Why ROI Isn’t the Only Market Driver for Fertilizer Additives and Enhancers
April 1, 2024 It’s the nature of manufacturers to exude optimism or maybe it’s just the additives and enhancement segment of crop inputs simply continues to move in positive directions.
State of the Market
Additives and enhancers have yet to be fully embraced across the grower world, but that’s not stopping new and existing providers from continuing to improve and deliver new products.
“The market for agricultural additives and enhancers has been experiencing steady growth, driven by the increasing need for higher yields and efficient use of fertilizers,” says Brian Haschemeyer, BRANDT’s Vice President of Discovery and Innovation. “BRANDT has focused on products that improve overall nutrient use efficiency (NUE) as well as technologies that improve plant health in abiotic stress environments such as heat, drought, salinity, etc.”
In addition to promoting yield and efficiency, expanding the product portfolio has helped expand the market.
“The ‘traditional’ market, including nitrogen efficiency products and phosphorus enhancers, has been a stable market with our retailers,” says Tony Bolz, Director of Sales, Crop Nutrients for WinField United. “The segment of the market that is exploding is biologicals — whether the biological is being used as an enhancement to the fertilizer or a replacement.”
Timac Agro has seen similar growth in the biological side of the segment, says Michael Pisciotta, Director of Agronomy.
“The fertilizer additive and enhancer space is seeing a new wave of novel concepts around nutrient protection, efficiency, and uptake,” he continues. “This extends beyond nitrogen and phosphorus management and into how biology (both soil and plant) interacts with crop nutrition. On top of this more holistic approach, there is a specific interest around fertilizer management tools that reduce greenhouse gas (GHG) emissions through the lens of reducing environmental nutrient loss and/or nitrogen reduction programs. One item factoring into this renewed interest is various carbon crediting methodologies around changes in historical farming practices including normal nitrogen applications.”
The Ferticell brand embodies what sustainability is based on. The company carries a full line of sustainable and organic fertilizers for use in commercial agriculture production.
Bruce Roberts, Vice President, Operating Executive, Ferticell, says soil health is another key.
“We see the market growing with a focus on anything that increases the size and efficiency of the soil biome,” Roberts says. “That would include biologics and more environmentally friendly options. We believe that this will be consumer driven with an emphasis not only on environmental matters related to the origins of their food but also improved nutrition in our food. Something that has become neglected.”
Retailers’ Role
“For us they play a very large role,” says Roberts. “We are expanding to larger areas of the Midwest and find the local dealer is the outlet we want to expand with. They know their customers and are neighbors and have mutual interest in being successful for the dealer and the farmer. You go to a small town in the Midwest, and everyone knows the person or family that sells to the farmers.”
Relationships will continue to be key for the expansion of these products, but just as important is knowing how they work with existing crops.
“Understanding the chemistry behind products such as foliar fertilizers, biologicals, biostimulants, etc., is important, says Chad Magnuson, Director, Retail Division, for the Kugler Co. “As a seller it is critical to understand how a product works and the potential it brings for yield improvement or efficiencies in fertilizer use. Many of these products work well in certain areas of the country and in others not so much.”
Again, local retailers who understand their customers’ needs are key.
“We have the products and will be more heavily marketing them and increasing the dealer network,” he continues. “Without them it is very difficult to discuss the very real difference and benefits of our products with farmers.”
It’s all about the relationship between retailers and their grower-customers.
“Retailers play a role as the trusted advisor to growers,” says Ryan Bond, Vice President of Innovation and Business Development, Koch Agronomic Services (KAS). “By staying educated and trained on the various ag technologies, they help growers continue to reach their desired outcomes related to agronomics, the environment and economics.”
It’s not just knowing the customer. Ag retailers also know the land their clients grow on.
“There is a fertilizer additive or enhancer appropriate for every acre,” says Jason Haegele, North American Agronomy Lead, ICL. “Retailers have a responsibility to help their farmer customers understand which options in the market make the most sense for the local environment, soil types, and cropping system. This requires a commitment to continued employee education and training on agronomy and farm-gate economics, as well as willingness to proactively partner with manufacturers to trial products in the local environment.”
A Changing Market
“There has been a ‘silent shift’ in the market over the past two to three years,” says Timac Agro’s Pisciotta. “For many years the market had viewed institutionally proven, single mode of action type products as the standard bearer. There is more innovation around multiple modes of action type products, with many more fringing closer toward respect for soil biological functions. This has made the market much more complex but a lot more interesting for growers who want to truly evaluate the efficiency of their fertility program.”
As much as the products continue to advance, there are some basic rules that will always apply.
“We go back to the 4R’s (right source, right rate, right time, right place), which has been the key to efficient and correct applications of NPKS for responsible usage of nutrients,” says Kugler’s Magnuson. “We believe it is no different when considering an application of an additive or enhancer.”
Given their role in the environment, nitrogen stabilizers have seen their fair of discussion recently. Corteva’s Clark Smith, U.S. Product Manager, Nitrogen Stabilizers and Row Crop Fungicides, says 2023 was a strong year for the product.
“The nitrogen stabilizers sector experienced strong performance in 2023,” Smith says. “Our research shows multiple reasons for this performance. One is that corn growers are reporting anxiety about the apparent uptick in unexpected, extreme weather events. Heavy rainfall in a short period of time is a particular concern for growers in the Corn Belt. These rains can quickly drive nitrogen loss, leading to lost yield potential and lost profit. Additionally, growers are increasingly concerned with their impact on the environment. They’re looking for ways to reduce the loss of excess nitrogen into the air and waterways.”
