pressure,” adds Nagel.
So, given the market doldrums that have been sitting like a storm cloud over agriculture for more than a year now, one could draw the conclusion that the outlook for summer fungicide application in 2016 is less than stellar.
Jason Paris, manager of northern crop protection at MFA Inc., Columbia, MO, is among the more pessimistic. “My expectations for fungicide applications in 2016 aren’t much,” says Paris. “With the current ag economy, the producer is looking to cut every chance they can, even when it doesn’t make the most agronomic sense.”
Paris also notes that MFA sits in the center of weed resistance territory, so he does not anticipate cuts coming from herbicide programs. “So when it comes time for fungicide applications, the crop is going to have to be looking pretty good before anyone will spend any money on those products.”
And in general, retailers we talked to said they are bracing for, and would not be surprised if farmer-customers ultimately take the scalpel to the fungicide budget. However, last season’s fungus epidemic and a few years of consistent use during agriculture’s recent boom years has a growing number of farmers ready to stick with the plan and apply fungicide this summer, and some retailers and fungicide manufacturers cautiously optimistic about hanging on to early orders.
“I have been surprised a bit about how much this market is holding together so far,” says Andrew Fisher, fungicide product lead for Syngenta. “Of course weather, markets and other factors can change things almost overnight, and financials will also weigh heavy on fungicide decisions. But from what I have seen over the past five years from growers is that the market is more elastic. Historically, when crop prices dropped, the fungicide application was abandoned first, but think it has transitioned.”
Syngenta conducts “elasticity” studies every year to determine how likely growers are to stay the course with fungicide programs. “We’ve seen a transition where increasingly growers have experienced the benefits, and don’t leave the check strips in anymore. They believe in the return fungicides bring as far as increased yield.”
Bad Memories
Last year’s moisture onslaught delivered a monster disease load on corn in 2015, by all accounts. “There are always pockets of high disease pressure in areas of the Corn Belt, but last year we had widespread epidemics across regions,” notes Don McInnis, fungicide manager at DuPont Crop Protection. “And because the conditions for disease started earlier and lasted longer than is typical, the pressure came earlier than expected and had a more dramatic impact on yield.”
“Last year was the worst disease pressure, from Ohio to Indiana and Illinois and out to Nebraska, that I have seen in 17 years here,” says Syngenta’s Fisher. “Growers who did not apply fungicides are saying that given the ROI, they would have made money last year.”
Early in the 2016 season, the leaving of yield on the table is still fresh in many farmers’ minds. And, predictive models indicate there’s plenty of inoculant on soil and stubble to get a good crop of fungus started this year, he adds.
Caren Schmidt, technical marketing manager for fungicides at BASF, agrees that the table is set for another high-outbreak season. “After last season’s epidemic year for northern corn leaf blight and gray leaf spot, there is a lot of inoculum out there,” she says. Add in the mild winter and the predicted near-record corn planting anticipated by the market this spring, and it’s a recipe for challenges.
Some retailers who were expressing cautious optimism at spring’s onset were buoyed by early commitments to fungicide programs by growers.
Craig Orr, manager of fungicide marketing and procurement for Heartland Cooperative, West Des Moines, IA, says corn fungicide prepaid orders were up 26% this year vs. last year. “You take it with a grain of salt because prepaids don’t always come to fruition, but our focus is on marketing prepay and locking up all the business we can.”
If the business holds, Heartland will have experienced two consecutive years of gains. “We were up 30,000 acres in 2015 vs. 2014,” says Orr. “Growers are seeing the response and trying to capture yield. Working to keep the plant healthy is a primary focus in our discussions with farmers, whether it is nutritionals or fungicides or combinations of products.”
At mega-cooperative GROWMARK, based in Bloomington, IL, crop protection manager Jeff Bunting says that fungicide bookings this year are ahead of 2015, likely driven by a combination of farmers wanting to qualify for programs from manufacturers, and memories of last year’s difficult disease challenges.
“With fungicides, producers are driven by what they experience and remember from the prior year,” says Bunting. “If they had issues with disease the previous year they are more committed to protecting their crop even with the down economy.”
He says that last year’s results for farmers that used fungicides was exceedingly positive — in general a bump of 15 to 20 bushels.
But despite the great evidence of effectiveness, it’s still a relatively fragile commitment for farmers.
“We are optimistic but cautious — there are lots of dynamics to happen with planting and the economy,” says Bunting. But early planting and a long season, with inoculant levels significant, could keep a lot more fungicide orders on the books, he adds.
Randy Myers, fungicide product manager at Bayer, says that farmers, with the help of the trusted retail advisers, need to understand the complexities of the fungicide application process. “Timing is critical with fungicides and often more complicated than other crop protection categories, so it is important for growers to understand these challenges going in,” says Myers.
Retailers agree that fungicides have not gotten to a point of “selling themselves,” and it will probably remain an annual sales slog for the foreseeable future.
“Thankfully, we saw tremendous yield results last year behind fungicide application,” says MFA’s Paris. “But that was last year, and it seems like we have to re-sell the benefits every year.”
Elusive Consistency
Locking in prepays while focusing marketing on the potential ROI and/or risk protection are the rules of the day for retailers trying to build fungicide business, and retailers are looking to put more evidence of benefits on the pile for growers to consider.
“A lot of fungicides did not get put on last year, so a lot of yield was left on the table,” says Ryan Wolf, agronomy services manager at WinField Solutions. “So, we’re trying to approach things a little more strategically.”
WinField is in the midst of a long-term research project that matches hybrid-specific response to fungicides. Using a patented process of application and analysis, WinField is seeking to rate hybrid response to fungicide applications on a 1 to 10 scale. A wide range of brands are tested in the research, including its Croplan brand and several competitors.
The rating is on a simple 1 to 10 scale. A hybrid rated 1 to 3 has good built-in response to fungal disease and may require less or no fungicide use; a 4 to 6 rated hybrid averages a medium response so in a year where fungus is present, fungicide use should provide solid value. Hybrids ranked in the 7 to 10 category provide a great response to fungicide, and will respond with increased yield with or without disease pressure.
“We’re simply trying to raise the odds of getting a solid ROI with fungicide use,” says Wolf. “Farmers really appreciate the information, and this is just one part of our overall cropping system.”
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