Recapping Ag Retail in 2018
As 2018 rapidly speeds through its final few days, most media outlets are busy putting together their end-of-year lists based upon their particular market of interest. Allow us to do the same.
This year in ag retail was memorial for many reasons, both positive and negative. However, when all was said and done, three items seemed to carry the most weight in terms of overall market impact and the potential to spill over into the 2019 growing season as well. Listed in order from least to most important, here they are:
Dicamba Label Extended. Throughout the past two years, the introduction of dicamba-resistant crops has dominated many ag-oriented headlines. From a host of off-target complaints during 2017 to a relatively quiet 2018, dicamba application has been in the news. Going into November 2018, many wondered if the product would receive a label extension from EPA based upon these issues. And on October 31, the industry got its answer – dicamba could continue to be used for another two years. Although there are still some questions regarding exactly who is licensed to mix/handle/apply the herbicides, market watchers can expect to see plenty of dicamba-resistant plants going into crop fields until at least fall 2020.
Tariff Tiff Troubles. For the most part, agriculture was humming along nicely until summer 2018. Then, the U.S. and China began engaging in a trade war which resulted in big tariffs being slapped onto many of the items that move between the two countries. Unfortunately, one of these was soybeans. On average, said experts, U.S. growers sold every third row of their soybeans to China in previous years. With the tariffs in place, sales to the country came to an abrupt halt. By year end, relations between the two countries started to warm back up and some soybeans sales were made, but market watchers expect the fallout from this tariff war to continue into 2019.
Attacks on Glyphosate Intensify. If there was one story that dominated agriculture in 2018, it was the all-out attack on glyphosate use. For many years, several members of the European Union have called for banning this important herbicide because of implied human health risks. In 2018, this opposition spread to other parts of the globe such as South America. But the potentially biggest blow to glyphosate occurred in the U.S. during the summer. This was when a jury in California ruled in favor of a plaintiff that claimed using glyphosate gave him cancer, awarding a $289 million damage verdict. This was ultimately reduced to $78 million, but Bayer (which acquired glyphosate and Monsanto during 2018) saw its stock price tumble more than 30% as a result of this and anticipated future lawsuits already working their way through U.S. courts. Obviously, this issue will likely plague the entire agricultural industry for many years to come . . .