According to Smith nitrogen stabilizers not only help below-ground leaching and denitrification of nitrogen, they can help secure grower ROI. For example, in corn crops, Optinyte technology, which powers the company’s N-Serve and Instinct NXTGEN products can:
- Increase average corn yield by 7% when used with fall applications and by 5.2% when used with spring applications.
- Increase soil nitrogen stability by 28%.
- Reduce leaching by 16%, which helps to keep an estimated 21 million pounds of excess nitrogen from entering American waterways each year.
Smith expects the strong showing to continue through 2024.
“At Corteva, we’re committed to providing farmers science-based biologicals that bring real value,” he says. “As more of these products come to market, farmers may have trouble discerning which ones they can trust. The USDA Process Verified Program helps build confidence in Utrisha N and shows that Corteva is committed to leading the way by setting — and adhering to — rigorous quality standards.”
Market Drivers
There are many factors pushing growers to increase their additive and enhancer usage. But there is one factor that always outweighs the rest.
“The bottom line is that additives and enhancers, whether traditional or biological, must have a solid ROI,” WinField United’s Bolz says. “Ensuring there is a return for the grower is foundational. But other key factors are also important, and so retailers should be asking questions like: is the product agronomically sound? Do we know how the product works and what data exists to ensure it lives up to its claims? Another consideration is if the product works operationally — for example, if its application method is compatible with current practices and products.”
Koch’s Bond added some additional drivers.
“The main objectives we see are to drive toward greater outcomes,” he says. “The No. 1 driver is agronomic outcomes including greater crop performance, yield, and quality via realizing greater use efficiency per unit of fertilizer. Other objectives in the industry include environmental outcomes such as more fertilizer on the crop and economic outcomes.”
For BRANDT, there’s no complexity to the main factor pushing the additives and enhancers market.
“The biggest driver to using additives or enhances is improving profitability, which could be the result of numerous things including improved nutrient use efficiency or even by improving a plants ability to function during periods heat or drought stress,” Haschemeyer says. “By improving plant health and stress tolerance we are improving the crops overall nutrient use efficiency in that that they may allow a plant to better maintain near normal growth functions when perhaps they otherwise would not under stressed conditions.”
For ICL’s Haegele it’s all about finding ways to produce more without increasing the amount of fertilizer.
“The biggest driver is the need to continue gains in productivity without a significant increase in fertilizer use,” he says. “In other words, making every pound of nutrient input as efficient as possible by minimizing environmental losses, crop nutrient uptake, and utilization of nutrients to produce grain or other harvestable produce.”
Looking Ahead
With all that’s happening to the segment, there’s little wonder why providers are bullish on the future.
Sackett-Waconia H.I.M. 2.0.
“Based on the current level of research investment (currently several billion dollars annually), these products will continue to see improvements and refinements,” says Kelvin Feist, Director of Sales and Marketing, Sackett-Waconia. “There will be better understanding of plant physiology and application techniques to maximize the products’ benefits. The industry can expect further advancements. The key to success in the field is proper uniform blends and field application. This is a crucial step for the delivery of these products to the plant and provide the promised benefits to growers.”
With the segment showing such promise, there are a numerous offerings and the industry will likely see a shakeout over the next several years.
“We are currently in a period of rapid expansion for additives that fall in biostimulant additive space,” BRANDT’s Haschemeyer says. “I think over time we start to see which products rise to the top.”
Ferticell’s Roberts looks to how the additives and enhancers segment will evolve in the next few years.
The industry needs to “continue to improve products to incorporate the energy component to help the biologic remain viable and propagate,” he says. “Others would include products that are non-GMO that do the same as a conventional product.
Challenges, Opportunities
As is common whenever a product or service becomes popular a number of players of varying sophistication enter the market.
“The biggest challenge right now is the sheer number of products that are coming to market so quickly in the biologicals space,” WiField United’s Bolz continues. “Many times, these products are introduced with limited performance data and a lack of clarity around how to use them or position them with growers. Growers are looking to their retailers to help them vet what works and what doesn’t, which is why the WinField United BioVerified designation was developed. It’s a transparent vetting process for biologicals, including additives and enhancers, so retailers know how a product works and can be confident in how to place it for the best results.”
Understanding how products work and how to use them properly is certainly a key to growth, but there are always basic factors that can have a huge impact on the choices growers make and the recommendations retailers make.
“The current downturn in grain commodity prices will make it difficult for farmers to add more input costs unless they are comfortable with a product’s potential for either yield response or cost savings,” Kugler’s Magnuson says. “You better know and believe in the product you are selling. You don’t want to be labeled a snake oil salesman.”
Providers continue to research products that benefit growers in new ways.
“A significant opportunity for the additive market is to investigate more long-term, holistic management strategies around prioritizing soil nutrition over fertilizer nutrition,” Timac Agro’s Pisciotta says. “Recent studies by the University of Illinois have shown that up to 67% of nitrogen used by corn comes from existing banks of soil nitrogen compared to fertilizer added. Considering biologicals, fertilizer enhancers and other technologies that make it easier for the plant to tap into and mobilize these existing nutrient stores in the soil needs to be a priority within the market.”
And there is little doubt the industry will respond.
“Additives and enhancers will significantly benefit our agriculture economy,” Sackett-Waconia’s Feist says. “While there remains much to learn, we are seeing the positive impacts beyond crop nutrient needs. These products are unlikely to re-place fertilizer needs; rather, they will become another tool farmers can utilize to maximize their return on investment.”
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