Tracking Evidence of Strength in Crop Protection Segment
If the latest word from CropLife 100 companies is any indication, the state of the crop protection product market is pretty darn good.
Last month we reported this segment continued its comeback begun in 2013 — in fact, the category grew fully 14%, from just under $10 billion in total sales in 2016 to an all-time record of $11.4 billion. Market share for the category stands at 38% — only 3% below the industry’s current leader, fertilizer.
Any assessment of where the crop protection product (CPP) market is heading into 2018 definitely needs to include a look back at where the industry stood at the start of 2017, says Paul Gerdes, Proprietary Products Manager with West Central Distribution.
“Going into 2017 the industry was very nervous,” he points out. “Crop prices were low. Dicamba was coming on — or maybe not. And everyone was wondering what impacts herbicide resistant systems would have on the crop protection business.”
For one thing, Gerdes suggests the anticipation was that soybean pre-emergence treatments would be down a bit on the dicamba-treated acre. “What we’re seeing is that soybean pre-applications held their own on that acre. The dicamba basically offset some other technologies that were being used in that space.
“Overall, I think when you hear experts talk, they would say the CPP market was flat to down some,” he says.
Gerdes says the industry is seeing increased use of preemergence soil applied herbicides, with the goal of never letting the weed get out of the ground. Another management practice is using overlapping residuals, where growers put a preemerge product down then wait three, four, five weeks and put another residual down, to try to keep weeds from germinating season-long.
Soybean growers utilize overlapping residuals, but Gerdes is starting to see the practice more in corn as well. “A grower’s task is to figure out how many different modes of action he needs against a target pest — whatever it may be. And how does he make sure that he can start clean, stay clean, and finish clean,” he says.
Jim Lappin, Crop Marketing Manager, Corn & Soy with AMVAC, says programs have gone from about 2/3 preemergence followed by 1/3 postemergence applications — to where now, pre and post treatments are about 50/50. And about the same number of dollars are spent preemerge as postemerge.
Another use trend is the mixing and matching of more active ingredients, including older chemistries that were put on the shelf for some reason and have come back into play to keep resistance at bay as long as possible, says Gerdes. “Plus, we have the new traited technologies — the most recent being dicamba — all to help resistance prevention,” he adds.
Also impacting programs is the discovery that using multiple modes of action the same year can be more effective than mode of action A this year and mode of action B next year, he adds.
While dicamba issues have been discussed at length in the media, a “state of the industry” check does need to address the topic briefly. In response to alleged drift reports, states are making decisions on how to proceed with the herbicide-tolerant systems this year. And industry stakeholders are spending these winter months evaluating what happened in the widespread launch year for the products — as well as what to do going forward.
But one retailer put it this way. “We were in a very difficult weed control season in 2017. Where we used dicamba-based products, we were quite pleased with the results, with the herbicide efficacy,” says Todd Claussen, Director of Agronomy & Strategic Marketing at CropLife 100 dealer Landus Cooperative, Ames, IA. “We’ve used dicamba my entire 30-year career, we know it works extremely well on small seeded broadleafs. We particularly get good to excellent control of difficult weeds like waterhemp, common giant ragweed, sunflower, and more.
“At the same time, it’s still dicamba, and it has the potential to be in places users didn’t intend it to be. It’s an issue we have dealt with for many years — dicamba was first registered in the U.S. in 1967,” Claussen continues.
His experience is that if applications follow the label and protocols provided by the manufacturers of registered dicamba herbicides, those products will get to the target.
“If you follow the application protocol, it will not drift off target at application time. But it’s a molecule that has the potential to volatilize and move off-target after application due to a variety of reasons, such as temperature, temperature inversions, humidity and high vapor pressure,” he says.
West Central’s Gerdes reports that where the dicamba technology was needed, it did a great job in controlling resistant weeds. “It did what it was supposed to do,” he says simply.
“As I travel, in some areas of this country this resistance thing almost takes your breath away, it’s that big of an issue. Other geographies don’t deal with it at all,” he says. “But for those farmers who are truly struggling, it’s a serious, serious problem, so any tool the industry can bring them to help is a wonderful thing.”
The next helpful tool on deck: soybeans tolerant to 2,4-D as well as glyphosate and glufosinate in DowDuPont’s Enlist cropping systems. The soybeans are in the final stages of the regulatory review process for international distribution but seed will be available in 2018 to select farmers for planting in a closed-loop system linked to Archer Daniels Midland (ADM).
While herbicides are the most significant product at the active ingredient level (in both dollar and pound terms), market research just released in the insecticide space shows insecticides surpassed herbicides in 2015 to become the most significant category for formulated pesticide products due to their significantly higher markups. So reports The Freedonia Group, an industrial research firm.
Looking ahead, the results show demand for insecticide active ingredients in the U.S. is projected to increase 2.6% per year to $910 million in 2020.
West Central’s Gerdes says insecticide sales ebb and flow, and the challenge with insecticides (and often fungicides) is that growers never know where Mother Nature is going to create the problems where these products are going to create a return on investment.
“You never know where the insect outbreak is going to happen, you’re not going to know where the weather is going to give you inclement conditions that could drive disease for fungicides.
“In 2017, in some regions the market was really, really good and in some it was non-existent,” says Gerdes. “But that’s pretty typical in both categories.”
AMVAC’s Lappin reports that big picture-wise the fungicide market has been pretty consistent for the last three years. At press time, he says final data for 2017 was not in, but U.S. soybean applications, for instance, have trended somewhere around $200 million to $250 million.
Gerdes would call it “stable and strong.”
“You tend to have either believers or non-believers,” says Lappin. “Growers who have seen the difference go out and make a preventive treatment with a fungicide as part of their regular program. I think that’s become the more frequent use as opposed to the wait-till-you-see-a-problem application.”
As with other segments of the CPP market there’s a move to more combination products. For instance, one strategy to address strobilurin resistance is to add a triazole component, says Lappin. “So in general, you’re seeing more two-ways. I wouldn’t be surprised down the road you’ll see some three-ways. So again, as resistance continues to evolve, whether it’s weed, insect or disease, the solution tends to be: ‘Let’s put another mode of action in there to battle that problem.’”