For Pesticides, 2020 Looked ‘Crystal Clear’ for Top Ag Retailers
For much of the world and agriculture, 2020 will be remembered for all the wrong reasons. Looking at the year using a broad lens, there was overall economic uncertainty as trade disputes continued, litigations/lawsuits involving key agricultural products reached new heights, and herbicide-resistant weeds remained a problem. And through all this, the ongoing COVID-19 pandemic cast a very long shadow over much of the “normal” activities that typically take place during a growing season.
Yet, despite all this, for the crop protection products category, the lens focused on 2020 looked very clear indeed, with sales and overall market share showing some healthy growth. For the crop protection product category, the 2020 profitability picture was very bright. For 2020, this category continued to build upon its sales performance of the past few years, with overall revenues growing from $12.1 billion in 2019 to $12.2 billion — another all-time record in overall sales. And despite being only a 0.8% increase in sales, this revenue increase was enough of a gain for the crop protection products category to grow its overall CropLife 100 revenue market share from 37% in 2019 to 39%.
Herbicide Driven
As has been the case for many growing seasons now, CropLife 100 ag retailers credit much of the growth for their overall crop protection product sales to the largest of the three market segments, herbicides. For many years now, more than half (50%) of respondents to the annual CropLife 100 survey have said their year-over-year sales of herbicides have tended to expand between 1% and more than 5% each and every growing season. This wasn’t quite as evident during the 2019 CropLife 100 survey, as only 46% of the nation’s ag retailers had this kind of sales bump on their books. According to many, this was due to the lack of product application that occurred because of an estimated 19 million acres of prevent plant happening during the 2019 growing season.
But with prevent plant acres not being an issue during the 2020 growing season, herbicide revenues came back with a vengeance. According to this year’s CropLife 100 survey, 71% of the nation’s largest ag retailers saw sales in this segment improve between 1% and more than 5%. Better still, only 16% of respondents said their herbicides revenues fell between 1% and more than 5% for the year — a big improvement from the 36% that had sales declines during 2019.
But in 2020, both segments were able to magnify these numbers. According to the 2020 CropLife 100 survey, 58% of respondents had their fungicide sales grow between 1% and more than 5%. In the insecticides segment, this percentage improved to 44%.
Of course, at least part of the reason the herbicides segment has been seeing strong sales increases from one growing season to the next for ag retailers likely ties back to the ever-growing challenge herbicide-resistant weeds present to grower-customers and their efforts to keep crop yields high.
According to the International Herbicide-Resistant Weed Database, there are currently 512 unique cases of herbicide resistant weeds around the world, represented by 262 separate species. In total, these weeds have developed resistance to 23 of the 26 known herbicide modes of action, which impacts more than 160 different herbicides.
For the nation’s top ag retailers, herbicide-resistant weeds have become a much more major threat than they once were. In fact, for three years in a row — between 2017 and 2019 — more than 80% of the annual CropLife 100 survey respondents have described the herbicide-resistant weed issue in their areas as “a major problem in some or all of the field” we service.
Not surprisingly, this percentage increased during 2020. According to this year’s survey, 84% of CropLife 100 ag retailers say herbicide-resistant weeds are a major problem for their grower-customers. Another 15% describe these weeds as “a minor problem” in their areas. Only 1% say their grower-customers have “no problems” with weeds — a decline from the 4% of respondents in the 2019 CropLife 100 survey who reported no herbicide-resistant weed issues in the crop fields they serviced.
Glyphosate’s Outlook
Of course, one of the major herbicide tools used by agriculture to combat weeds over the years has been glyphosate. Although weed resistance issues for the popular herbicide began to appear back in 2001 in marestail in a Delaware crop field, glyphosate has continued to be an important products growers use to control weeds.
However, since 2015-16, there have been hundreds of thousands of lawsuits filed against glyphosate use, seeking millions (and in some cases, billions) of dollars in damage awards. Glyphosate’s primary supplier, Bayer, has been on the receiving end of most of these lawsuits by virtue of its acquisition of former glyphosate maker Monsanto.
Yet, during 2020, Bayer and the lawyers for most of these lawsuits reached a settlement agreement, which were still being finalized in November. In the end, the company expects to have virtually all glyphosate litigation done and over with by late 2020 or early 2021.
But what will this mean for glyphosate in agriculture? According to 2020 CropLife 100 respondents, the verdict on the herbicide’s long-term future is split, although practically everyone thinks glyphosate will remain an important part of crop protection for the marketplace. With settlements in place, 54% of CropLife 100 ag retailers believe glyphosate will “remain an important tool for agriculture for years to come.” However, another 45% think the herbicide will remain in use, “but decline as other products gain market share.” Only 1% believe glyphosate will “decline rapidly, driven by consumer sentiment and farmer preference.”